It's returned around 10% in the last two years and two weeks including reinvested income (M* total return chart). They do have some differences, however, and one of the ways they differ is in what they choose to emphasize for their clients.Betterment is a goals-based robo-advisor. Many consider this the robo advisor that started it all. We use it to budget for stuff: retirement, college for the kids, vacations, emergency savings, new vehicle, etc. But it's far from being just a cold algorithm. My Roth IRA is just a random compilation of stocks, mostly large-cap US-based and tech-leaning stocks and also SPY for balance. 7% looks lower than the Vanguard portfolio, but maybe taxes took off some return (tax loss harvesting sounds great but could just be a gimmick). Wealthfront Review Wealthfront also came onto the scene in 2008, but its current iteration didn’t exist until about 2011, giving Betterment a three-year head start in the robo-advising space. I've read you can restrict your portfolio to US equities and bonds. After the first month, I decided to transfer my relatively small IRA's (Roth and Traditional) over. Or maybe you're not average. Like most of the leading robo-advisors, Betterment offers investors automated tax-loss harvesting, rebalancing, and tax-efficient techniques. There is little information that I can find. Betterment is the best platform for the average investor. A lot of people are saying that Betterment/Wealthfront is easy to use, but I don't see much benefit of using them over just investing in a few different Vanguard indexes. If, on the other hand, you already know exactly which etfs you'd place your money in and what your ideal distribution is, I'd just create an account with Fidelity/Vanguard (what I'm familiar with) and buy the etfs directly to save the managing fee. IMO, anyone in this sub has probably already advanced past the stage of needing/using Betterment. How Betterment calculates "better returns". Join our community, read the PF Wiki, and get on top of your finances! I'd actually like to hear any comments or criticisms on this plan. https://www.betterment.com/tax-loss-harvesting/. What exactly is this post about? Your own picks did great this time, but tech did great in the late 90s too before it all fell apart. Other than that, I think Betterment and WealthFront are virtually the same. For taxable accounts Betterment can provide Tax loss harvesting which Vanguard doesn’t offer. Thanks for the tip on VTTSX too. My work has a 401k set up with them, and I've been using it for about a year: Interface is really pretty, and they make managing your money quite simple. I had an account with them before I knew anything about investing. 3. If we wanted a certain amount of money for vacation, it will suggest how much to contribute per month to reach the goal. Betterment claims that investing in a Betterment portfolio since 2004 would have produced a cumulative return of 190.6% (which is an average annual return of 7.3%).This beats out the average private client investor's portfolio, which had a cumulative return of 109.2% over the same time period.. You can play around with Betterment's historical performance chart and see the returns for … I was skeptical too, so I have just been putting in 50-100/mo over there for a little while. As of October 2020, it isn’t an accredited business with the Better Business Bureau (BBB) but receives an A rating despite its 39 BBB complaints. That may not seem like a lot, but over time it translates to an extra $44,692 in portfolio gains in a taxable account. I don't know your start and end dates for the Betterment investment so I can't compare the performance of the two directly. Here’s Mr. Money Mustache’s review of Betterment, which is what originally sold me: http://www.mrmoneymustache.com/2017/02/01/betterment-cranks-up-features-and-costs-is-it-still-worthwhile/. Nerdwallet does great reviews of similar services. I'm a little skeptical about their claims with TLH, but I plan to test out that feature this year with ~$100 of fun money. If anyone can tell me how to do that, I'd be happy to share. When I compared the two, Betterment did not offer tax loss harvesting, but that may have changed. I know 2 years is very short-term in the scheme of things. As one of the top players in the industry, Betterment sets the standard for service. 12 Best Robo-Advisors of December 2020 Andrea Coombes , Alana Benson December 22, 2020 Many or all of the products featured here are from our partners who compensate us. And I know that Betterment diversifies internationally and the rest of the world has not recovered as quickly as the US. It's nice to use if you're hands-off about investments. Betterment vs Wealthfront vs Acorns: Best Robo-Advisor? I should be getting around a $1k refund from overpaying something and I think I am going to throw that in there and see how it does for another 6 months. I am getting a 5.43% return overall from the last 6 months, but I have it heavily stock based, 90/10 I think. Original review: Dec. 2, 2020. For instance, it suggested I make a low-risk savings account in betterment and move some money over because I have "too much" in my checking account. --Keep in mind that Betterment is more or less still a startup, which means it may not yet have a long-term viable business model. The potential for it to drastically raise fees (or worse) is greater than for more established brokerages. The short answer is Betterment is the only choice if you have less than $500 since Wealthfront requires a $500 minimum deposit that Betterment does not. Betterment is for passive, hands off investors who need some level of guidance Fidelity Go is completely free for balances under $10,000 After that, it is $3 per month for balances up to $49,999 and then 0.35% annually for accounts above $50,000 As of April 2019, Betterment has over $16 billion dollars under management and is one of the largest independent robo advisor on the market.. To help investors make the most of their money, Betterment’s investment methodology is ETF focused. Customers gain access to a number of special features including tax-optimized portfolios, goal-based investing, and their retirement planning suite, which provides investment guidance before and after retirement - or whenever you hit FI. (They do respond to emails though.). They have decent recommendations for allocations in different funds depending on your risk profile. https://www.reddit.com/r/investing/comments/5dwsi3/two_years_with_betterment/ I just wanted to add another sample data point. Two completely different investing approaches and risk appetites resulted in two completely different results. I've noticed international funds have done better than US funds over the past couple months. Betterment's average fees on their ETFs are 0.10% or 10 basis points for my asset allocation (90% stocks, 10% bonds) plus the 0.25% management fee (for accounts $10,000-$99,999). One thing I like about WealthFront is that they do tax loss harvesting. Overview: Top robo-advisers in December 2020 Betterment – Best for service. Press J to jump to the feed. my accountant was sick of having to itemize the hundreds of trades Betterment tends to generate over the year. I tried Betterment for two years also and my 90/10 taxable account had similar returns. Betterment has a history of providing investors with higher-than-average returns and competitive fees.. From early financial planning to retirement and everything in between, Betterment provides high-quality financial services and consultation to those looking for easy money management. New comments cannot be posted and votes cannot be cast, Press J to jump to the feed. These three robo-advisors are all low-fee, relatively low-minimum investment robos. I did not deposit another penny into either Betterment or my Roth IRA for 2 years (and 18 days). I don't know if Betterment and Scottrade produces that for you automatically. Where's your risk adjusted return data? Betterment's 100% stock allocation would be at 6.2% for the same period. Write to Kyle Schurman at feedback@creditdonkey.com. It has a Trustpilot page but its 3.2 out of 5 TrustScore is the result of just two customer reviews — one positive, one negative. Find new Betterment promotions, bonuses, and offers for trading stocks, ETFs, bonds, options and mutual funds here.. Betterment is one of the most popular platforms for automated investment, along side Wealthfront.These two platforms are also known as Robo-Advisors in the investment community. After reading "A Random Walk Down Wall Street", I was confident in this approach. Actually that's enough, you're comparing 2 very similar products, I am not saying that, Betterment does when they say they compete with the average self-service investor. I did not know/do that but if you did, I'd love to hear how your portfolio is doing. Unless otherwise specified, all return figures shown above are for illustrative purposes only, and are not actual customer or model returns. A unique Betterment feature is the opportunity for all clients to text questions to and receive answers from a human financial advisor. I also know that the US market has been very bullish so a chimp could probably have done just as well. Betterment is a New York based robo advisor that was founded in 2008. Then betterment suggests how risky to make the portfolio and auto adjusts it as time goes by. I especially liked the charts that project how much you will have in a given timeline. Betterment Review 2020. Edit I can't do math. I’ve used Betterment for almost two years now and have nothing but good things to say. We make money from merchants when you use your Visa debit card. The biggest win for me though is the UI; both online and on the app Betterment is ridiculously easy to use. If you're looking to invest your money, but don't know the first thing about investments, try a robo-advisor. Has anyone used any or all of these investment platforms? Annualized time weighted return is 6.1% vs 11% for SPY the same period. But at least in my portfolio (90% stocks 10% bonds), it has hardly ever beaten the S&P 500 either up or down cycles. wtf? I have been very happy. A $23,993.25 gain (+37.9%). Betterment. Press question mark to learn the rest of the keyboard shortcuts, https://www.reddit.com/r/investing/comments/5dwsi3/two_years_with_betterment/. I might roll my 401k there if all is well. Betterment has risen to the forefront as one of the biggest Robo-investing platforms in the industry. Could you share your thoughts and experience with them? I would do the retirement accounts with less risk obviously. --If you own other funds elsewhere, you may have to be careful to not trigger wash sales because you can't choose what Betterment is investing in and when. It wasn't necessary to enter every transaction manually. Then you can't really compare it to a pure indexing approach, which could be much more diversified and lower risk than your stock-picks. Qualify for 1 Year Managed Free with Betterment’s newest promotions. Their mission is to make investing simple, easy, and accessible to everyone. I deposited exactly $63,296.25 into Betterment with a 90/10 (stock/bond) allocation. About Betterment. This means that I don't have any idle cash sitting around after having transferred it, it's immediately put to use. Simply Put: Betterment is a low-cost automated investing service. I thought betterment took care of all this for you, that was the whole point of using them? That's the good. It was lower when I first started with Betterment. I am astounded that they can get away with with burying negative returns. For a more detailed breakdown of Betterment's returns, check out our guide. I use H&R Block tax software and it imported everything electronically from Betterment. No complaints. Betterment Review. I have an IRA and taxable individual account with them. (I do not know exactly how much I paid in taxes over the two years, though Betterment has tax harvesting strategy to minimize taxes). They have done pretty good with TLH for me. For Investing and retirement accounts, Betterment LLC charges one low, … I will miss the projection charts, but they are not worth the %0.5/year Betterment charges IMO. I switched to Betterment in 2014. VTTSX is Vanguard's Target Retirement 2060, 90/10 global stock and bond indexing, similar to the Betterment portfolio I guess. Overall, Betterment receives a lukewarm reception from investors. Is true. My current take is that Betterment/Weathfront are OK, but M1Finance is cheaper if you want a little more DIY but still automate as much of possible. I originally signed up to test the waters last November. I think the benefits are it's an easy interface and the returns follow the market. Cash Reserve offering includes spending analysis and guidance as … Betterment does TLH on taxable accounts, if you so choose. Betterment claims that tax-loss harvesting can generate surplus returns of as much as 0.77% annually. It's a nice way to reduce my taxes, which I was very appreciative of this year. Actually that's enough, you're comparing 2 very similar products. Betterment provides a historical performance tool that offers somewhat limited investment return data. The feature I love the most is being able to have smaller auto-deposits that immediately purchase fractional shares of their underlying ETFs. What are your returns tracked against a benchmark like the SP500? 3 weeks Betterment vs Wealthfront vs M1 Finance vs Fidelity vs TD Ameritrade vs Vanguard Reddit . It does dividend reinvestment and some tax optimization as well. FINAL WINNER: Betterment. Like others have mentioned, the international equities component of the Betterment portfolio dragged down the returns compared to S&P500, etc. I've noticed international funds have done better than US funds over the past couple months. My current plan is to move Betterment IRA to a M1Finance IRA with 90% VTI and 10% BND that I adjust as I approach retirement (in 15 years or so at current rates). --They charge a fee on top of the fund fees. Emerging markets aren't doing great, hence the underperformance. I closed my Betterment accounts and moved them back to my brokerage. You're absolutely right about the lower fees. At that time, my Betterment balance stood at $67,774.03. Betterment prides itself on its ability to give retirement advice as a fiduciary, as well as its sterling customer service record. Gotta be patient. I understand you can't really compare them long-term, but a lot of FIRE/Personalfinance people say "just put everything in index funds". Betterment research suggests that this strategy can boost after-tax returns by an average of 0.48% each year, which amounts to approximately 15% over 30 years. How Wealthfront, Betterment and others manage your money. What is a robo-advisor? Over 30 years, that extra % each year could earn you 38.8% more after-tax money in retirement compared to investing on your own. As others suggested, the UI is really nice. They’ve focused on providing a smarter, well-rounded platform. Betterment is a popular robo-advisor, a class of financial advisors which uses minimal human interaction and computer algorithms to invest your money and balance your portfolio. A $4,477.78 gain (+7.1%). You're lagging the S&P because Betterment has a relatively large non-US stock allocation. Charles Schwab Intelligent Portfolios Performance Review 2020: Fees, Returns, Robo Investing Services & Competitors Business Insider Intelligence 2020-01-14T15:51:00Z The screenshot below shows an interactive graph enabling you to calculate returns over various time frames, going all the way back to 2004 (which is a tad meaningless, given the platform was only launched in 2008). I have ~107k in an IRA in Betterment, but am considering a move to M1Finance.com this year. Just wondering if anyone else has had better luck with Betterment. I assume you have to calculate your beta across all your stocks over the time of holding. Maybe I'm giving the people who frequent here too much credit though ;). The UI is nice, but nicer IMO before the latest redesign, which reminds me more of a CRM than a brokerage. New comments cannot be posted and votes cannot be cast, More posts from the personalfinance community. It puts all your retirement accounts into one group to show how much in retirement money you have altogether. In addition, it's definitely the superior choice for accounts over $2,000,000 since their fee drops to 0% at that value. Used them for a couple of years (not by choice), not really a fan: --I didn't like their large allocation of international funds. I don't want to have to research funds and make those type of decisions all the time. For Checking, Betterment Financial LLC does not charge fees on your account. Betterment vs. Wealthfront: Which Is the Best Robo-Advisor in 2020? I decided to stop using Betterment and instead of having a tax implication by selling, I initiated a transfer of my betterment balance to my Vanguard account, in kind. I wanted to compare how I'd do against Betterment. I searched this subreddit and found another user who had a similar experience. My Betterment portfolio did rather poorly. I'm happy with Betterment, and happy to let them do the legwork for me. --Their portfolio is unnecessarily complicated IMO; I really would've preferred just a simple 3-fund portfolio. Research has shown that even after factoring in Betterment's fee, switching to Betterment will increase returns by up to 1.48% for the average investor. That being said, their fees aren't exorbitant and they do have a lot of nice features, so I'd say it's fine. 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