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Betterment Review: A Comprehensive Look at the Robo-Advisor and Its Alternatives

In the world of investing, robo-advisors have taken center stage in providing an accessible, cost-effective, and user-friendly approach to managing investments. One of the pioneers in this field is Betterment. In this comprehensive review, we'll explore the ins and outs of Betterment, its features, and how it compares to its competitors.

What is Betterment?

Founded in 2008 by Eli Broverman and Jon Stein, Betterment is a leading robo-advisor platform that aims to simplify the investing process for individual investors. Sarah Levy, the current CEO of Betterment, leads the company as it continues to innovate and provide personalized financial advice to its users.

How does Betterment Work?

Betterment operates by automating the investment process and creating and managing a diversified portfolio tailored to your financial goals and risk tolerance. The platform primarily invests in low-cost Betterment index funds to ensure cost efficiency and long-term growth.

Betterment Competitors

There are several other robo-advisors and investing platforms in the market. Here's a brief rundown of some of the main competitors:

  • SoFi: A financial services company offering a variety of products, including loans, insurance, and a robo-advisor platform called SoFi Invest.

  • Wealthfront: A popular robo-advisor that uses software algorithms to create and manage diversified investment portfolios.

  • Robinhood: A commission-free trading platform that offers stock, ETF, and cryptocurrency trading, with limited robo-advisor functionality.

Betterment vs Wealthfront vs Sigfig

Betterment, Wealthfront, and SigFig are all reputable robo-advisors offering a range of features to cater to different investor needs. Betterment stands out for its goal-based investing approach, allowing users to create customized financial plans based on their objectives. It also offers tax-loss harvesting and automatic rebalancing to maintain optimal portfolios.

Wealthfront, on the other hand, provides a more comprehensive suite of investment options, including direct indexing for larger account sizes, which can lead to greater tax efficiency. Additionally, Wealthfront offers free financial planning tools and a unique Portfolio Line of Credit feature for investors with account balances over $100,000.

SigFig, a smaller player in the robo-advisor market, provides a unique combination of technology-driven investment management and access to human financial advisors. This hybrid approach aims to offer the best of both worlds for investors looking for a blend of automation and personalized advice. While all three platforms share some similarities, their distinct features cater to different investor preferences, making it essential for individuals to carefully assess their needs and goals before choosing the right robo-advisor for their portfolio.

Pros and Cons


  • Easy-to-use platform with a user-friendly interface

  • Goal-based investing with personalized advice

  • Tax-efficient investing through tax-loss harvesting

  • Automatic rebalancing of portfolios

  • No account minimums


  • No direct indexing options for advanced investors

  • Limited investment options compared to some competitors

  • No fractional share investing for individual stocks


Betterment offers a variety of features designed to optimize your investing experience:

  • Goal-based investing: Betterment helps you create specific investment goals, such as retirement, an emergency fund, or a down payment on a house, and designs a customized portfolio to achieve those goals.

  • Automatic rebalancing: The platform periodically rebalances your portfolio, ensuring it remains aligned with your goals and risk tolerance.

  • Tax-loss harvesting: Betterment uses tax-loss harvesting to minimize your tax liability, selling underperforming investments to offset taxes on gains.

  • Customer service: Betterment's customer service team is available via phone, email, and live chat, providing support for any questions or concerns.

  • Betterment Savings Account: The Betterment savings account offers a competitive interest rate, with no fees and FDIC insurance up to $1 million.


Overall, Betterment is a solid choice for individuals seeking a user-friendly, goal-based robo-advisor with a strong focus on tax efficiency and portfolio management. While it may not be the best fit for advanced investors seeking more customization or direct indexing options, it's an excellent platform for those who want a hands-off approach to investing.

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