Betterment Review 2024 - Best Robo-Advisor?

TL;DR

Betterment is an automated robo-advisor that offers passive investing through index funds, with low fees and personalized asset allocation.

Transcript

• So in this video today, we're going to be doing a review of the robo-advisor known as Betterment, which is essentially an automated solution for passively investing your money into the market. So we're gonna cover, basically, what Betterment is, what they're offering, what they charge in fees, and then what may make them unique when it comes to i... Read More

Key Insights

• 🤖 Betterment is a robo-advisor that automates passive investing, providing personalized asset allocation and risk management.
• 😘 The platform eliminates high minimum investments and offers lower fees compared to traditional financial advisors.
• 🌱 Betterment offers two plans, a basic plan with no minimum investment and a fee of 0.25%, and a premium plan with access to human advisors and a minimum investment of $100,000 and a fee of 0.4%.
• 👻 Tax-loss harvesting is a unique feature that allows investors to offset capital gains through strategic selling and repurchasing of investments.
• 🐕‍🦺 Betterment also provides online savings and checking accounts, aiming to become a comprehensive financial service provider.
• 🧡 The platform offers a range of account types, including taxable accounts and various retirement accounts, but does not offer custodial accounts or 529s.
• 😫 Betterment's goal is to provide a simplified, set-it-and-forget-it approach to long-term investing in stocks and bonds.

Questions & Answers

Q: How does Betterment determine asset allocation?

Betterment uses a questionnaire to assess an individual's risk tolerance and goals, and based on the answers, determines the percentage of their money that goes into various index funds.

Q: Can I talk to a financial advisor with Betterment?

Yes, Betterment offers unlimited access to a team of CFP professionals through its Betterment Premium plan. They can provide investment advice for accounts both within and outside of Betterment.

Q: What is tax-loss harvesting and how does it benefit investors?

Tax-loss harvesting is a feature unique to robo-advisors like Betterment, where investments are sold at a loss and repurchased to generate tax benefits. Betterment's tax-loss harvesting has been found to boost returns by 0.77% annually.

Q: Does Betterment offer other financial services besides investing?

Yes, Betterment also provides an online savings account called Betterment Cash Reserve, with a competitive APY, and an online checking account with full reimbursement of ATM and foreign transaction fees.

Summary & Key Takeaways

• Betterment is a robo-advisor that uses algorithms to manage investment portfolios based on individual goals and risk tolerance.

• The platform eliminates the need for high minimum investments and reduces fees compared to traditional financial advisors.

• Betterment offers two plans: Betterment Digital with a minimum investment of $0 and a 0.25% fee, and Betterment Premium, with access to human advisors and a minimum investment of $100,000 and a 0.4% fee.