Betterment in a Nutshell


For many first time investors, a smartphone application may be all you need to get started on you’re your path to financial security. Betterment is one of the most successful of the financial applications known as a "robo-advisor" and allows almost anyone a path to start investing in a portfolio of stocks and bonds chosen to match their objectives and tolerances for risk.

With no account minimum and affordable fees, a Betterment account can be set up to accomplish your investment goals.

Betterment’s intuitive website shows you how much you need to contribute for retirement, and you can see how your account will grow over the years in all kinds of market environments. Couple the automation with investment allocations and the ability to set-up a plan for automated deposits, you don’t have to do more than watching your money grow.

Reinvestment of dividends, tax-loss harvesting, and automated rebalancing of your account between investment choices will make your money grow.

Solid Growth

Betterment launched in 2010 and quickly scored $3 million in funding and has enjoyed steady growth ever since. Today, Betterment has more than 150,000 users, and manages more than $4 Billion. While that’s a drop in the bucket of 2.237 Trillion dollar managed fund business, Betterment remains one of the fasting growing of the Robo-Advisors. Growth has been solid as they continue to expand product offerings.

Independent investment managers usually charge more than 1% annually, and often fail to beat average (unmanaged) market returns. Betterment has “beaten the market” 88% of the time since its inception, using a portfolio of US and international stocks compiled by their panel of experts. The Betterment platform performance couldn’t be better. Whether you’re using the platform on your desktop, your cell phone/smartphone, mobile device, or any other piece of tech you can fathom, Betterment runs like butter.

Users can also create a variety of account types, including taxable and non-taxable accounts.

Betterment takes your money and puts it into low cost ETFs (thousands of stocks sold as a single unit, like individual shares) and stable US bonds. These funds grow steadily most of the time, along with the American and international markets these company stocks compose.

Easy to Use

You can technically get the same products from Vanguard for less money than Betterment, but only if you are willing to do a lot more work on your own. In most cases, the cost difference is very slight.

How Much Does Betterment Cost?

The big plus for investors that know fees, can act to reduce your total returns is Betterment is now really cheap. Fees are only 0.15%-0.35% depending on your balance. Betterment also has no minimum balance, unlike competitors.

Betterment would charge about $17.50 in yearly fees for an account with $5,000. As independent advisor/manager commonly charges 1-2% ($50-$100).

What Does the Betterment Portfolio Look Like

Betterment gives the user a strong selection of stocks and bonds index funds that are exchange traded funds. This low-cost passive approach is mostly the leading funds from Vanguard, but a range of iShare funds are also included. , chosen for great historical performance and affordability. The user selects their own stock/bond allocation.

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