Betterment vs Fidelity

  • Low Management Fees
  • Tax-loss harvesting available
  • Automatic portfolio re-balancing
  • Low management fees
  • Tax-loss harvesting available
  • Automatic portfolio re-balancing

Betterment and Fidelity are two similar products. This is a comparison between one of the industry’s first dedicated investment robo-advisors and a traditional broker offering robo-advice. With 15% of current investors having started their journeys in 2020, good advice is essential to making money in the long term.

So, which one should you choose as your robo-advisor of choice? Here is everything you need to know about the similarities and differences between the two.

Betterment Overview

Betterment was launched in 2008, which makes it one of the earliest uses of robo-advisor technology. Millions of investors have taken advantage of Betterment to manage their portfolios of stocks and bonds.

In our Betterment review, we praise the fact that it keeps things simple. Just fill in the initial questionnaire and give some basic details about your income, goals, and risk tolerance. Then, Betterment will automatically suggest some options for building your new investment portfolio.

After you’ve invested in your portfolio, you don’t need to do anything else. Just let it run on autopilot.

Of course, for more confident investors, you can always manually alter your stock/bond allocation. You’re not locked into that first investment.

Betterment Details

Account Minimum $0
Management Fees 0.25%/0.40%
Account Types Brokerage, Saving, Checking, Trust, Roth IRA, Traditional IRA, and SEP IRA
Investment Type Exchange-Traded Funds (ETFs)

The big advantage of Betterment investing is that there are no minimum account balances or minimum investments. This robo-advisor handles all the work of diversifying your portfolio for you by investing broadly in stocks and bonds.

Unlike other robo-advisors, when you sign up with Betterment you have access to all the major account types, such as IRAs and trust accounts. You can even pair it with your checking and savings accounts.

Whether you’re saving for a house deposit or retirement, Betterment is equipped to align your portfolio with your goals.

Betterment has released several specialized portfolios to help you reach your financial goals, including:

Betterment Fees

Since its 2008 launch, this platform has redefined what low-cost investing is all about. There is just a single management fee to take into account: 0.25% for Betterment Digital members and 0.40% for Betterment Premium members.

Note that there are some expense ratios on most ETFs, but these are not fees Betterment charges. Plus, they are are still low at only 0.07% to 0.15%.

Why would you want to pay more for Betterment Premium? The advantage is access to CFP professionals. To qualify for this membership level, you must have invested at least $100,000 on the platform. For Betterment Digital members, you can still book a 45-minute call, but it costs $199.

Betterment Pros

  • Low management fees
  • Tax-loss harvesting available
  • Automatic portfolio re-balancing

Betterment Cons

  • No real estate investments
  • Lack of customization
  • External accounts struggle with compatibility

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.