Betterment Review 2020 (Advantages and Disadvantages)


The betterment is included among the best Robo-advisor who offers an automated investment as well as manages your accounts too. And you can access your investments with the help of your smartphone app or through a computer browser.

So, now the question comes up to you that What is betterment? To which we will find the answer below by analyzing the betterment review:

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What is betterment review?

The largest independent Robo-advisor industry setup is the Betterment. having an investment of at least $ 13.5 billion in assets. It is a New York City grounded company. And it was established in October 2008.

It uses Modern Portfolio Theory (MTP) to diversify betterment investments and to properly allocate its assets to different portfolios.

A view of Betterment and Wealthfront:

A short betterment review is provided in the table below:

Foundation Betterment Wealthfront
Initiated 2008 2008
Assets under management (AUM) $ 16.4 billion $ 20 billion
Number of accounts 444,000 250,000
Headquarters New York City Redwood City, CA

Betterment Signup:

While signing up for the betterment there is no need for money as you just need to fill up an ephemeral questionnaire which overall analyses your investment plans as well as your level of taking risks. Thus, afterwards, your portfolio is created which is a mix of at least 14 assets of different classes. Here, you’re each and every asset is depicted by individual exchange traded fund (ETF), by which you can trade in a variety of securities.

You just need to create your portfolio which will be managed by the betterment on a regular basis automatically. So, it performs the function of automatic dividend reinvesting, periodic rebalancing, Computerized deposits, Tax damage reaping, etc. for you and representing you. Though, there also exists taxable as well as tax-sheltered retirement accounts which are offered by the betterment.

Highlighted features include for betterment review:

  • Easy to use application
  • Retire Guide
  • It is Reasonably priced
  • Betterment review is the best option for:
  • Persons or individuals who are Intermediate investors
  • Persons or individuals who are Retired individual investors
  • Some college going students
  • Persons or individuals with low balances.
  • Persons or individuals who want automatic rebalancing.
  • As well as some Users who are searching for having goal constructed tools.

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Betterment Review Features

A short betterment review of features is presented in the table below:

Betterment Overview Automated investment management robo-advisor with extra features
Betterment Minimum Investment $0
Fees Digital – 0.25 % per year; Premium – 0.40 % per year
  • Taxable
  • Joint
  • Traditional IRA
  • Roth IRA
  • Rollover IRA
  • Trusts
  • Non-Profit
  • 401(k) Guidance
Top Features Offered
  • Betterment Automatic rebalancing of your portfolio
  • Betterment Tax-loss harvesting
  • Ability to purchase fractional shares
  • Automatic deposits available
  • Charitable giving help available
  • High-yield savings option available
  • Betterment Checking account 
  • Human advising available
  • Betterment Mobile App
Betterment Tax Loss Harvesting Provided
401(k) Assistance  Provided
Betterment Portfolio Rebalancing Provided
Socially Responsible Provided
Betterment Customer Service
  • Phone
  • Live Chat
  • Email
Advice Human Assisted Provided
Betterment Smart Beta saver Provided
Betterment Fractional Shares Provided
Betterment Portfolio
  • Stocks
  • Bonds
Financial advice packages
  • Getting Started – $ 149
  • Financial Check up – $ 199
  • College Planning – $ 199
  • Marriage Planning – $ 299
  • Retirement Planning – $ 399
Betterment expense ratio 0.07 % to 0.17 %
Betterment Mobile App
  • online version 
  • App Store for iOS devices
  • Google Play for Android devices
  • Minimum Investment: The Betterment Minimum Investment is $ 0 for Betterment Digital, and $ 100,000 for Betterment Premium.
  • Betterment Fees: The Betterment fees are different for Betterment Digital and for Betterment Premium. 
  • Betterment Digital: 0.25 % annual fee charged for Betterment Digital that also includes basic services and no minimum amount is required to get started.
  • Betterment Premium: 0.40 % annual fee is charged for Betterment Premium, although here a $ 100,00 minimum investment is required. Other than this it has No account closure fees or no annual fees, or any transfer fees associated.
$ 0 – $ 499 0.25 % per yr.
$ 500 – plus 0.25 % per yr.
  • Different Betterment Accounts: Some of the largest numbers of accounts are offered by Betterment. Likely, some of the betterment Accounts are as:
    • Individual and joint taxable (non-retirement) accounts
    • Traditional, Roth, SEP, and rollover IRAs
    • Trusts
    • External accounts can be linked for advice (but not managed)
    • Cash accounts (no charge for management)
  • Betterment Tax Loss Harvesting: The Tax-Loss Harvesting option is available only for the taxable accounts. Thus, the motive of betterment Tax Loss Harvesting is to save your taxes. Moreover, here following things are done:
    • Betterment direct indexing is done on a daily basis
    • All the warnings relating to the portfolio changes are seen with the help of Access Tax Impact Preview.
    • Appreciated assets are donated by using the means of charity
    • The Tax-Coordinated tool is used to distribute assets to its appropriate accounts that are taxable and non-taxable accounts.

Betterment Portfolio review

  • Stocks
US Vanguard US Total Stock Market
Large Cap Vanguard US Large-Cap Value
Mid Cap Vanguard US Mid-Cap Value
Small Cap Vanguard US Small-Cap Value
Foreign Vanguard FTSE Developed Market
Emerging Market Vanguard FTSE Emerging Markets
Socially Responsible iShares MSCI KLD 400 Social
Socially Responsible iShares MSCI KLD 400 Social

  • Bonds
US TIPS Vanguard Short-Term Inflation Protected
Muni iShares National AMT-Free Muni Bond
Corporate iShares Corporate Bond
Emerging Market Vanguard Emerging Markets Govt. Bond
Foreign Vanguard Total International Bond
US Short-Term iShares Short-Term Treasury Bond
US Total Vanguard US Total Bond Market

So, globally diversified stock and bond ETFs are available in the betterment portfolio.

Also, The Goldman Sachs betterment Smart Beta portfolio has an excellent performance in the market.

The portfolio Accounts are evaluated as well as rebalanced every month.

  • Betterment App review: Betterment Mobile App provides us with the following features:
    • the online version of the app is available.
    • It is available at the App Store for iOS devices, 11.0 that makes it iPhone, iPad, and iPod touch compatible.
    • It is also available on Google Play for Android devices, 6.0 and higher level devices.
  • Betterment expense ratio: Betterment accomplishes to keep its expense ratio or the ETF expense ratios between 0.07 % to 0.17 %
  • Betterment Rebalancing: Betterment Rebalancing is done on a daily basis. And it is Free on all the types of account.

Betterment Financial advice packages

Betterment Financial advice packages are offered that links you to a certified financial planner in order to get advice on matters. Here, practical advice is also entertained by the betterment. But some charges are charged by the betterment review or package cost, which are as follows:

  • Getting Started – $ 149
  • Financial Checkup – $ 199
  • College Planning – $ 199
  • Marriage Planning – $ 299
  • Retirement Planning – $ 399

Betterment Cash Reserve and Betterment Checking

This is a betterment new feature which provides 0.30 % APY. And easy account set up as well as access to Betterment financial advice. 

  • Betterment Cash Reserve: Some features included in cash reserve are as follows:
  • 0.30 % of APY is provided or offered
  • You are insured in FDIC up to $ 1,000,000
  • There is No minimum balance required
  • There are No fees on balances
  • Unlimited withdrawals are offered as compared to a limit of six withdrawals per month in most of the savings accounts
  • within 1 – 2 business days you can transfer money between savings and a linked checking account
  • Betterment Checking: Some features included in checking are as follows:
    • Your ATM fees are reimbursed worldwide
    • There are No account fees
    • There are no overdraft fees
    • There is No minimum balance
    • You are FDIC insured up to $ 250,000
    • You are provided with Visa debit card

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  • Betterment Account protection: Betterment provides protection to its accounts with Securities Investors Protection Corporation (SIPC) by offering coverage up to $ 500,000 in cash and securities as well as $ 250,000 in cash.
  • Betterment SmartDeposit: In case the bank balance of the user goes over a specified amount then betterment automatically make deposits.
  • Betterment Flexible Portfolios (New feature): This new feature of betterment Flexible Portfolios is available for investors who have $ 100,000 or more as their investable assets. So, that you can customize your portfolio as well as adjust your individual asset class weights. And you will also receive feedback from the Portfolio Analysis tool while you make a selection in the betterment portfolio.
  • betterment saving account review: A betterment high interest savings account pays interest amounting to 1.37 % APY.  Even after depositing $ 10 there is no minimum balance, as well as no program fees associated in the betterment saving account. Moreover, Visa debit card facility is also provided.
  • Betterment IRA accounts review: both betterment traditional and betterment Roth IRA accounts are offered by the betterment, where the investment process is automated. The betterment automatically balances the users account based on the market betterment performance. Similarly, in case of betterment SEP accounts the accounts are automatically rebalanced. 

Unique Features of the Betterment:

Some of the unique features which are being offered by Betterment are as follows:

  1. One Year Free — While opting for betterment you get a one year free service from their end in case you deposit $ 10,000 or more amount.
  2. Tax Damage Reaping for Spouse — In case to save tax, you can add your spouse account also which will maximize your tax competence.
  3. Shrewd Deposits — If you forget to deposit money into the betterment account, then there exists an option by which it directly makes deposits from your bank account.
  4. Communicate with Financial Expert through Betterment’s App — If you need any help or advise or opinion or are confused about the investment plan. Then Betterment has an option through which you can communicate to Betterment experts and take their opinions.
  5. Tax-Coordinated Portfolio — here your tax efficiency is maximized by allocating your investments wisely between your betterment tax overdue and betterment taxable accounts.
  6. Monetary Guidance Packages — An individual based guidance or opinions packages are made up to offer and assist the customers of betterment in need. Here, help is provided to individuals from licensed as well as experts’ financial persons.
  7. Generous Giving — Betterment has an option in which the individual can donate their shares or earning as a charity if they desire to do so.

Advantages of the Betterment:

Some of the advantages of the Betterment option are as follows:

  • No money is required to open up the Betterment account.
  • You do receive Human advice and assistance
  • Tax damage harvesting is provided on all the accounts in the betterment
  • A fee of 0.25 % is charged which is quite low. It is charged on account having a balance of $ 2 million and less.
  • And account having $ 2 million and above balance, a fee of 0.15 % is charged by betterment.
  • large, medium and small capital worth betterment stocks are being included and allocated
  • betterment Advice by experts is available
  • The betterment smart saver option of Beta is available
  • Multiple portfolio options are available
  • Communally accountable investment options are made available for knowing the importance of investment
  • A Personal financial advisor is available who charges a nominal annual fee of 0.40 % for the accounts having a minimum $ 100,000 amount as a balance
  • Outside account examination is performed which further includes 401(k) plans

Disadvantages of the Betterment:

Some of the disadvantages of the Betterment option are as follows:

  • Diversification of the assets option is not available in the betterment portfolio.
  • Instead of the low rates, the benefit of low rates is not available to the investors having less than $ 2 million available balance.
  • External accounts are provided but they are not considered while allocating the assets.

How much does the betterment cost?

Betterment cost involves betterment fees that are different in case of betterment premium and betterment digital. So, the cost of the betterment is as follows:

Plan Minimum Annual fee Features
Digital $ 0 0.25 %
  • Messaging via App 
  • financial experts
  • Rebalancing, TLH + and Retire Guide
Premium $ 100,000 0.40 %
  • Messaging via App 
  • Unlimited calls with CFPs Support with some external investments

Is betterment safe to use?

Yes. betterment is safe to use as your funds are managed by using online accounts. Moreover, the new Cash Account service is also offered.

is betterment worth it?

After analysing the betterment reviews, by now you might be knowing that betterment is a great option to consider for the beginner’s investors who want to expand their portfolio.

Though, in case you are using Vanguard for all other purposes then betterment may not prove out to be a better option to consider. You can also see Vanguard VS Betterment for making a better choice.

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How does betterment work?

Betterment working is the same as all other robo-advisors. It offers tax-loss harvesting on taxable accounts and reviews your investments on daily basis in order to reduce the tax exposure.

Is betterment legit?

Yes, betterment is legit as it is a good robo-adviser scheme which even reduces the tax of an individual. Apart from providing some of the basic features such as, 

  • Betterment Tax Loss Harvesting
  • Mobile App
  • Cash Reserve and Betterment Checking
  • Account protection
  • SmartDeposit
  • Flexible Portfolios 
  • Shrewd Deposits 
  • Financial Expert through Betterment’s App 
  • Tax-Coordinated Portfolio 
  • Monetary Guidance Packages and others.

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Betterment fees are very low even in case of hiring a traditional financial advisor. Moreover, it provides it users a more all-inclusive plan that will invariably help them to diversify their portfolio and achieve their goals. Therefore, betterment is a daunting competitor to others such as wealthfront. You can even compare betterment vs wealthfront as which one is best for you? In case you are muddled between the two.


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