What alternatives do I have to Betterment for investing?
For more than a decade, Betterment has done just that, attracting thousands upon thousands of customers in the process. Today, it’s more than just a robo-advisor, with day-to-day money management features like a high-yield cash management account and a free checking account.
It’s no wonder Betterment is a fixture on our list of the best robo-advisors around.
That list grows by the year, though. Betterment is no longer the only game in town for frugal investors seeking passive asset management that boosts returns by trimming fees rather than picking stocks or trying to time the market. It has plenty of company — and plenty of worthy alternatives.
Best Betterment Alternatives for U.S. Investors
And who are those alternatives? Like Betterment, many have a home on our list of the top robo-advisors around. Some make our lists of the best beginner-friendly online brokerages and brokerages for general investing, and many allow fractional share investing in increments as small as $1.
Before we get into the best alternatives to Betterment, a summary of Betterment’s key features and selling points is in order:
- Several different types of taxable and tax-advantaged brokerage accounts, including traditional IRAs, Roth IRAs, SEP IRAs, and rollover IRAs
- Periodic portfolio rebalancing and tax-loss harvesting for all users
- Semi-customized investment portfolios composed of low-cost exchange-traded funds (ETFs) and developed around users’ investment strategy, time horizons, and risk tolerance
- Three socially responsible investing options (ESG portfolios)
- Checking and cash management accounts (with FDIC insurance) for all users who want them
- Management fees beginning at 0.25% of assets under management (AUM) for the base Digital Plan
- A higher-priced option (Premium Plan, 0.40% AUM with a $100,000 minimum balance) that comes with on-demand access to Betterment’s in-house team of Certified Financial Planners, customized financial advice delivered by real humans on investments held outside Betterment, and access to Goldman Sachs Smart Beta Portfolios, which are higher-risk but potentially higher-reward
For more detail on Betterment’s wealth management services, checking account, cash management account, and other features, read our full-length Betterment review. Or keep reading for a rundown of the worthiest alternatives to Betterment.
- Plans and Pricing: There’s no cost to open a DIY brokerage account with Vanguard, and Vanguard ETFs and mutual funds never carry load fees (transaction fees). Vanguard’s managed investment option, Vanguard Personal Advisor Services, starts at 0.30% AUM for accounts with balances of $50,000 and above.
- Minimum Required to Invest: There’s no minimum to open a DIY brokerage account with Vanguard, although Vanguard mutual funds generally have investment minimums (often $3,000). The minimum to invest with Vanguard Personal Advisor Services is $50,000.
Vanguard is best known for its extensive and very reasonably priced assortment of Vanguard ETFs, index funds, and mutual funds. Collectively, these funds account for trillions in asset value under Vanguard’s management. Even if you don’t have a brokerage account with Vanguard, chances are high that you own at least one Vanguard fund — perhaps in your Betterment account, if you have one.
Perhaps you should open a brokerage account with Vanguard though. Its fund lineup is broad enough to create a fully diversified portfolio for virtually any long-term investor, regardless of objective or risk tolerance. That makes Vanguard’s commission- and maintenance-fee-free brokerage accounts appealing to cost-conscious investors who’d prefer not to pick their own stocks.
As long as you’re comfortable holding only Vanguard funds — and again, there’s no shortage of options here — you’d be challenged to find a more flexible or affordable option.
If you want a bit more help selecting and managing your investments, consider Vanguard Personal Advisor Services (Vanguard PAS), the company’s managed investment vertical.
Starting at a $50,000 minimum balance, Vanguard PAS offers varying levels of advisor access (rising to a dedicated human advisor for accounts above a $500,000 balance) and service. Vanguard PAS management fees are exceptionally low, especially for higher net worth clients. They begin at 0.30% AUM on the first $5 million invested and drop to just 0.05% AUM above $25 million.
For more, check out our Vanguard review.
2. Charles Schwab
- Plans and Pricing: There’s no cost to open a DIY brokerage account (Schwab One) with Charles Schwab. Stocks, ETFs, and select other instruments trade commission-free here. Management fees on Schwab’s two managed investment options range from 0.90% AUM to 0.20% AUM for Schwab Managed Portfolios — Mutual Funds and from 0.90% AUM to 0.50% AUM for Schwab Managed Portfolios — ETFs, depending on account balance.
- Minimum Required to Invest: There’s no account minimum required to invest with Schwab One. Both Schwab Managed Portfolios options require a $25,000 minimum balance.
Charles Schwab is a full-service online broker that offers a DIY-friendly brokerage account (Schwab One) and two managed investment options (Schwab Managed Portfolios). Both come with access to an array of useful market research and analysis tools that may help you become a more informed investor.
Schwab One is a commission-free trading platform that charges no fees to buy or sell stocks, ETFs, or options. Investors have the option to open a linked High-Yield Investor Checking Account — one of the top high-yield checking accounts on the market — to hold cash they’re not putting to work in the market.
Schwab’s managed investment vertical is appropriate for moderate- to high-balance investors who’d prefer not to pick their own stocks or funds, at least not directly.
- Schwab Managed Portfolios — Mutual Funds offers 24 semi-customized portfolio templates built with a range of risk- and objective-appropriate mutual funds, mostly with low expense ratios.
- Schwab Managed Portfolios — ETFs takes a similar approach but with ETFs, again with low expense ratios.
Management fees are actually more reasonable on the mutual funds side, although both are quite competitive compared with human financial advisors.
If you’re looking to start off your new investing relationship on the right foot, know that Schwab has an impressive account opening bonus. To qualify, you’ll need a unique referral code from a friend or family member with an existing Schwab account.
Use that code to open a new Schwab account with an initial minimum deposit or deposits (of funds or assets) totaling $25,000 within 45 days of your account opening date.
Your bonus amount depends on your cumulative deposit during the 45-day qualifying period:
- $100: Deposit $25,000 to $49,999 in new money or assets.
- $300: Deposit $50,000 to $99,999 in new money or assets.
- $500: Deposit $100,000 and above in new money or assets.
Multiple members of the same household must open separate Schwab accounts to qualify for bonuses individually.
3. M1 Finance
- Plans and Pricing: M1 Finance’s free plan (M1 Standard) carries no out-of-pocket fees other than fund expense ratios outside M1’s control. The M1 Plus plan costs $125 per year and adds benefits like discounted portfolio margin loan rates (M1 Borrow), two daily trading windows instead of one, and a higher yield on M1 Spend balances.
- Minimum Required to Invest: M1 Invest requires a $100 minimum balance for taxable accounts and $500 for retirement accounts. There’s no minimum balance required to open a M1 Spend account.
Like Betterment, M1 Finance combines low-cost access to equities markets with day-to-day money management capabilities. The M1 Finance suite includes three distinct services:
- M1 Invest, a low-cost investing platform that allows you to select your own stocks and funds or create custom portfolios
- M1 Borrow, a portfolio line of credit product that lets you borrow against the value of your portfolio at low interest rates once your portfolio value reaches $10,000
- M1 Spend, an FDIC-insured free checking account
The M1 Finance base plan, known as M1 Standard, is free for all users and includes all three M1 services. For $125 per month, upgrade to M1 Plus to get:
- An additional trading window for your M1 Invest trades
- 1% APY on M1 Spend balances
- 1% cash back on M1 Spend purchases
- Four ATM fee reimbursements per month for your M1 Spend account, up from one with M1 Standard
Don’t miss M1 Finance’s new account promotion either. To qualify, simply open a new M1 account by Dec. 31, 2021. Then, initiate a brokerage account transfer, including an IRA rollover, within 60 days of the account opening date. If successful, you may earn a cash bonus based on how much you transfer:
- $250 Bonus: $100,000 to $249,999.99
- $500 Bonus: $250,000 to $499,999.99
- $1,000 Bonus: $500,000 to $999,999.99
- $2,500 Bonus: $1,000,000 or more
Your new M1 Finance account type must be identical to your old account type (taxable to taxable, Roth IRA to Roth IRA, and so on). This offer isn’t valid for ACH deposits, wire transfers, or direct 401(k) rollovers.
For more, check out our head-to-head comparison of M1 Finance and Betterment and our M1 Finance review.
- Plans and Pricing: Acorns has two plans: Acorns Personal ($3 per month) and Acorns Family ($5 per month). Acorns Personal includes taxable investment accounts, retirement accounts, and a checking account. Acorns Family adds custodial investment accounts (UTMA or UGMA account).
- Minimum Required to Invest: There’s a nominal minimum ($5) to open an Acorns account.
Acorns pairs a beginner-friendly online brokerage account (taxable) with an FDIC-insured checking account, a tax-advantaged retirement investing account, and custodial investment accounts, depending on your chosen plan.
As one of the original micro-investing platforms, Acorns takes the friction out of saving for the future — making it easy to invest spare change earned after everyday purchases.
Acorns doesn’t have a free plan, so expect to spend at least $3 per month to use its features. Still, that’s a bargain considering Acorns builds its semi-custom portfolios — oriented around six levels of risk tolerance, from Conservative to Aggressive — using some of the lowest-cost funds around.
With regular use, there’s a good chance Acorns checking account alone can pay for itself, thanks to a Found Money program that promises up to 10% back on purchases with select partner merchants.
For more, check out our Acorns review.
5. Personal Capital
- Plans and Pricing: Personal Capital charges a set percentage of assets under management based on the account holder’s balance tier. Pricing ranges from 0.89% AUM for the lowest tier ($1 million and below) to 0.49% AUM for the highest balance tier ($10 million and above).
- Minimum Required to Invest: Personal Capital’s investment management platform requires a minimum balance of $100,000. There’s no asset minimum to use its personal finance tools, however.
Can’t decide whether to hire a human financial advisor or manage your own investments? With Personal Capital, you can do both.
This platform has a host of personal finance tools for novice and sophisticated investors alike, including cash flow and net worth calculators, an investment fee analyzer, and a DIY retirement planning tool. There’s no cost to use these tools and no minimum balance required to open an account with access to them.
If you want to do more with Personal Capital, you’ll need to wait until you have at least $100,000 to invest. This relatively high minimum balance is probably the platform’s biggest drawback.
Once you clear it, you can look forward to:
- Competitive pricing on managed portfolios tailored to your investing objectives and risk tolerance
- All-hours access to human advisors (and dedicated human financial advisors once you clear $200,000 in invested assets)
- Customized advice on complex financial planning topics, such as 401(k) account asset allocations
As your invested balance grows, so does Personal Capital’s value. Above $1 million in investable assets, you’ll enjoy a dedicated financial advisor, nontraditional investment opportunities from private equity and venture capital firms, and hands-on estate planning (including trust creation).
For more, check out our Personal Capital review.
6. Ally Invest
- Plans and Pricing: Ally Invest charges no commissions on stock, ETF, or options trades in self-directed accounts. Mutual fund trades may incur transaction fees. There’s no fee for managed investments (Ally Invest Managed Portfolios), but you must set aside 30% of your portfolio balance in cash.
- Minimum Required to Invest: There’s no minimum balance to open a self-directed account. The minimum balance for Ally Invest Managed Portfolios is $100.
Ally Invest is the brokerage arm of Ally Bank, one of the oldest and most popular online banks around. Like its banking counterpart, Ally Invest is known for very low fees and excellent customer service.
Ally Invest users can choose from a commission-free self-directed brokerage that makes no-cost stock, ETF, and options trading a breeze. It’s also one of the few online brokerages that waives management fees on managed portfolios accounts (Ally Invest Managed Portfolios). The only catch is that you must set aside 30% of your portfolio balance in cash to account for potential market volatility, leaving no more than 70% invested in equities.
Ally Invest has a fantastic account opening bonus for new account holders who transfer at least $10,000 in qualifying deposits. The bonus amounts and deposit tiers are as follows:
- $100 Bonus: $10,000 to $24,900
- $250 Bonus: $25,000 to $99,900
- $300 Bonus: $100,000 to $249,900
- $600 Bonus: $250,000 to $499,900
- $1,200 Bonus: $500,000 to $999,900
- $2,000 Bonus: $1M to $1.99M
- $3,000 Bonus: $2M+
To qualify, you must make your deposits within 60 days of account opening and avoid withdrawing them from your account for at least 300 days.
For more, check out our Ally Invest review.
- Plans and Pricing: Wealthfront has a single managed investments plan that charges 0.25% AUM on all balances.
- Minimum Required to Invest: Wealthfront requires at least $500 to open an investment account. Certain advanced investment options, such as U.S. Direct Indexing and the Wealthfront Risk Parity Fund, require a minimum investment of $100,000.
Wealthfront bears considerable resemblance to Betterment. Like its competitor, it’s a pioneering robo-advisor that later added an FDIC-insured checking account and a low-cost portfolio line of credit. That line of credit requires a minimum invested balance of $25,000 and caps draws at 30% of portfolio value (or $3,000 for every $10,000 invested).
Wealthfront offers an impressive range of account types for a low-cost brokerage with no monthly fees: retirement accounts (Roth and traditional IRAs), education savings accounts, and taxable brokerage accounts, for starters. The checking account has an above-average yield, too, although it’s subject to change with prevailing rates.
Meanwhile, Wealthfront’s “set it and forget it” Self-Driving Money™ product effortlessly funds your savings goals, pays bills, and maintains investing account contributions (including to retirement and education savings accounts) as per your long-term financial plan.
For more, check out our Wealthfront review.
8. SoFi Invest
- Plans and Pricing: SoFi’s self-directed investing option (Sofi Active Invest) does not charge commissions or fees on stock, ETF, or options trades. SoFi’s managed investing option (SoFi Automated Investing) does not charge any portfolio management fees.
- Minimum Required to Invest: There’s a nominal minimum balance ($5) required to open an investment account with SoFi.
SoFi Invest is the investing arm of SoFi, a financial services provider that got its start in student loan refinancing. Like some of the other Betterment alternatives on this list, SoFi Invest prides itself on a totally fee-free approach to investing — no commissions for self-directed trades of stocks, ETFs, options, or cryptocurrency, and no portfolio management fees for hands-off investors.
SoFi Invest is among a growing group of brokerages that make it easy to invest in fractional shares too. Starting at just $5 per trade, you can invest in small slices of your favorite stocks here, including big names with eye-popping share prices.
SoFi Invest has an impressive range of available account types, including three retirement account options: traditional, Roth, and SEP IRAs. Unusually for a low-cost brokerage, it offers its own low-cost ETFs as well. SoFi ETFs, as they’re known, weight component companies by growth, not just market capitalization.
- Plans and Pricing: Blooom offers three paid plans: DIY ($45 per year), Standard ($120 per year), and Unlimited ($250 per year). DIY is a self-directed portfolio optimization tool, while Standard and Unlimited operate as robo-advisors for your retirement account(s), complete with access to human advisors if you wish.
- Minimum Required to Invest: Blooom does not have a minimum account balance requirement.
Blooom markets itself as a “robo-advisor for your 401(k).” Around a retirement account fee analyzer developed to help everyday investors ferret out hidden fees that can sap investment returns, Blooom has built a thriving robo-advisor operating on an annual fee model — not an assets under management model, as Betterment and many of its alternatives do.
If you have just one 401(k) or other employer-sponsored retirement plan, the Blooom DIY or Standard plans might be all you’ll need. The latter comes with access to human advisors who can dispense financial advice tailored to your specific situation and objectives, as well as robo-advisor standbys like periodic rebalancing (auto-optimization).
If you have multiple employer accounts or want the flexibility to add more in the future, Blooom’s Ultimate plan could be for you. In addition to allowing unlimited accounts that belong to you, it comes with priority access to Blooom’s in-house advisors via live chat.
For more, check out our Blooom review.
Despite the bounty of suitable replacements for this particular robo-advisor, Betterment remains one of the best options for hands-off investors with long time horizons and a distaste for high asset management fees. After surveying the field, you might well conclude that the best “alternative” to Betterment is Betterment itself.
If not, you have no shortage of choices here. Whether you ultimately land on a full-service brokerage like Charles Schwab or an account fee analyzer turned robo-advisor like Blooom, you can rest assured your money is in good hands. And you can get ready to fire your financial advisor, if you still have one.