In a nutshell: SoFi Automated Investing provides a simple, incredibly low-cost investing platform perfect for beginners and cost-conscious investors. Plus, its $5 minimum makes it easy for anyone to get started.
SoFi’s Active Investing also has commission-free stock and ETF trading, though it does lack some advanced trading features. Overall, SoFi Invest is a solid investment and trading platform.
Once known for student loan refinancing, SoFi has expanded to offer a variety of financial services, including trading and a robo-advisor. We will cover each of those services in this SoFi Invest review.
SoFi Invest is best for:
Those who need the help of a financial advisor
Average expense ratios are 0.05%.
$75 for outgoing transfer.
Total of 10 different portfolios from 13 different asset classes.
Five each for both retirement and brokerage accounts, with five risk tolerance profiles to go with them.
Individual, joint, traditional IRA and Roth IRA, SEP IRA.
Minimal tax optimization.
Automatic rebalancing with 5% drift.
Savings Account/Cash Management
All users have access to SoFi Money.
Live chat, phone, and email support.
Available 8 a.m. to 8 p.m. Eastern M-Th; 8 a.m. to 7 p.m. Eastern Friday.
All users have free, unlimited access to human advisors.
If you’ve heard of SoFi but aren’t familiar with everything it has to offer, you may know it for refinancing student loans. More recently, the company has expanded its services to offer personal loans, mortgages, and mortgage refinancing. We’ll cover all that and more in this SoFi Invest review.
SoFi Invest has joined the ranks of the firms offering automated investing. In addition, it offers active investing for those who want more control. This SoFi Invest review will explore all of that and more.
While the advanced investor may find it lacks some of their favorite features, SoFi Invest is great for those looking to minimize fees. Plus, if you don’t have much to invest, SoFi isn’t a bad place to start.
SoFi Invest Review: What Is SoFi?
SoFi (short for Social Finance, Inc.) was founded by Stanford business school students in 2011. The company is still based in the area, calling San Francisco its home.
In 2012, it introduced student loan refinancing. Since that was initially the only service the company offered, people equated that with its business. But it offers much more than that. SoFi provides a variety of financial products and wants to help its customers reach financial independence.
It expanded its product line in the ensuing years, added several new services:
In 2014, it added mortgages.
In 2015, it started offering personal loans.
In 2019, it launched SoFi Money and SoFi Invest.
As you can see, SoFi Invest is one of its newer products, so it doesn’t have a long track record. Don’t worry—we’re going to cover all the details in this review. For now, it suffices to say its Automated Investing has no management fees and its Active Investing has commission-free trading.
Note that all SoFi Invest customers have access to SoFi Money, a high-interest savings account that pays you a regular APY.
SoFi says its core values define the company. They include everything from putting members’ interests first to embracing diversity. Basically, they want to do everything they can to keep their customers happy.
SoFi Automated Investing
SoFi Automated Investing is SoFi’s automated investing platform. We will briefly cover it in this mini SoFi Automated Investing review.
The first thing that may jump out to passive investors is the lack of management fees. Indeed, SoFi has a 0.00% management fee for its Automated Investing product. That makes it ideal for beginner investors who just want to earn a return.
That being said, SoFi’s automated portfolios consist of a variety of exchange-traded funds (ETFs), and each of them comes with their own fees. On the plus side, the expense ratios of the ETFs SoFi uses are quite low. The average expense ratio is 0.05%.
SoFi’s automated investing platform doesn’t have the most extensive set of features, though that shouldn’t be surprising considering it has no management fees. Nevertheless, it does offer access to certified financial planners (CFPs), which is quite impressive.
Goal planning, which suggests portfolios to meet your goals
Free investment advice from certified financial planners (CFPs)
Auto Invest Portfolios
SoFi Automated Investing offers a total of 10 different portfolios from 13 different asset classes. It has five each for both retirement and brokerage accounts, with five risk tolerance profiles to go with them.
SoFi gives a nice breakdown of each portfolio and helps you understand the rationale behind it. The way the portfolios are laid out is based on a number of factors, but it makes sense in terms of how they fit your risk tolerance.
As you can see, it uses ETFs from different brokerages including Vanguard, iShares, and some of its own ETFs. This helps keep investment fees low, meaning your fees are extremely minimal overall.
One thing that is important to note is that it is not possible to change your strategy once it is selected. In other words, if you select a conservative strategy for your retirement account, you can’t change it to an aggressive strategy later.
So, you need to be sure you pick the right strategy for your SoFi Invest account.
Fees and Pricing
As we’ve mentioned, there are no fees for opening a SoFi Automated Investing account. There are no monthly or inactivity fees, either. The only fee to speak of for these accounts is a $75 fee if you want to roll it over to another institution or close it for any other reason. In addition, ETFs come with fees, but those are charged by the fund itself, not SoFi.
Where Automated Investing Falls Short
What you get with SoFi Automated Investing isn’t bad for a free service. The main thing you give up compared to robo-advisors like Betterment is tax-loss harvesting. However, Betterment has a 0.25% management fee at its lowest level.
SoFi Active Invest
The aptly-named SoFi Active Invest is meant for active investors. In addition, it’s ideal for those who want complete control over their accounts.
There are no trading commissions, once again helping you keep fees low. If an active trading platform is what you’re after, SoFi Active Invest is the one to research.
Whereas you can only invest in ETFs in an automated account, SoFi Active Investing allows you to buy a variety of different investments. That includes fractional shares, which SoFi refers to as fractional “Stock Bits.”
Active Investing features include:
Active trading platform
No account minimums
Fractional shares trading (Stock Bits)
Ability to purchase cryptocurrencies
Access to free certified financial planners (CFPs)
This service is essentially a basic brokerage account that lets you buy a few different types of investments with no commissions. That even includes cryptocurrencies such as Bitcoin and Ethereum.
In addition to crypto, Active Investing allows you to purchase individual stocks and ETFs. Both stocks and ETFs can be purchased using Stock Bits, meaning you don’t have to buy full shares.
Invest in IPOs
Another feature of SoFi Active Invest is that eligible members have the chance to invest in upcoming IPOs. This is a very interesting feature because it allows you to invest in a company before it goes public. In other words, before it is listed on an exchange such as the NYSE.
If you’ve been keeping your eye on an up-and-coming company and want to invest, this could be a great opportunity. Since the company will not even be public yet, so the share price will be relatively low.
As SoFi notes, there is risk involved with investing in an IPO. Nevertheless, it’s an intriguing opportunity for sure.
Starting in March 2022, SoFi added margin investing to SoFi Invest. This enables you to borrow money against your current SoFi investments to increase your buying power. You can purchase both stocks and ETFs on margin. Margin investing is also worthwhile if you don’t want to wait two business days to buy a new stock after selling previous ones.
SoFi is offering an initial 2.5% margin rate, but that doubles to 5% on June 1, 2022. To enable margin trading on your account, you need to apply through “My Account.”
Fees and Pricing
Once again, there isn’t much to say here. SoFi Active Investing has no trading fees or commissions, so you can trade for free. And, as mentioned, it also gives you access to CFPs for no fee.
And just like Auto Invest, the only fee for Active Invest is a $75 outgoing fee. That is charged if you close your account and move your money elsewhere.
Where Active Investing Falls Short
Although Active Invest allows you to do quite a bit without paying a single fee, that doesn’t mean it includes everything. There are several types of assets you can’t trade on the platform, including index funds and mutual funds. Plus, you can’t trade certain niche assets, like futures and forex.
Active Investing also lacks certain advanced features, such as stop-loss orders. Given that this is a commonly-used feature, some active traders may find the platform a bit lacking for their overall needs.
SoFi puts forth a great effort in terms of customer support. As mentioned earlier, the company lets you speak to financial advisors for free through live chat, phone, or email.
In general, SoFi’s financial advisors don’t provide stock picks or other specific investment advice to its clients. Instead, they mainly guide clients on how best to use SoFi Automated Invest.
The phone number to reach SoFi customer support is 1 (855) 456-7634.
How Does it Compare?
You might be wondering how SoFi Invest stacks up against some of the alternatives. Let’s see how it does compares to the competition.
SoFi Invest vs. Vanguard
Vanguard remains something of a benchmark for all types of investors. In many ways, brokerages have used Vanguard as a baseline for their services. And, in many ways, Vanguard is still excellent. So, how does it compare to SoFi?
Vanguard allows you to purchase a wide variety of investments with no fees. Online trades are free, including equities, options, and ETFs. Trades placed over the phone will incur a fee up to $25 (waived if you have $1 million+ in assets).
Although Vanguard remains an excellent broker, there are some things it lacks. While it’s still great for passive investors who just want to buy index funds, it does lack fractional shares.
SoFi Invest, on the other hand, does allow you to purchase fractional shares. Plus, it has no fees for trading or for its robo-advisor, Auto Invest. And you have access to CFPs for no fee.
The closest equivalent Vanguard has to SoFi’s Auto Invest is Vanguard Digital Advisor, but it comes with a 0.10% management fee. If you want access to financial advisors through Vanguard, you’ll have to sign up for Vanguard Personal Advisor Services, which comes with a 0.30% fee.
SoFi Invest vs. M1 Finance
Given that M1 Finance is a more modern brokerage, it’s not a huge surprise that it is a better comparison to SoFi Invest than Vanguard. Indeed, SoFi Invest and M1 Finance are quite similar, although they do have some differences.
M1 Finance, much like SoFi Invest, has both DIY investing as well as portfolios built by its team of experts. The main difference here is that M1 is more flexible. You can add one of its so-called “expert pies” to an existing portfolio, or use it as-is. But you can pick and choose how you want to set it up, unlike SoFi Auto Invest, which locks you into one strategy.
M1 also has commission-free trading and fractional shares. The main thing it lacks compared to SoFi Invest is access to financial advisors, which M1 doesn’t offer at all.
SoFi Invest is best for those who want guidance in building their portfolio with the absolute lowest fees. In that way, Auto Invest is ideal, especially since it gives you free access to financial advisors.
As mentioned before, SoFi Invest doesn’t give you access to certain investments, such as mutual funds. However, M1 Finance doesn’t have mutual funds either. On the other hand, SoFi Invest allows you to buy cryptocurrency—something M1 Finance lacks.
You may still have lingering questions about SoFi, and we’re going to answer some of them here.
Is SoFi Invest Legit?
Yes, SoFi Invest is a legitimate service. According to its website, the Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor. (Note: SoFi Wealth is the former name of SoFi Invest).
It goes on to say that brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC-registered broker-dealer and member FINRA/SIPC.
How Does SoFi Invest Make Money?
SoFi Invest makes money in a number of ways. With SoFi Active Investing, there are many ways the company makes money. For example, it earns money on un-invested cash. It also earns interest on securities lent to certain institutions.
Another way SoFi Invest makes money is through rebates from market makers through its clearinghouse, Apex Clearing. This is important to know because this is what is known as payment for order flow. In other words, SoFi earns money by selling the order flows of its customers.
Is SoFi Really Free?
SoFi really is free. The previous question explains how that is possible; namely, the fact that it sells its order flows. While this is a somewhat controversial topic, where the customers become the product in a way (similar to Facebook and Twitter), it is indeed true that you can use SoFi without ever paying any fees.
Does SoFi Have Tax-Loss Harvesting?
SoFi Invest does not currently offer tax-loss harvesting. There are plans to add more features in the future, so that may change. However, it is not currently offered. If you want a great robo-advisor that offers tax-loss harvesting, check out our Betterment review.
What Benefits Do I Get from Using SoFi Money?
SoFi Money is a checking and savings account. You gain 0.25% interest annually, which is subject to change based on the machinations of the U.S. economy and Federal Reserve.
It includes $1.5 million in FDIC coverage. This is especially beneficial as it’s six times more than the average high street bank.
There are no account fees, and its strong ATM network means you’re entitled to free ATM withdrawals when using a supported ATM.
Are SoFi Invest Financial Advisors Reliable?
All SoFi CFPs hold a Series 65 designation. This means they’re legally bound to operate in your best interest. Failure to do so could open them up to legal action.
Furthermore, CFPs at SoFi are classified as noncommissioned advisors. Any recommendations they make are not influenced by monetary gain. Unlike some conventional financial advisors, these professionals gain nothing through advising you to take specific actions.
Can You Day Trade with SoFi Invest?
In some limited circumstances, it’s possible to day trade with SoFi Invest. Accounts with balances under $25,000 will be restricted from day trading for 90 days if found to be a pattern day trader.
Accounts with balances higher than $25,000 can day trade if they do not exceed the account’s buying power.
On the whole, SoFi is not a platform aimed at day traders, so it’s best avoided for this purpose.
SoFi Invest Reviews and Testimonials
We’re big fans of SoFi Invest, but we are by no means the only ones. Here is how the SoFi app fares:
On the Apple App Store SoFi scores 4.8/5 with over 73,000 ratings.
On Google Play, the SoFi app has a 4.2/5 with over 8,000 ratings.
But how about what real people are saying? Consumer Affairs provides verified reviews from real people about SoFi. Here are what a couple of them have to say:
“I started with a loan consolidation and it was a great process. I waited about a year and applied for a mortgage. It also was a wonderful experience. I can honestly say my interactions with SoFi have been superior to other lenders I have done business with over the years.”
“The application was easy and efficient. Every person I talked with was very pleasant and professional. The entire process was a great experience and the outcome was exactly what I needed. I highly recommend this company.”
Without a doubt, SoFi Invest has some excellent features. Its Auto Invest portfolios have no management fees—something you’d be hard-pressed to find elsewhere. Plus, it allows you to buy fractional shares and gives you access to financial advisors for free.
Keep in mind, though, it doesn’t allow you to make changes to your Auto Invest portfolio once your account is set up. Another thing that would be nice to see is tax-loss harvesting, although that might be asking too much of a robo-advisor with no management fees.
SoFi Active Invest lets you buy all the same investments, but you aren’t locked into a particular portfolio. It also allows you to buy cryptocurrencies and has the same free access to financial advisors.
However, Active Invest doesn’t allow you to buy investments such as mutual funds and index funds—you’re mainly limited to stocks, bonds, ETFs, and crypto. Thus, you can only choose from the most popular investment choices for your investment portfolio. And it lacks certain advanced features other brokers have, such as stop-loss orders.
Overall, SoFi Invest has some nice options, especially for those who just want to invest with the lowest fees possible. Plus, that added guidance of free financial advisors is very nice to have.
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.