Betterment Review: All You Need To Know About Investing With This Robo-Advisor

Betterment's robo-advisory model still ranks highly overall.

Betterment is a financial services company that began in 2010 with the mission to make investing simpler for everyone. It pursued this mission by pioneering the “robo-advisory” industry, which uses statistics-based algorithms to compute optimal portfolio allocations for investors. Since that time, the firm has broadened its financial services capabilities, and now it offers customized retirement plans, access to financial advisors and a cash management suite, and will soon include a checking account with a Visa debit card. 

Over the years, the firm has tweaked its core robo-advisory product, experimenting with different pricing strategies and capabilities. However, it has always relied on Nobel Prize-backed research in developing its algorithm and focused on keeping costs as low as possible for customers. 

To determine if Betterment is the right advisory firm for you, there are two main questions to answer. First, are you comfortable with a firm that’s primarily a robo-advisor, even though it now offers access to financial advisors? And second, how does Betterment stack up against its numerous competitors? To help you answer those questions, here’s a comprehensive look at the products and services offered by Betterment, including a comparison with competitors. 

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Quick Take

As a pioneer in the robo-advisory world, Betterment has done a great job in honing and refining its core product. When compared with online and full-service brokerage firms, its product lineup may seem lacking; however, if you’re searching for the simplicity and low costs which are the hallmarks of robo-advisors, you’ll likely be happy with Betterment’s offerings.

Annual Management Fee 0.25%/0.40% (Premium)  
Account Minimum $0/$100,000 (Premium)  
Promotion $5,000 of free asset management per customer referral 


Here’s the information you’ll find in this Betterment review:

About Betterment

Betterment’s approach to portfolio management is to drive down costs and invest more efficiently through technology. Since its founding in 2010, Betterment has grown to become the largest independent online financial advisor in the world. As of June 30, 2019, the firm had more than $16 billion in net equity.

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Pros and Cons of Betterment

Betterment is one of just a few online-based firms that provide certified financial planner-based consultations, but like all of its competitors, it has both pros and cons. 


  • Premium customers have ongoing access to certified financial planners
  • Management fees of just 0.25% annually at the Digital tier
  • No account minimums for Digital tier
  • $0 commissions (part of overall fee package)
  • Fractional shares are available for purchase


  • Only a limited number of portfolios and ETFs are available
  • No individual stock or ETF trading
  • A la carte pricing for CFP access at the Digital tier can be expensive

Related: Mutual Funds vs. Stocks: How You Should Invest

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Betterment at a Glance

Here’s a quick look at the features and benefits of Betterment:

Betterment at a Glance
Account Minimum Digital: $0; Premium: $100,000 
Stock Commission N/A (no individual stock trading)
Option Commission N/A (no options trading)
Commission-Free ETFs All ETFs in model portfolios are included in the annual fee.
Zero-Transaction-Fee Mutual Funds N/A (no mutual fund trading)
Investment Selection Limited to ETFs selected by Betterment, divided across six categories of equities and eight categories of fixed income 
Customer Service M-F 9 a.m.-6 p.m. EST; S-S 11 a.m.-6 p.m. EST, phone or email 
Mobile App Yes 
News and Research Basic, in FAQ format 
Miscellaneous Fees ETF expenses, a la carte CFP consultation fees for Digital tier customers between $199 and $299 
Current Promotion $5,000 managed for free for each referral, up to $25,000. Give Betterment to your friends and the company will manage up to $25,000 of investments for free for a year.

For each friend who joins and funds an account, Betterment will manage $5,000 of your balance free for a year. The company will also manage $5,000 of your friend’s investment balance free for a year. You can receive this reward five times for up to $25,000 managed free for a year.

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Individual Services Reviews

Betterment is primarily a robo-advisor, so it doesn’t offer the wide range of brokerage services offered by many well-known names in the financial service industry. But for investors seeking this type of broker, Betterment excels in many categories. Here’s a breakdown of how Betterment delivers its services to customers across various categories. 

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Trading Experience

Although the mathematics and statistics behind the Betterment robo-advisor are complicated, the trading experience provided to customers is simple and seamless. There’s a four-step process to begin investing with Betterment. First, you’ll be asked questions about what you’re saving for. Next, the algorithm will build a portfolio of ETFs for you based on your answers. After that, the firm will help you decide how much to invest. Lastly, the robo-advisor will invest and manage your money, reinvesting dividends and making allocation shifts as the algorithm dictates. 

Betterment doesn’t offer the traditional “trading experience” you might get with other online brokers, such as Fidelity or E-Trade, as it doesn’t offer a customer-facing trading platform — all of your trading is handled in-house by the algorithm tailored to your goals and risk tolerance. 

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A Beginner’s Guide: How To Invest In Stocks

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Account and Investment Minimums

Betterment has no account minimums for its basic, Digital platform. For the financial advisor-based Premium platform, the account minimum is $100,000. 

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Commissions and Fund Expenses

The annual fee you pay for account management at Betterment includes all of your commissions and trading expenses. Individual ETFs within portfolios do have their own expense ratios, but they are the same as if you bought any ETF yourself on the open market. Betterment doesn’t charge any excess trading or management fees when portfolios are reallocated or rebalanced, or when new purchases or sales are made.

Learn: How To Decide Between Mutual Funds and Stocks

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Trading Technology

As Betterment doesn’t offer an online trading platform, it doesn’t have the same types of trading technology as online trading firms. All trades are executed at no additional charge by Betterment’s advisory service.

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Betterment’s driving purpose is to make investing more accessible, and its trading platform reflects this simple and customer-friendly approach. The user interface is beautifully done and easy to understand. There is a lot of data entry required to open and set up your account, but after your portfolio is established, the interface is intuitive and full of useful information.

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Mobile and Emerging Tech

As Betterment is a “next-wave” financial platform, it offers a mobile app with all of the functionality of the desktop. Entering information for account setup can be easier using a computer, but the mobile app offers a great user experience for monitoring and maintaining portfolios. 

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Range of Offerings and Investment Selection

Betterment only offers ETF portfolios that are managed by its robo-advisor, so you won’t find a wide range of investment options. For example, if you decide you want to add some individual stocks or bonds to your Betterment portfolio, you’re out of luck. You’ll have to buy those types of securities from a different brokerage. Of course, with Betterment managing your portfolio, you also won’t have to make the toughest decisions of investing, such as when to sell a stock.

Within the Betterment universe, portfolios are constructed out of six broad equity categories and eight fixed-income categories, as follows: 

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  • U.S. Total Stock Market
  • U.S. Value Stocks: Large-Cap
  • U.S. Value Stocks: Mid-Cap
  • U.S. Value Stocks: Small-Cap
  • International Developed Market Stocks
  • International Emerging Market Stocks
  • U.S. High-Quality Bonds
  • U.S. Municipal Bonds
  • U.S. Inflation-Protected Bonds
  • U.S. High-Yield Corporate Bonds
  • U.S. Short-Term Treasury Bonds
  • U.S. Short-Term Investment-Grade Bonds
  • International Developed Market Bonds
  • International Emerging Market Bonds

Each investment category has a primary ETF that is used for investment, although some categories may have one or more additional, secondary ETFs. For example, the selected ETF for the U.S. Short-Term Investment-Grade Bonds category is ticker symbol NEAR, but the U.S. Municipal Bonds category uses the ticker symbol MUB as its primary ETF and a secondary ETF with the ticker symbol TFI.  

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News and Research

Betterment doesn’t provide the type of up-to-the-second market data and commentary you might find at some online or full-service brokerages. However, this is befitting its mission to offer easy-to-understand, robo-advised portfolios rather than individual stock and bond trading. You can find answers to general investing questions in the firm’s FAQ section, but you won’t find the type of in-depth stock research or insights you might expect from a stock brokerage. 

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Customer Service

Betterment offers email and phone support to its customers. Customer service can be reached from 9 a.m.-6 p.m. EST on Monday through Friday, and from 11 a.m.-6 p.m. EST on Saturday or Sunday. CFP professionals can be consulted by appointment for Digital-tier clients or on an ongoing basis for Premium-tier customers. 

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Betterment has various policies in place to address data security, fraud protection, privacy and advanced login protection. Browser encryption, secure servers, automatic logout and two-factor authentication are just some of the many protective features you’ll find when using Betterment’s systems.

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Depending on your perspective, costs are generally pretty low at Betterment. Traditionally, full-service brokerage firms would charge 1% or more of assets — sometimes, much more — to professionally manage and monitor a portfolio. At just 0.25% per year, the Digital plan at Betterment seems to be fairly low-cost, considering you’re getting a diversified portfolio of ETFs tailored to your risk tolerance and investment objectives, and there are no additional trading costs along the way. Compared with competitors, the fee is higher than some and lower than others.  

Recently, many online brokerages such as Schwab and Fidelity have announced that they will no longer be charging commissions for individual stock and ETF trades, so this is another data point for comparison with the Betterment strategy.

Learn: Investing for Beginners: What First-Time Investors Need To Know

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What Betterment Is Best For

Betterment is best for the following features:

  • Customer service
  • Commissions and fund expenses
  • Usability
  • Mobile and emerging tech

Betterment’s focus on making investing easier extends to its customer service and mobile tech offerings. Commissions are not zero, as with some online stock brokerages, but Betterment is not a do-it-yourself financial services firm. That 0.25% annual fee, which amounts to just over $20 per month on a $100,000 portfolio, includes the planning, allocating, monitoring and rebalancing of your portfolio without any additional charges.

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Where Betterment Falls Short

Here’s where Betterment comes up short compared with some other brokers:

  • Range of offerings and investment selection
  • News and research 

Betterment is not a stock-trading firm, it’s a robo-advisor. As such, its customers don’t really need the moment-by-moment tracking of stock prices and market movements that do-it-yourself investors might prefer. However, it’s true that there’s also not a wide variety of ETF options in Betterment’s portfolios either.

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Current Promotions

Betterment doesn’t currently offer any sign-up bonuses, but it does offer to manage $5,000 of your portfolio for free with each referral, up to a $25,000 maximum.

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Comparison: Betterment vs. Other Brokers

Betterment is hard to compare with traditional online brokers like E-Trade and Fidelity. A more apt comparison is with fellow robo-advisors, as outlined below. 

Betterment vs. Other Robo-Advisors
Broker Account Minimum CFP Access Fees
Betterment Digital $0 By appointment, from $199 to $299 0.25% annually
Betterment Premium  $100,000 Unlimited 0.40% annually
Personal Capital  $100,000, $200,000 or $1 million Either a financial advisory team, two dedicated financial advisors or an investment committee 0.89% annually on amounts up to $1 million 
Schwab Intelligent Portfolios Premium  $25,000 Unlimited One-time planning fee of $300, then $30/month
Fidelity Go  $0 None 0.35% annually

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Should You Invest With Betterment?

If you’re a do-it-yourself trader, Betterment isn’t the best option for you. However, if you’re new to investing, have a smaller amount to manage or feel more comfortable entrusting a firm to run your portfolio, Betterment can be a solid choice.

One of the strengths of Betterment in the robo-advisory world is that it has two tiers of pricing and service for customers. The original, traditional robo-advisory plan, now known as the Digital plan, charges just 0.25% annually to manage portfolios of any size, with no minimum. This level can be a great entry into investing for those new to the markets, as they’ll become familiar with how to balance risk and reward and the value of diversification across asset classes. With its newer, more advanced Premium platform, Betterment is expanding its appeal to customers with larger portfolios that need more advanced services.

The Premium tier both has a higher minimum balance — $100,000 — and a higher annual fee — 0.40% of assets — but it provides access to certified financial planners and other financial professionals who can provide a much higher level of personalized service. Of course, one of the key attributes of a certified financial planner is that these advisors have a fiduciary duty to clients, meaning they must put your financial interests ahead of their own. This type of impartial, professional advice can be invaluable and is usually only found at the best brokers, so it can be worth far more than the 0.40% annual fee to many investors. 

Overall, Betterment offers an attractive package for both newer clients and those with more substantial assets. Active stock traders or those looking for zero-commission trading won’t be happy here, but investors seeking long-term diversified portfolios may appreciate the simplicity and scientific modeling that they can get at Betterment. With 10 years of experience in the still-new robo-advisory field, Betterment has tweaked its model enough to be an industry leader. The bottom line is that if you’re looking for a robo-advisor, Betterment has plenty to offer. If you’re looking for a traditional brokerage, it’s best to look elsewhere.

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For the latest GOBankingRates evaluations of other top online brokerages, the best retirement accounts and other information on investing, check out these articles:

Rates and fees are accurate as of Jan. 23, 2020, and are subject to change.

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About the Author

John Csiszar

After earning a B.A. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years. Along the way, Csiszar earned both Certified Financial Planner and Registered Investment Adviser designations, in addition to being licensed as a life agent, while working for both a major Wall Street wirehouse and for his own investment advisory firm. During his time as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans for hundreds of clients.

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Betterment Review: All You Need To Know About Investing With This Robo-Advisor
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