All You Need to Know about the Betterment Fees and Main Advisor Services
Although there is a fierce competition when it comes to the robo-advisors market, Betterment is currently the independent launches’ leader, revolutionizing the industry with its diversified portfolios and a wide range of features. It is a trustable platform that manages assets over 3.9 billion dollars. Moreover, it has a lot of registered clients due to its no minimum account policy. Here are some more details regarding Betterment fees and its features as well as options.
What Is Betterment?
Betterment is a leader in the robo-advisor‘s market, and it has gained a lot of popularity and clients’ trust since it was launched. Betterment fees range between 0.15 and 0.35 percent, which is an appealing aspect to many customers. However, the platform has a lot of registered clients not only because of Betterment charges but also for its goal-based tools.
Another strong competitive advantage that Betterment offers is a period of free account management of up to six months. Let’s not forget about their customer support service which is highly efficient. You can contact them by phone, e-mail or live chat. Their help desk program is from nine a.m. to eight p.m. during weekdays. On Saturdays and Sundays, they are reachable only between eleven a.m. and six p.m.
Why Is Betterment Great?
- It has hands-off investors.
- It provides account balances over 100,000 dollars.
- There is no requirement regarding a minimum balance level.
- The platform offers automatic rebalancing services.
- You will receive realistic and achievable goal-based tools.
Betterment Fees Review
Betterment fees are created based on your account balance. All the fees described below are annual charges. As you can see, this platform’s fee policy is created according to your deposited amount of money. Therefore, if certain market fluctuations create a modification in your balance and it makes it shift towards a more expensive fee tier, you will keep paying the lower rate. On the other hand, when your fee tier is raised due to investment growth, the platform will also reduce your fee according to the current situation.
Account Management Fee
- The accounts with balances under 10,000 dollars, will have a fee of 0.35 percent. This applies to those customers who deposit a minimum of 100 dollars each month. Otherwise, you will have to pay three dollars per month in fees.
- For the accounts that range between 10,000 and 99,999 dollars, Betterment fees are 0.25 percent.
- The lowest fees are for those accounts that achieve a balance equal or higher to 100,000 dollars. In this case, the fees are only 0.15 percent.
The investment expense ratio varies between 0.09 and 0.17 percent.
Types of Accounts Provided by Betterment
Betterment for Advisors provides the following account types:
- Individual accounts.
- Roth IRAs.
- Traditional IRAs.
- Inherited IRAs.
- Joint memberships.
- Trust accounts.
However, the clients were even more excited when the company has announced the launch of Traditional as well as Roth Individual Retirement memberships. On this occasion, the platform has also significantly lowered their fees. Therefore, Betterment fees multiple accounts options are now more affordable. As a part of their continuous effort to create a better platform, Betterment fees for intermediate shareholder transactions have also been lowered.
Many clients choose Betterment as their robo-advisor due to its background and features. It is a trustable company because its representatives have plenty of experience in the investment field. Moreover, this investment advisor is registered with SEC. Betterment is also a member of both FINRA and SIPC.
You shouldn’t worry about the security of your trades because this online brokerage site uses the highest standards of banking industry security. We talk about the 256-bit SSL data encryption.
Besides all the features and options presented above, Betterment also offers the following additional things:
- It provides an easy account setup. It will take only five minutes to create a new account and log in.
- There are no minimum limits when it comes to both deposits and withdrawals.
- As I mentioned before, there is no minimum account deposit required by the platform.
- You can offer your agreement to achieve access to an automatic deposits option. This way, you will not have to be careful to place a new deposit every month.
Betterment Target Audience
Betterment is a good robo-advisor, especially for two specific investors segments:
- Long-term passive investors. Usually, this category of investors has some previous experience as well as financial knowledge. They are called the Planner and Forgetters. Furthermore, they are patient with their money, and they can easily understand all the portfolio diversification concepts. These investors realize in which way fees will impact their long-term returns on investment.
- Financial novices. This category is the one of newbies or beginners. They don’t really have experience in the investment Most of them are searching for easy and quick ways to invest and maximize their returns. Also, they are not as patient as the first category or investors. Although they are not willing to make a lot of efforts to learn this new field, they also feel intimated somehow by the idea of starting an investment program. From my experience, they are either older professionals who want to save for their retirement, or they are millennials. The second group is skeptical when it comes to high-priced financial advice.
Betterment Pros and Cons
- The platform is easy to use and offers a flexible and intuitive graphic. You can move funds from an account to another in a quick and simple manner.
- It takes only a couple of minutes to set up a new account on their platform.
- They offer plenty of services and options suitable for both experienced investors and financial newbies.
- There’s no minimum deposit required.
- Betterment has some of the most affordable fees in the industry. Moreover, they are extremely straightforward. The higher your invested amount is, the smaller the fees are.
- There are no additional fees such as transaction, rebalancing, or trade charges.
- With their tax-coordinated portfolios, you will pay less for taxes while investing.
- If you are a higher net worth investor, Betterment might not be the perfect choice for you. If you are a pro when it comes to investment theory and you know your way with finding the proper allocation, you will probably not need a service like Betterment.
- An important downside is the fact that the platform only manages its own accounts, without the ability to allocate with external accounts.
- For the moment, the platform doesn’t support a two-factor authentication security. This is important because if it existed, it would be more difficult for potential hackers to get into your account.
Summing It Up
Most reviews talk positively about Betterment. It is one of the best and most effective online investment advisors available out there. It has lower fees compared to its competitors. In fact, Betterment fees are among the most appealing things offered by the company. Moreover, they provide plenty of features and options that attract a lot of clients. This is a good choice whether you are a financial newbie or an experienced investor.