Pros and Cons of Betterment vs. SoFI Invest

Comparing the pros and cons of Betterment and SoFi Invest reveals two popular options with distinct approaches to helping you build your financial future. Betterment has established itself as a robo-advisor pioneer, offering automated portfolio management with a focus on long-term wealth building through diversified ETF investments. Meanwhile, SoFi Invest has emerged as a versatile platform that combines automated investing with active trading options and additional banking services under one digital roof. Whether you prioritize Betterment’s sophisticated tax optimization tools or SoFi’s commission-free trading and member perks will depend on your personal investment goals and preferences.

An alternative to both might be for you to hire a financial advisor to manage your investments for you.

Betterment vs. SoFi Invest

When comparing Betterment vs. SoFi Invest, investors face a choice between two popular robo-advisor platforms with distinct approaches to automated investing. Betterment stands as one of the original robo-advisors, having pioneered the space since 2008 with a focus on sophisticated portfolio management and tax optimization. SoFi Invest emerged later as part of a broader financial ecosystem, offering automated investing alongside banking, lending, and other financial services.

Betterment only offers an automated investing option, making it a good platform for those who prefer to be hands-off with their investments. With SoFi, you can choose automated investing or active investing, so it may be a smart choice for those who prefer flexibility.

Both platforms offer crypto investing and retirement accounts in addition to taxable brokerage accounts. You can also invest in a traditional, Roth or SEP IRA through Betterment and a Roth or traditional IRA with SoFi. Betterment offers employers 401(k) options, but SoFi does not.

Betterment vs. SoFi Invest: Fees

Those interested in Betterment’s robo-advisor solution can choose from its Digital or Premium accounts. The Digital account has a management fee of up to 0.25% and no minimum investment requirement, while the Premium account has a 0.65% management fee and a $100,000 minimum investment requirement. You’ll also pay expense ratios for ETF investments in addition to management fees.

SoFi charges a 0.25% management fee annually. You can open a SoFi Invest account and start investing money with as little as $50. If you opt to invest in ETFs through SoFi, you’ll also pay expense ratios. While neither platform offers a specific expense ratio range, these costs are typically relatively low.

Betterment vs. SoFi Invest: Services and Features

With a Betterment Digital account, you’ll benefit from automated investing and rebalancing, as well as access to customer support via phone and virtual chat. Those who upgrade to Betterment Premium will get all the perks of its basic account, plus unlimited calls with a certified financial planner for investment advice. Both account types also offer automated tax-loss harvesting, which is a convenient feature that can help you save time and reduce your tax burden.

When you sign up for Betterment, you’ll answer some questions about your investment style and risk tolerance. The platform’s automated technology will tailor your investments based on your preferences and goals. Betterment offers several ETF portfolios focused on different themes, including diversified, low-cost funds, high-growth companies, companies highly ranked for ESG and more.

SoFi automated investing offers similar services and features to Betterment. You can benefit from automated investing and rebalancing and complimentary access to SoFi’s financial advisors when you need it. Portfolios consist of low-cost ETFs, which contain a mix of stocks, bonds and other asset classes.

While SoFi offers lower fees and similar features to Betterment, it does not offer automated tax-loss harvesting. This feature can be a huge time-saver during tax season, but it’s still possible to manually reduce your tax burden by offsetting any investment gains with losses you’ve incurred that year.

Mobile and Online Experience

While the Betterment app lets you link outside accounts to track your balances, it’s primarily focused on tracking your investments. SoFi’s app offers a more full-featured solution, which makes sense given SoFi’s wider array of products. SoFi users can view their deposit account and loan balances as well as their investment accounts.

Both the Betterment and SoFi apps are well-rated, with comparable ratings on the App Store. Users rate Betterment 4.8 stars out of 5 across more than 55,000 ratings, while SoFi has 4.8 stars across more than 376,000 ratings. Betterment fares slightly better than SoFi on Google Play, though, receiving 4.7 stars compared to 4.4 stars.

Who Should Use Betterment and SoFi Invest?

Before choosing between Betterment and SoFi Invest, take time to clarify your financial objectives. Are you saving for retirement, building an emergency fund, or working toward a major purchase? Your goals will influence which platform might serve you better, as each offers different features that align with specific investment strategies.

Betterment and SoFi Invest could both be good options for those seeking a low-cost, hands-off investment option. If you don’t have much to invest, you could benefit from a Betterment Digital or a SoFi investment account. However, those seeking no management fees might be better off with SoFi. Those who prefer the convenience of automated tax-loss harvesting might prefer Betterment.

Betterment appeals to those who prefer automated investing with minimal involvement. If you value professional portfolio management and are willing to pay slightly higher fees for comprehensive services, Betterment’s robo-advisor approach might be right for you. Their tax-loss harvesting and goal-based investing features particularly benefit higher-net-worth individuals looking to optimize their investment returns.

SoFi Invest works well for beginners and cost-conscious investors who want flexibility. With no management fees for automated investing and commission-free trading, it’s attractive for those just starting their investment journey. If you’re interested in both passive investing and occasionally selecting individual stocks or cryptocurrency, SoFi’s hybrid platform offers this versatility under one account.

Bottom Line

If you’re comparing Betterment vs. SoFi, you’ll probably notice that both platforms work similarly. You can access automated investment tools, with each and both give you access to low-cost ETFs. You’ll pay management fees with a Betterment account, though, so that’s important to be aware of. Overall, fees and features are comparable and both accounts may be a good choice for newer investors seeking convenience and simplicity.

Tips for Investing

Whenever you’re looking for new investment opportunities, it’s important to make sure all your decisions reflect your financial plan and overall goals. The best way to do that might be to work with a financial advisor, who can even manage your portfolio for you. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Whenever you’re looking to invest on your own, it can be helpful to know how your money could grow with each investment. SmartAsset’s free investment calculator can help you estimate that exact thing.