Betterment Review 

About Betterment

Possessing more than $30 billion in assets, boasting over 730k customers, and inspiring more than 34k Instagram followers, Betterment is one of the most attractive financial advisory companies today.

Why are they so popular? In short, the brand’s portfolios simplify the convoluted investment process while their checking accounts offer low maintenance fees. At the root of it, they want you to keep your money and help you watch it grow.

But how do they do that? In my Betterment review, I will give you all the information necessary to decide whether you want to invest with them. Through it, you’ll learn about the company’s services, charges, what customers say about them, and more.

Betterment was founded in 2010 in New York City as a way to make money easy. Jon Stein and Eli Broverman’s original vision was so inviting that they garnered more than 400 customers in their first 24 hours.

Their services are designed to reduce the mental fatigue and confusion of investing without charging you through the nose for their services. You can save more money by investing with them thanks to their financial advisory services, premade portfolios, and low fees.

The three main strategies Betterment uses to aid users with better money management are:

1. Cash Management
2. Guided Investing
3. Retirement Planning

I’ll review all of these and more below, so keep reading. Let’s get into it.

Betterment App Review

Apps can notoriously be hit or miss depending on how well they’re designed. Thankfully, it seems that Betterment’s app runs smoothly based on what users have written.

As one user wrote: “Betterment makes it easy to save for retirement or any other goal. The individual goals you can create are really nice to see how much you have saved towards each one instead of just having one large pot of money. The iOS app is super simple to use and makes depositing money or seeing performance easy.”

The Betterment app modernizes investment by putting all the functions in the palm of your hand and trimming the fat, making for a seamless experience. With it, you can check your balances and accounts at any moment. You can also see your transactions and deposits to know if everything is still in check.

On top of that, you can use those deposits and transactions straight from the app. Betterment doesn’t confine you to desktop usage, allowing you to work with your investments on your mobile device.

The app is particularly helpful for goal-oriented people because they can track their performance towards their end goal on both long-term and short-term time periods. If you need to change your goals or add new ones then the Betterment App allows you to do just that.

Betterment 401k Review

So how does Betterment help you keep more money in your wallet to help you in the later stages of life? Their features are built to accumulate your money passively. 

To do so, Betterment offers four different types of individual retirement accounts:

1. Traditional
2. Roth
3. SEP
4. Roth Conversion

Every IRA Betterment provides has different tax rates and advantages. The traditional IRA is the simplest of them all, and it’s tax-deductible, so you can use it to supplement your retirement fund.

The Roth IRA account is for the libertarians reading this Betterment review. It’s a tax-free earnings retirement setup that you can withdraw from at any time.

If you’re really independent and ambitious then the SEP is best for you. It’s a retirement account with tax rates geared towards self-employed and/or freelance workers, which is a rarity. 

The final IRA account they offer is the Roth conversion, which basically allows you to transfer funds between a traditional account and a Roth account from their app. It’s not so much a dedicated account as much as it is an attractive feature of their app.

Betterment Investing Review

Betterment’s main focus is on investing because that’s the best way to passively expand your income. They provide premade portfolios for newer investors, and I’ll go through those in a second. The thing is, some people want access to Betterment’s features while maintaining control over their portfolio.

That’s not an issue because Betterment offers a flexible portfolio. With this portfolio, you can weigh assets based on your preferences. You can invest more in certain areas while staying away from others.

With that being said, here’s the full list of portfolios Betterment offers on their website:

• Core: a stock-and-bonds-focused portfolio that’s better for long-term investing.
• Innovative Technology: a diverse portfolio with a specific interest in companies that will likely expand in the near future. Bonds are in industries like renewable energy, VR, and blockchain.
• Broad Impact: focuses on socially and environmentally conscious companies with a noted interest in long-term growth.
• Climate Impact: invests in companies with low greenhouse emissions, small carbon footprints, and high interest in green projects.
• Social Impact: invests in companies with noted interests in addressing inequality, minority empowerment, and diversifying employment.
• Goldman Sachs Smart Beta: invests in companies with huge growth potential. It’s low-cost but does come with risk as you’re investing in companies relying on potential.
• BlackRock Target Income: a fully-bond portfolio to keep you safe from the ever-changing stock market.
• Cash Reserve: a cash-only account with a variety of benefits and a 3.20% APY.
• Universe: a crypto-focused portfolio that’s diverse in the market (i.e. invests in decentralized finance and the metaverse among other related industries).
• Sustainable: another crypto-focused portfolio with an interest in assets that are geared towards consuming less energy or building a greener future.
• Metaverse: a deeper dive into the crypto world with a specified portfolio.
• Decentralized Finance: crypto assets that provide banking services like loans and mortgages without centralized financial institutions.

One last thing I want to include in this section of my Betterment review, you don’t have to stick to one portfolio strategy. Betterment allows you to have multiple in your account with different goals, meaning you can build towards retirement with a social impact portfolio while earning more money now with a metaverse portfolio, for example.

How Betterment Works

In this section of my Betterment review, I’ll show you how you can sign up for their services. The first few steps are pretty easy. You’ll enter basic information like your name, email address, and phone number. Note that you must have a US phone number as Betterment does not operate outside of the United States.

After that, you’ll provide Betterment with information pertaining to your annual income. From there, you’ll work with the company to set a solid retirement income goal. This goal will be based on how much you should look to invest each year. Betterment will also tell you how much of the stock/bond split you should maintain to help reach that goal.

You can then select which account type you’d like to make. The options provided are:

• Regular account (taxable)
• Traditional IRA
• Roth IRA
• SEP IRA

After you select your account, you’ll arrive at a list of the features that Betterment offers to help you manage your finances. I’ll detail those features in the next section. 

The only thing left to do is answer more questions and set up some security protocols, then you’re set! Betterment’s system is optimized for speed and user experience.

How Betterment Manages Your Money

After following the steps I just outlined, you’ll be prepared for Betterment to take care of your funds. However, you may still be wondering how they manage your money.

The company uses low-cost exchange-traded funds and a risk strategy that adapts to the market. Both of these are governed by Betterment’s robo-advisors, which are algorithms with humans at the helm. This is the case for long-term investments as algorithms are better at predicting future trends than they are accommodating to daily changes.

For daily tasks like spending money and depositing funds, Betterment uses Checking and Cash Reserves. The first is a checking account that accrues no fees (including overdraft and ATM), has cashback rewards at Costco and Adidas, and is insured up to $250K.

I spoke about the cash reserve a bit earlier, but it’s basically a high-yield account that’s up to 15 times higher than the national average.

Other Betterment Features

Now that you’ve learned about all the major features that Betterment offers, let’s look at some of the smaller benefits they provide. These are, for the most part, practical advice for investments. You can book an appointment with one of their financial advisors to talk about college planning, retirement, or crypto investing.

Betterment also offers tax-loss harvesting, which is a fancy way of saying that they automatically lessen the taxes your portfolio accrues. They do so by ditching bonds or stocks that have lost value and replacing them with investments that are similar in nature albeit smaller in size.

This feature is regulated by their robo-advisor which allows Betterment to more quickly adapt to potentially increase taxes on your accounts more.

Betterment Fees and Costs

Regardless of which type of account you open with Betterment, be it Cash, Investing, or Crypto, you’ll have to sign up for either Betterment Digital or Betterment Premium service. This service fee basically covers how much freedom you get with Betterment.

Betterment Digital charges a 0.25% advisory fee and is open to all customers. It doesn’t matter how much is in your account. The same cannot be said for the Betterment Premium, as your balances must equal at least $100k. The advisory fee is higher, sitting at 0.40%, but you get unlimited access to their financial advisors.

While Betterment Premium members can speak with their financial advisors for free, non-premium users will have to pay to schedule a meeting. It costs $299 to book a 45-minute session while an hour-long session costs $399.

If you want to open a basic Betterment Cash account then all you need to do is sign up. It’s free to join and requires a $0 minimum balance. The Betterment Investing program has a 0.25% annual fee and a $0 minimum balance while the Betterment Crypto account has a 1% annual fee but also charges trading expenses.

Who Is Betterment For? 

Although Betterment has tools for new and experienced investors, I think they’re better for those newer to investing. Investors who want more freedom may not like Betterment’s confines while beginners will likely appreciate the automated service and helpful advice.

Betterment Reviews: What Do Customers Think?

To give you an idea of what customers think of the brand, I’ve put together a list of Betterment review scores from multiple websites. They present a generally positive consensus of the company and its services. Let’s take a look:

• App Store: 4.7/5 stars, 38k reviews
• Google Play Store: 4.5/5 stars, 10k reviews
• Consumer Affairs: 3.7/5 stars, 420 reviews
• Trustpilot: 2.4/5 stars, 9 reviews
  

Many positive Betterment reviews came from users have been with the company for years. They kept using the brand for their low overall fees and the efficiency of the auto-investor. Here’s how one long-time investor described their Betterment experience: 

“I’ve been using Betterment for over 4 years for all my investing. I chose Betterment because of its ease of use, its automated guidance, and its low fees. I don’t know a ton about picking investments myself, and honestly, I don’t want to spend my time researching or worrying about my investments. Betterment takes care of all of that for me! I just set up automatic deposits on the date of each paycheck, forget about it for a while, and watch my money grow over time.”

Other users said that Betterment was much easier to use than other investing websites. That ease of access is what attracted them in the first place and kept them working with Betterment. As one ConsumerAffiars user wrote:

“I’ve used a few different investment firms, some of the usual suspects that have been decent such as Fidelity but Betterment is by far & away the best place for my money. I only wish Betterment was around 15 years ago. The growth I’ve experienced with my portfolio has been tremendous! The site is user-friendly and the staff is extremely helpful and accessible.” 

People who were interested in cryptocurrency were particularly fond of Betterment for their rates and portfolio. One user said:

“Betterment has been an outstanding FinTech solution for me, an excellent place to set up my Roth IRA and other accounts, including Individual Investing, Checking, and more. The fees are reasonable, the website clear and the iOS app also very useful (including face recognition).”

They went on: “I couldn’t be more pleased with the ETF choices made by Betterment; ESG is prioritized, for those who care about putting their money into responsible places.”

One interesting complaint I read in some Betterment reviews was that the company’s customer service left them in a sort of purgatory. NBKC actually holds your checking account via Betterment. Some couldn’t contact NBKC directly since they weren’t direct customers. However, Betterment wasn’t able to answer their questions about their account because they didn’t hold it.

This wasn’t always the case. Based on what I read, the brand was more than willing to help customers work through issues with their checking accounts. However, it’s worth noting that there were some issues that Betterment just couldn’t help because they didn’t own the account.

Is Betterment Legit?

While Betterment seems to be legit, some problems came with the robo-advisors. These problems included customers being locked out of their accounts for “fraudulent activities” that they never committed or being blocked from withdrawing their funds.

I’m able to report that this wasn’t the case with the majority of customers, but it did come up in some reviews.

Is Betterment Worth It?

Betterment is a great investment option for people who want to start investing but don’t know where to begin. Their diverse portfolios are a great guiding tool for people who have an idea of where they want to put their money but don’t know for sure.

Betterment Promotions & Discounts 

There weren’t any promotions or discounts running at the time of writing my Betterment review.

How To Get Started On Betterment

You can create a Betterment account on their website, www.betterment.com, or by downloading the app from the Google Play Store or App Store.

FAQ

Who owns Betterment?

Sarah Levy is the brand’s CEO. 

What is Betterment’s Privacy Policy?

Betterment will not share your information with non-affiliates who wish to advertise to you. If you’re interested in reading more about how they use your information then you can find the complete privacy policy on their website.

What is Betterment’s Refund Policy?

You can withdraw money from your Betterment account at any time without any extra fees. There aren’t any fees associated with closing an account either.

How to Contact Betterment

I’ll wrap up my Betterment review by telling you how you can contact the brand with any questions. You can speak with them directly through the chat function on their website. 

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