Betterment vs. SoFi Invest – Modest Money


  • Industry low fees
  • Automatic rebalancing
  • Tax-loss harvesting
  • Free Access to Financial Planners
  • 529 Plans
  • Automatically Invest Extra Cash

Betterment and SoFi Invest are both leaders in the world of robo-advisors. Betterment was launched in 2008, while SoFi launched their platform three years later. SoFi created its own robo-advisor in 2019. Retail traders now make up 20% of all equity trades which tells us that the number of individual investors has skyrocketed.

Yet, many investors lack the skills and time required to correctly invest their money. You can put your portfolio in autopilot and continue living life.

Betterment offers similar products to SoFi, but there are some differences. Here’s what you need to know about the similarities and differences between these two market-leading roboadvisors.

Betterment Overview

When you invest with Betterment you are investing with one of the oldest roboadvisors in the industry. After all, it’s been around since 2008. It has been used by thousands of investors for years to help them invest in bonds and stocks.

Our Betterment Review highlighted the benefits this platform offers new investors. To get started, simply fill in the beginners’ questionnaire. The platform will provide recommendations for stocks and bonds based on your income and risk tolerance.

You can either listen to Betterment’s recommendations or manually select your stock/bond allocations. This depends on your level of confidence as an investor.

Betterment Details

Brokerage, Saving, Checking, Trust, Roth IRA, Traditional IRA, and SEP IRA

Exchange-Traded Funds (ETFs)

The main perk offered by Betterment investing is there’s no need to maintain a minimum account balance or invest a certain amount. Betterment automatically rebalances your portfolio if you decide to make an investment.

You can choose from a variety of accounts with Betterment. This feature is not available in other robo-advisors.

It helps you align your portfolio to your goals. If you’re nearing retirement, your portfolio allocation will be different from someone who has just left college and started their career.

To support you in securing the optimal portfolio, you can choose from selected specialized portfolios to achieve your goals, such as:

  • BlackRock Target Income
  • Climate Impact
  • Goldman Sachs Smart Beta
  • Social Impact

Betterment Fees

Since Betterment opened its doors, it has become known as an excellent starting point for investors looking for an alternative to traditional brokerages. It’s why Betterment fees are among the lowest around.

The main fee you need to pay is a management fee, which stands at 0.25% if you’re a Betterment Digital member. The Betterment Premium fee is 0.40%.

Some ETFs have expense ratios that range between 0.07% and 0.15%. They are also among the lowest available in the market.

You must have at least $100,000 in investment on Betterment Premium to be eligible for Betterment Premium. This membership tier gives you access to CFP experts’ free advice. However, even if you don’t qualify, you can still book a 45-minute call for $199.

Betterment Pros

  • Industry low fees
  • Automatic rebalancing
  • Tax-loss harvesting

Betterment Cons

  • Limited investment options
  • Little in the way of customization
  • Incompatible with external platforms

If you want to find out more about how Betterment works, check out our full review on Betterment now.

SoFi Invest Overview

Launched just three years after Betterment, the platform didn’t unveil its robo-advisor until 2019. SoFi Invest has quickly taken the investing world by storm. This platform boasts one of most sophisticated roboadvisors in the industry. This has enabled thousands to enter the market for their first time.

The lack of financial hurdles and the ability to trade stocks and ETFs for free make this platform a popular choice for cost-conscious investors. While there is not much to do with trading, it’s a good place for novice traders. We discussed this in our SoFi review.

Take note, if you’re choosing an automated investing account you’ll only be able to invest in ETFs, but with SoFi Active Investing you can invest in several types of assets, including fractional shares (known as Stock Bits).

SoFi is more flexible than Betterment when it comes to what assets you can invest in. But, SoFi’s tax-loss harvesting features are missing, which can pose a problem to larger investors.

SoFi Invest Details

Traditional IRA, Roth IRA, SEP ITA, and individual and joint taxable accounts

Stocks, ETFs, IPOs, and cryptocurrency

There’s no doubt in the debate over Betterment vs. SoFi that the latter offers a far bigger range of investments. Recently, the platform has added over 30 different cryptocurrencies to allow users to trade Bitcoin and Ethereum.

SoFi is unique because there aren’t any management fees. There is only a $75 flat fee to migrate your account from SoFi.

Betterment wins when we look at the different types of accounts that are available. Betterment is the clear winner because it offers checking and savings accounts.

Plus, Betterment has tax-loss harvesting, which SoFi doesn’t. This advanced feature is missing from Betterment, which could mean that you are potentially losing hundreds of thousands in taxes every year. It may not matter to smaller investors but this can start to affect larger portfolios.

SoFi has no fees. This is what we love most about investing. You will not find any fees added to other fees. These fees can range from trading commissions and management fees. It’s one of the few platforms that can claim to be truly transparent in the way it operates. It makes its money through other products.

SoFi Invest Fees

As already mentioned in our full review on SoFi, there are no fees involved with operating an investment account here. No monthly fees, minimum investments, commissions or fees are charged for an investment account.

The $75 account closing fee is the exception. Trading in ETFs will not be charged. On average, the expense ratio is just 0.5%.

The 0.25% Management Fee Betterment charges will impact how much tax-loss harvesting can bring you. Make sure you do your research to find the platform that offers the greatest value.

SoFi Pros

  • No management fees
  • Free access to qualified financial advisors
  • Commission-free trading

SoFi Cons

  • No tax-loss harvesting
  • Only available to U.S. investors
  • $75 fee for leaving the platform

To find out more about the ins and outs of SoFi Invest, read our full SoFi review now.

Betterment vs. SoFi Invest: Comparison

0.25% (Digital); 0.40% (Premium)

Brokerage, Saving, Checking,
Trust, Roth IRA, Traditional IRA, and SEP IRA

Traditional IRA, Roth IRA, SEP ITA, and individual and joint taxable accounts

$199 (Free with Premium)

Hands-On and Hands-Off Investors

Betterment vs. SoFi Invest: Which One is Right for You?

Both platforms offer similar products, but SoFi goes one step further because you have the option to trade actively. SoFi offers a wider range of assets, including crypto. This allows investors to become market traders. Betterment’s sole focus on automated investing may be a turnoff for some.

The fees are comparable, but Betterment charges more. This may make SoFi seem more attractive, but Betterment could be less expensive long-term. Betterment does not offer tax loss harvesting.

The number of accounts that Betterment supports was also an advantage. A small number of investors find SoFi’s lack of a checking or savings account a disadvantage.

Both offer qualified financial advisors access if you look at their support options. SoFi is free to all, no matter how much you invest. Only Premium subscribers or customers who spend $199 are eligible to receive free access to Betterment.

The best option depends on whether you trade actively or passively. If it’s the former, choose Betterment due to the tax-loss harvesting options. Trades can be done commission-free using several asset types available on SoFi.

On balance, we would have to go with SoFi Invest as our beginner investment vehicle of choice, but that doesn’t mean Betterment isn’t right for some investors.

Register with Modest Money today to open an account and start investing immediately.

Create an account now and invest for free with SoFi Invest.

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