Betterment Review 2021: Pros, Cons, & Expert Opinion

Bob HaegeleBy: Bob Haegele

May 16, 2021May 16, 2021

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Betterment Logo


In a nutshellBetterment is an industry leader as a low-cost, easy-to-use robo-advisor.

With just 0.25% in management fees and automated tax-loss harvesting, Betterment makes it easy to put your portfolio on autopilot.

In a nutshell: Betterment is an industry leader as a low-cost, easy-to-use robo-advisor.

With just 0.25% in management fees and automated tax-loss harvesting, Betterment makes it easy to put your portfolio on autopilot.


0.25% - 0.40%

Account Minimum


Betterment is a low-cost, easy-to-use robo-advisor with automatic rebalancing and tax-loss harvesting. Its simple approach makes it easy for anyone to invest.

Pros & Cons



  • Limited Portfolio Customization
  • Limited Compatibility with External Accounts
  • No Real Estate Investing

Compare to Other Investing Platforms


0.25% - 0.40%

Minimum Investment



Up to 1 year free


$0 - $125/year

Minimum Investment



Invest for free



Minimum Investment



Invest for free

M1 Finance review




$0 - $125/year

Minimum Investment



Invest for free

Betterment Logo




0.25% - 0.40%

Minimum Investment



Up to 1 year free

Full Review

Betterment is a leader as a simple, low-cost robo-advisor. And in this Betterment review, we dive deep into one of our favorite robo-advisors. Simply put, Betterment is changing the world of investing.

Betterment is best for:

  • Brand-new investors
  • Investors who want tax optimization
  • Socially-responsible investors

Betterment at a Glance

Account Minimum

  • No account minimum for Digital; $100,000 for Premium.

Management Fees

  • 0.25% for Betterment Digital; 0.40% for Betterment Premium.

Expense Ratios

  • Expense ratios for ETFs range between 0.07% and 0.15%.

Account Fees

  • No account fees.

Portfolio Mix

  • Portfolio of 14 different ETFs; specialized portfolios including core portfolio, Goldman Sachs Smart Beta, Blacrock Target Income, socially-responsible investing.

Account Types

  • Individual, joint, traditional IRA, Roth IRA, and SEP IRA, inherited IRA, trust, checking, and savings

Tax Strategy

  • Betterment’s tax-coordination portfolio adds a lot of value to the already great service.
  • Betterment estimates annual savings of 0.48% or 15% over 30 years.

Automatic Rebalancing

  • Betterment offers free tax-loss harvesting and re-allocation/portfolio balancing.
  • Betterment will also automatically rebalance your portfolio.

Savings Account/Cash Management

  • Cash management/high-yield savings account and checking account offered.

Customer Support

  • Live chat is available plus representatives are available by phone 7 days a week until mid-late evening EST.
  • There is a special line for 401(k) customers, Plus, and Premium customers.

Human Advisors

  • Available with Betterment Premium or for a one-time fee of $199 or $299 for Digital users.

What is Betterment?

Betterment is a robo-advisor with low fees, a great user experience, and a plethora of portfolio options. Betterment is one of the very first robo-advisors, which we'll explore in our Betterment review.

Jon Stein founded the company in 2008 and he still serves as CEO. Then, the company officially launched in 2010 after a big debut at TechCrunch Disrupt NYC. After that, Betterment scored $3 million in funding and has enjoyed steady growth ever since.


The press has been kind to Betterment as well. For example, you’ve likely seen glowing reviews in the Wall Street Journal, Forbes, and CNN.


But Betterment’s portfolio results have proved that this is more than hype. Indeed, Betterment now has more than 500,000 users and manages over $22 billion.

Betterment Investing

Betterment is an excellent robo-advisor. Accordingly, investors use it to get advice on many different investment opportunities, including:

The platform allows you to create a portfolio that invests your money in low-cost funds. Then, Betterment does the rest. Also, Betterment uses fractional shares, which help you fully leverage your money.

For example, you may want to buy a share of Google stock, and then you look at the share price.


Don't worry: fractional shares allow you to buy tiny chunks of a share. Thus, you won't have to wait until you can buy full shares.

And Betterment is not just a bunch of algorithms. Hence, it has a great reputation compared to its competitors, such as Wealthfront.

» Want to see how Betterment compares to its competitors? Check out our list of the best robo-advisors.

How Good is Betterment?

Betterment has an excellent customer service record. And, if needed, you can get help from certified financial planners (CFPs). Plus, if you sign up for the Betterment Premium plan, you can get unlimited access to certified financial planners.

Betterment is also perfect for new investors because it helps eliminate hours of research. Therefore, Betterment remains the best-known robo-advisor on the market.

Indeed, investors love Betterment because of its tax advantages, such as tax-loss harvesting. After all, investing in a tax-optimized way helps your money grow faster.

So, now is a good time to sign up with Betterment as you'll get up to 12 months free.

See how much you can save with the promo here.

Getting Started

Betterment enrolls new investors in an automated portfolio of stocks and bonds. For the Digital plan, you'll pay an annual fee of 0.25% of assets under management, and a 0.40% annual fee for Premium.

Furthermore, Betterment’s website shows you how much you need to contribute for retirement planning. Thus, it makes it easy to stay on track.

Thanks to intuitive goal tracking, you will see how your Betterment account will grow over the years. And with automated deposits, you won’t have to manage a thing.

In fact, Betterment investing has several features that help your money grow:

  • Tax-loss harvesting (TLH+)
  • Automated diversification
  • Tax-Coordinated Portfolio
  • Reinvestment of dividends

Betterment Account Types

Betterment has a wide variety of account types:

  • Individual taxable account
  • Joint taxable account
  • Traditional IRA, Roth IRA, and SEP IRA
  • Inherited IRA
  • Trust account
  • High-yield savings account
  • Checking account

Betterment also supports 401(k) rollovers. Thus, you can roll an old 401(k) into a Betterment IRA. You also have the option to link external accounts to help track your financial goals.

Betterment Returns

Independent investment managers often charge more than 1% annually. Nevertheless, they usually fail to beat the market.

On the other hand, Betterment has beaten the market 88% of the time since its inception. Specifically, it uses a portfolio of US and international stocks designed by experts.

Like many robo-advisors, it uses Modern Portfolio Theory (MPT). Thus, it helps maximize performance while minimizing risk.

Because of this, Betterment’s portfolio grew 172.9% between 2004 and 2020. And in 2013, the platform boasted 11% growth with a 70% stock allocation.

During the same time period, the S&P 500 yielded 174%. That means Betterment was slightly lower than the S&P, although not by much. And given that Betterment invests in low-cost ETFs, you shouldn't expect to beat the market.

As you can see, average Betterment returns run close to S&P 500 performance.

And considering Betterment has automatic tax-loss harvesting and rebalancing, you can hardly go wrong. After all, those features mean your Betterment portfolio will need virtually no ongoing maintenance.

Betterment Features

Betterment has many unique features that set it apart from the competition. For this reason, your portfolio will be secure and well-managed.

Investment Goals

Betterment allows you to save and invest for a variety of different goals. They include:

  • Retirement savings
  • Retirement income
  • Safety net
  • Major purchases
  • General investing

Custom Asset Allocation

Customization is based on the account type an investor has and what their risk tolerance looks like. In other words, Betterment will adjust your investments based on risk tolerance.


This feature is especially useful for investors with irregular income. That's because you can set up automatic deposits when your bank account balance reaches a certain amount.

Likewise, you can limit the amount of investment. Above all, the best thing about SmartDeposit is how easy it is to set up.

Tax-Coordinated Portfolio

This feature allocates assets based on the tax efficiency of pre-tax and after-tax accounts.

Passwords to Control Security

You can use external accounts on services like Personal Capital and Mint to see a read-only version of your info. And you can do this without compromising the security of your account.

Mobile App Access to a Financial Expert

Anyone who signs up for a Betterment account can send a message to a financial expert using the Betterment app. Thus, it's a great way to get answers to any of your questions.

Giving to Charity

Betterment also supports charitable giving allows users to donate some of their shares. Accordingly, it benefits those charities and helps investors avoid tax liability.

Flexible Portfolios

Anyone who has $100,000 or more in their Betterment account can take advantage of the Flexible Portfolio feature. It allows you to adjust the asset class weights within your portfolio.

This feature works similarly to how investment pies work in M1 Finance. The main difference is that with Betterment, you are only working with a set of ETFs, whereas M1 allows you to add individual stocks.

Betterment Financial Advice Packages

These packages allow you to get help from human financial advisors. That includes advice from a licensed financial expert or certified financial planner. And if you have complex finances, that can be especially helpful. 

For $199, you can book a 45-minute call with a human advisor.

Then, if you want a call that is more tailored to your needs, you can book one of four 60-minute calls for $299 with a human advisor:

  • Financial Checkup
  • College Planning
  • Marriage Planning
  • Retirement Planning

Betterment Cash Reserve and Checking Account

The Cash Reserve account replaces the previous Smart Saver option. The new account is a cash management account called the Cash Reserve account.

The new high-yield savings account has an interest rate of up to 0.40% APY. Additionally, there are no fees to pay.

Betterment Checking users have access to the following:

  • Betterment checking accounts
  • Savings accounts
  • Visa debit cards

The Betterment checking account also has some nice features. For example, Betterment will reimburse all ATM fees when you use your debit card. That means both foreign and domestic. Plus, deposits are FDIC-insured.

It also eliminated overdraft fees, transaction fees, and minimum balances. What's left? A no-nonsense checking account.

Betterment IRA Review, and Other Account Types

Because so many users start Betterment IRAs, this account type is worth a little extra attention. In short, an individual retirement account (IRA) helps with retirement savings.

You can also use Betterment's retirement calculator to find out how much you need to meet your retirement goals. As a result, you'll be able to choose the right retirement account.

Which one is best depends on tax deference preferences and retirement goals. Either way, Betterment’s visualization tools make it easy to see the advantages of each tax model.

Also, users can start taxable accounts, 401(k), trust accounts, and 529 plans for college planning.

Betterment’s Methods

By now, you're probably wondering how Betterment works.

When using Betterment, the first question investors see is about their goals. For example, building a retirement fund or creating an emergency fund.

Next, Betterment reviews your goals and considers what your holdings should be. In addition, it determines the appropriate level of risk.

Finally, it provides dedicated advice based on the financial goals of the investor.

New User Promotions

Betterment’s new user promotion waives the service free for up to 12 months for new accounts. Plus, there are extra perks for those who refer people.

The discount you receive depends on your portfolio balance in the first 45 days:

  • $15,000 - $99,999: one month free
  • $100,000 - $249,999: six months free
  • $250,000+: one year free

Seamless Platform Performance

Betterment's platform performance couldn’t be better. Not only that, but it works well on just about any platform.

For instance, whether you have a desktop, laptop, or smartphone, Betterment is compatible.

It’s a 21st-century platform and it just works. Truly, whether you want to adjust your portfolio or create a new investment goal, it's easy on any device.

Better Investment Philosophy

Betterment uses every possible method to save its users money and add value to the platform. For example, it includes free standard offerings:

  • TLH+
  • Smart Deposit Automation
  • Tax-Coordinated portfolio

And these features are all built on low-cost, high-performance ETFs.

Betterment Investment Options

It’s easy to create custom asset allocations and personalized investment goals. You can also create a variety of account types including taxable and non-taxable.

In truth, nearly every aspect of Betterment is great. Simply put, it's an investment model that offers the best results to the most people.

Betterment Fees

Plan Name

Minimum Balance

Management Fees







Betterment's fee structure is fairly straightforward. The fee for its Digital Plan is 0.25%, while Digital will cost 0.40%. See more info about Betterment's pricing here.

There is no minimum balance for the Betterment Digital plan. On the other hand, the Premium plan has a $100,000 minimum.

Investors can get unlimited access to investment advisors by phone and email with this service. But it's worth noting that the Premium plan has a minimum account balance of $100,000.

On the whole, there is an impressive range of low fees all round for all Betterment services.

Betterment Portfolio

Betterment offers users a strong selection of individual stocks and bonds. As a result, users see great historical performance and affordability in an investment account.

The user selects their own stock/bond allocation. To explain, bonds generally offer slow growth, reliable dividends, and a low risk of value loss. Conversely, stocks are more volatile but can experience higher growth.

The range of expense ratios for Betterment's ETFs is from 0.07% to 0.15%, depending on asset allocation.

Betterment’s current portfolio offerings are as follows:



Vanguard U.S. Total Stock Market (VTI)

iShares Short-Term Treasury Bond Index (SHV)

Vanguard US Large-Cap Value Index (VTV)

iShares Core U.S. Aggregate Bond

Vanguard US Mid-Cap Value Index (VOE)

Vanguard Short-Term Inflation-Protected Securities (VTIP)

Vanguard US Small-Cap Value Index (VBR)

Vanguard US Total Bond Market Index (BNDX)

Vanguard FTSE Developed Market Index (VEA)

iShares National AMT-Free Muni Bond Index (MUB)

Vanguard FTSE Emerging Index (VWO)

iShares Corporate Bond Index (LQD)

iShares J.P. Morgan USD Emerging Markets Bond (EMB)

*Note: Betterment stocks slightly favor value and small-cap stocks, which historically outperform the broad market.

Portfolio Balancing with Betterment

Betterment automatically balances your portfolio when certain criteria are met. No action is needed from you to trigger rebalancing. Here are the methods Betterment uses:

  • Cash Flow Rebalancing: suggested when drift reaches 2%
  • Sell/Buy Rebalancing: automatically triggered when drift reaches 3%
  • Allocation Change Rebalancing: corrects drift when you manually change your target allocation

As suggested above, you always have the option to change your portfolio allocation. However, that isn't necessary to trigger rebalancing, which happens automatically any time drift reaches 3%.

Socially Responsible Investing

Socially-responsible investing refers to stock and bond ETFs that have a positive impact on the world. Socially-responsible investing often refers to ESG investing, which is investing with an environment, social, and governance focus.

This investment strategy is growing rapidly. Indeed, the percentage of investors allocating at least a quarter of their portfolios to ESG increased from 48 percent in 2017 to 75 percent in 2019.

Betterment allows users to invest in ESG funds while being fully diversified and low-cost. Specifically, it replaces the following asset classes with SRI alternatives:

  • U.S. stocks – large-cap
  • Emerging market stocks
  • Developed market stocks

Betterment has offered responsible investing since 2017. But, in 2020, it expanded its socially-responsible products. As a result, the original portfolio became known as the Broad Impact portfolio.

It then added two new socially-responsible portfolios: Social Impact and Climate Impact. In doing so, it allows investors to hone in on the issues they value most.

Climate Impact Portfolio

According to NASA, the average global temperature has risen about 2.12 degrees Fahrenheit since the late 19th century, and investors are taking notice of this issue. The Climate Impact portfolio focuses on mitigating climate change.

In particular, it invests in three areas:

  • The companies with the lowest carbon footprints in each sector
  • Funds that actively exclude companies with fossil fuel reserves
  • Green bonds, which invest in alternative energy, pollution control, and climate adaptation

Specifically, the Climate Impact portfolio invests half of its assets in the iShares MSCI ACWI Low Carbon Target ETF (CRBN). It's worth noting that low carbon does not mean carbon-free.

CRBN scores a C grade on Fossil Free Funds and has almost $23 million invested in fossil fuels. That said, the fund also has almost $485M in assets. That's less than half a percent of its equity in fossil fuels.

And that's better than other popular funds such as VTSAX. Indeed, this fund has about 6% of its equity in fossil fuels. Still, I would have liked to see a slightly better score in terms of climate impact.

The rest of the Climate Impact portfolio is invested in SPYX, EFAX, and EEMX. SPYX also scores a C on Fossil Free Funds. On the other hand, the other two score slightly better with a B grade.

Social Impact Portfolio

The Social Impact portfolio invests in US companies that value diversity. This includes funds such as the NACP ETF and the SHE ETF.

These funds give exposure to organizations that value ethnic, racial, and gender diversity.

BlackRock Target Income Portfolio

This is a relatively new portfolio option at Betterment. Still, it's an ideal solution for anyone who is looking for low-risk investments.

To illustrate, the entire portfolio is centered on bonds that provide a low level of risk.

Goldman Sachs Smart Beta Portfolio

This is another portfolio that is a recent addition to Betterment. So that it can compete with Schwab and others, Betterment users benefit from the implementation of the Goldman Sachs Smart Beta portfolio. To explain, this helps improve returns.

Betterment vs. The Competition

Here, we'll take a look at how Betterment compares to its various competitors. In particular, we'll compare it to M1 Finance, Vanguard, and Robinhood.

Betterment vs. Vanguard

Vanguard can sell you the same portfolio as Betterment for a slightly lower annual fee. But only if you are willing to do a lot more work on your own. And in most cases, the cost difference is very slight.

Vanguard Logo

At Vanguard, you’ll also have to do all of the following on your own:

  • Rebalancing
  • Tax-coordinated portfolio service
  • Reallocation
  • Reinvestment

These perks more than cover the cost of your Betterment fees. So if you're wondering, "is Betterment Better than Vanguard?" the answer is it depends. Although Betterment comes with fees, you can a lot of value for them.

See a more in-depth Betterment vs. Vanguard comparison.

Betterment vs. Robinhood

Betterment and Robinhood both have a lot to offer, but the target market is quite different. We'll find out why in this quick comparison.

Robinhood Logo

Betterment is great for those who want a hands-off approach to investing. Specifically, once you determine your stock/bond, all you have to do is add money to your portfolio.

Then the platform takes over. And since it has automatic rebalancing and tax-loss harvesting, it is a set-it-and-forget-it solution. Of course, you do pay a fee for that convenience, which is something to keep in mind.

Robinhood is quite different. Because the app is a commission-free trading platform, it allows you to trade a variety of different assets.

Specifically, you can use Robinhood to trade stocks, bonds, ETFs, and options. And you can even trade cryptocurrency with this app. There are no commissions for any of these trades, nor is there a membership fee.

What you don't get with Robinhood is any sort of dynamic rebalancing or tax-loss harvesting. That's because it's more of a DIY solution.

However, the lack of commissions makes Robinhood great for more active traders. Surely, day traders would find this app useful.

Betterment FAQ

It's time to take a look at what Betterment has to offer in more detail.

Too busy to read the full review? Here are some answers to your deepest burning questions about Betterment.

Can Betterment Be Trusted?

You can indeed trust Betterment; it has been around for more than a decade. Plus, the company is regulated and its users are insured by the SIPC. Betterment Checking is FDIC-insured up to $250,000. In addition, it has great scam/fraud protection and encryption.

See their BBB rating here.

Is Betterment a Good Investment?

Betterment is indeed a good investment for many people. To illustrate, it invests your money in a diverse portfolio of 14 ETFs.

This allows it to have strong long-term performance. And it does that with a low management fee of 0.25% for Digital members.

Can You Lose Money with Betterment?

Yes, you can lose money with Betterment, at least in the short term.

Betterment invests your money in the stock market, which is subject to short-term fluctuation. Most stock portfolios do make money but often have periods of negative return.

Your portfolio allocation plays a role as well. For example, aggressive portfolios will be hit harder during bear markets.

Betterment has an interactive tool on its website which allows you to see past returns using real Betterment portfolio data. Unsurprisingly, over the past year, a more aggressive portfolio would have fared better than a more conservative one.

For instance, from June 2019 to June 2020, a Betterment portfolio of 60% bonds and 40% stocks would have had a +2.3% return. Conversely, a portfolio of 100% stocks would have had a -2.7% return.

Can You Take Your Money Out of Betterment?

Yes, you can take your money out of Betterment at any time. Betterment doesn't charge any fees when you do so. However, you may be responsible for capital gains when the money comes out.

Note that money invested for more than a year is subject to long-term capital gains, which is lower than short-term capital gains on investments held less than a year.

The only exception to this is if you have a tax-advantaged account in Betterment, such as an IRA. However, money withdrawn from a traditional IRA before age 59 & 1/2 is subject to a 10% penalty. That penalty doesn't apply to Roth IRAs.

What Are People Saying About Betterment?

Yes, we are fans of Betterment, but we aren't the only ones. For instance, here are a few highlights of Betterment's ratings from different platforms:

  • On the Apple App Store, Betterment has a 4.8/5 with over 28,000 ratings. 
  • On Google Play, Betterment scores 4.6/5 stars with over 5,600 ratings.
  • On Consumer Affairs, Betterment scores four stars with 240 ratings.

And what do people have to say about Betterment, exactly? Here are a couple of verified reviews from real people:

"I absolutely love Betterment and the automatic investing services they provide at a very low fee. Their website is extremely user friendly and you can make changes or withdraw your money at any time. … I am a CPA and I have never seen anything that would make me think they are not trustworthy."

"I absolutely love Betterment and the automatic investing services they provide at a very low fee. Their website is extremely user friendly and you can make changes or withdraw your money at any time. … I am a CPA and I have never seen anything that would make me think they are not trustworthy."

How Do I Sign Up?

At this point, you might be ready to sign up for Betterment, and it's really easy. In fact, it only takes a couple of minutes.

New users input all the usual information, then start asking some questions about their investment goals. For example, your risk tolerance, time horizon, etc.

Next, Betterment asks you to link to your financial institution, which can be completed in minutes. New funds show up in a couple of days, at which point your account is up and running.

Users transferring IRAs and other accounts from other brokers will usually see the accounts appear in as soon as 2-3 weeks. There’s no minimum deposit to begin, but make sure to take advantage of free service for the initial deposit amounts specified above.

Once your account is set up, Betterment will send you a series of helpful emails. Accordingly, these emails detail Betterment features and make sure you’re getting the most out of the service.

Head over to Betterment to build your low-cost portfolio.

Betterment Review: Conclusion

Betterment is a robo-advisor that simplifies investing. It does this with flexible portfolios, high yield savings, and more. And if you set up automatic deposits, investing can be fully automated.

To sum up, Betterment is great for financial planning and investment strategies.

Investors and personal finance enthusiasts can appreciate just how easy they make it.

Hence, new investors are signing up by the thousands. With no minimum investment and low fees, it just makes sense. Indeed, you can even use your debit card anywhere and never pay ATM fees. And the Betterment Cash Reserve account makes things even easier.

We love how responsive Betterment is to user feedback and how quickly they respond to our emails. Plus, they've added so many useful features and improvements in a short time.

We only expect Betterment to get better. Even now, they’re a true leader in the robo-advisor and modern investment landscape.

Click to get up to one year free with Betterment.

Related Investing Product Reviews:

Bob Haegele

About the Author:

Bob Haegele is a personal finance writer, entrepreneur, and dog walker. Bob has been writing about personal finance for three years and now manages several personal finance sites, including The Frugal Fellow, Modest Money, and Blooming Wealth. You can also find him contributing to popular websites such as Yahoo! Finance, MSN Money, and GOBankingRates. You can see more of his work on Muck Rack and Contently, or connect with him on LinkedIn.

48 thoughts on “Betterment Review 2021: Pros, Cons, & Expert Opinion”

  1. Great review Joshua. I started with Betterment and I really enjoy it. I actually talked with a few of their employees that came from iShares and Vanguard because they like the platform so much. I know that their fees are a little higher, but I have really found some good success with them and recommend them to anyone looking to get into investing.

    1. Good to hear you have had success with them Grayson. I’d definitely give them a shot but I think they might be only available for Americans. The hands free approach would be pretty convenient for many people.

  2. Great review, I guess this is a good option for people who do not really want to learn or stress about investing options on their own for an added fee.

    1. Exactly. Not everyone has the time or desire to learn about investing and keep on top of it all. So there needs to be an option where people can let a company choose which specific investments they are purchasing.

  3. I was previously oblivious to their existence, so thanks for a thorough write-up.

    This could be a good set of training wheels for a beginner before they take off on their own (and can then avoid the fees/transactional costs)

    1. Yes this is probably a good idea for beginner investors. Or people can use this as their option for safe investing while being a bit more risky with a separate account.

  4. Kim@Eyesonthedollar

    I have tried Betterment and found it is super easy to use and great for someone who either doesn’t know how to invest or who doesn’t want to deal with rebalancing or choosing funds.

    1. It does sound like a solid platform for anyone that is new to investing. Choosing funds can be quite difficult for a beginner to tackle on their own, especially knowing that you have to keep an eye on all of those selections.

  5. Christine @ ThePursuitofGreen

    Thanks for writing this review! I’ve been intending to start investing with Betterment, but this gives it a very good review form someone who has used it before! Can’t wait to start an account there!

  6. Nice review! I know nothing about investing so far so this indeed sounds like something I could give a try… not sure how good of an idea would be for the future, though because probably knowing what you’re doing with your money is the best thing to do :))

    1. Yes, in the long term, it may be best to learn to handle investing on your own. That isn’t practical for everyone though. For some people free time is at a premium and they’d gladly pay fees to save some time.

  7. Financial Independence

    Definitely looks like a suitable way to invest for those who don’t want to dedicate the time to learning about direct investing. The slightly higher fees make sense if the alternative was to not invest at all due to not having the knowledge.

    1. The hurdle is more than just learning about direct investing. You also have to be very diligent about researching companies and monitoring those companies regularly.

  8. Thomas | Your Daily Finance

    Thanks for the review Josh! I never heard of Betterment until this morning. Fees can add up so I guess you have to find out if it makes since for you to use. From the comments seems like people have had a good experience with them. I get free trades right now so I like where I am at for the moment. But you never know.

    1. Someone at your level probably wouldn’t have any incentive to switch over, especially since you get free trades. For more of an entry level investor, it’s a solid option though.

  9. Tara @ Streets Ahead Living

    I really recommend Betterment to folks who can’t put up the large starting balance for a lower fee account like Vanguard. When saving for a large balance requirement investment account, it can be tempting to use that money for something else (oh look, my friends are going on a cruise, I can postpone starting that Vanguard account…) so having that money already invested ensures it can’t be used for non-retirement fun.

    1. Good point Tara. It does take a lot more money to get into something like Vanguard. By starting somewhere like Betterment, you can get your feet wet and get some returns on your money in the meantime.

  10. Hi Josh,

    Katherine from Betterment here. Thank you for your thorough review – it was great to see you write about us.

    I just wanted to clarify our fees – they range from 0.15% to 0.35%. We keep our costs low to help customers avoid erosion of their returns. Would appreciate if you could update the review.

    Thanks again,

  11. Scott @

    With all of the positives involved with Betterment, there are costs. Don’t get me wrong, it is a great product. However, a great deal of my investing success (not just in equities) is in minimizing costs or eliminating them completely. This product is perfect for someone with limited time and knowledge of picking stocks and ETFs.

    1. Yes a serious investor should be very concerned with their investment costs. Early on though, most people just don’t have the time or expertise to properly manage their portfolio. So paying those costs could be very worthwhile in that scenario.

  12. Shobir @ Find Some Money

    This is the first time I’ve heard about the Betterment account, I love reading your reviews and this is something I’m definitely going to check out. While were on the subject of reviews have you considered review UK products? I only say this because I’m from the UK and there are a lot of people here who enjoy your reviews. Anyway, great post.

  13. Does using Betterment’s software actually aid customers in becoming more educated investors so that they eventually can transition to a more self-directed tool? Put another way, does Betterment give you fish AND teach you to fish?

  14. This sounds like a great option for someone like myself, who doesn’t have any experience. Thanks for the in-depth review!

  15. Sounds like the perfect investment option for a newbie like me. Your reviews are always so helpful, Joshua. Thanks!

  16. Hello Josh,

    Great Betterment review. I’ve not heard before about it but after reading your review I’ll surely check out.

    Thanks for sharing!

  17. As betterment sounds to be great platform for those who want to enter into investing world without much hiccups or stress. Hope there is no hidden factor with it, else it will soon lose its ground. Since everyone wants to have safer mode of investment with great future return.

  18. I’ve decided to finally sign up and let the professional do the job. Even though there are cost with betterment. I still think it’s a LOT cheaper than leaving my money at E-trade and doing the trades myself.

  19. With Betterment I’m consistently at 2.5% return on investment for 8
    months now 80/20 stock/bonds. But I think these are terrible results. Is it just a bad year for EFTs? What’s your take on this?

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