To deliver hands-free wealth management at a fraction of the expense of a human financial advisor was the original promise of Betterment, a leading Robo-advisor. Betterment has been doing this successfully for over a decade, all the while attracting tens of thousands of consumers.
This financial service has evolved beyond its original purpose as a Robo-advisor to incorporate everyday banking services such as a high-yield cash management account and a free checking account. Because of this, Betterment has consistently ranked high on our ranking of the best Robo-advisors.
Nonetheless, that number keeps rising. Investors looking for low-cost passive asset management that improves returns without the hassle of stock choosing or market timing no longer have to settle for Betterment. There are several comparable options available alongside it.
Alternatives to Betterment for American Investors that are best
What are the other options, and who are they? Numerous Robo-advisors, including Betterment, may be found on our best-of list. Many brokerages accept fractional share investments with minimums of as little as $1, and some are included on our lists of the top online brokerages for beginners and brokerages for general investing.
A quick rundown of Betterment’s strengths and advantages is necessary before we go into the top alternatives to Betterment:
- Traditional IRAs, Roth IRAs, SEP IRAs, and rollover IRAs are just a few of the many types of tax-deferred and -favored brokerage accounts available.
- For all users, we recommend periodic portfolio rebalancing and the taking of tax losses.
- Semi-customized investment portfolios are built on users’ investing approach, time horizons, and risk tolerance, and consist of low-cost exchange-traded funds (ETFs).
- All customers who wish to do so have access to three different environmentally, socially, and governance (ESG) portfolios, as well as checking and cash management accounts (covered by the FDIC).
- The minimum management charge is 0.25 percent of assets under management (AUM), with higher rates for more Data strategies.
- Premium Plan customers pay 0.40% AUM with a $100,000 minimum balance and get access to Goldman Sachs Smart Beta Portfolios, which are higher-risk but possibly higher-reward investing options, as well as unlimited access to Betterment’s in-house staff of Certified Financial Planners.
Check out our in-depth Betterment review for additional information on the company’s various wealth management offerings, including its checking account, cash management features, and more. Alternatively, you can read on for a summary of some of Betterment’s most worthy competitors.
- Costs and Fees. No load fees are ever applied to Vanguard mutual funds or exchange-traded funds, and a Vanguard brokerage account can be opened at no-cost transaction fees. Vanguard Personal Advisor Services, a managed investing option, begins at 0.30% AUM for accounts with a balance of $50,000 or more.
- To invest in a Vanguard index fund, the minimum first investment is $3,000. However, there is no minimum to start a DIY brokerage account with Vanguard. You’ll need at least $50,000 to open an account with Vanguard’s Personal Advisor Services.
For investors, Vanguard is known for its wide variety of low-cost exchange-traded funds (ETFs), index funds (indexing), and mutual funds. There are many trillions of dollars invested in Vanguard funds. There is a good probability that you own at least one Vanguard fund, perhaps in your Betterment account if you have one, even if you don’t have a Vanguard brokerage account.
A Vanguard brokerage account could be a good idea. Its range of funds is extensive enough to accommodate the needs of long-term investors with varying objectives and risk appetites. As a result, cost-conscious investors who would rather not pick their own stocks may find Vanguard’s commission- and maintenance-free brokerage accounts intriguing.
You’d be hard-pressed to find a more adaptable or inexpensive solution, provided that you’re content to keep solely Vanguard funds and there is no shortage of those.
Vanguard Personal Advisor Services (Vanguard PAS) is the managed investing arm of the corporation and may help you choose and manage your assets with a little extra guidance.
Vanguard Personal Adviser Services requires a minimum investment of $50,000 and provides escalating tiers of advisor access up to a single, dedicated advisor for accounts with a value greater than $500,000.
Especially for those with more disposable income, Vanguard’s PAS management costs are remarkably cheap. AUM fees are 0.30% for the first $5,000,000 invested, 0.05% for the next $25,000,000, and 0% for the next $75,000,000 and up.
2. Charles Schwab
- Costs and Fees. Charles Schwab’s do-it-yourself brokerage account (Schwab One) is free to open. Commission-free stock and ETF trading, as well as the trading of certain other products. Schwab charges a management fee of 0.90% to 0.20% AUM for its Schwab Managed Portfolios — Mutual Funds and 0.90% to 0.50% AUM for its Schwab Managed Portfolios — Exchange Traded Funds, respectively.
- There is no minimum investment amount necessary to open a Schwab One account. If you want to invest in either of Schwab’s managed portfolios, you’ll need at least $25,000.
Schwab One is Charles Schwab’s do-it-yourself brokerage account; the company also provides two managed investment services (Schwab Managed Portfolios). Both provide access to a variety of resources that can help you learn more about the market and make educated investment decisions.
You can buy and sell stocks, ETFs, and options without paying any commissions or other costs when you use Schwab One. One of the best high-yield checking accounts available, the High-Yield Investor Checking Account, can be opened by investors to retain funds they aren’t actively trading with.
Moderate to high net worth individuals who don’t want to pick their own stocks or funds would find the Schwab-managed investment vertical to be a good fit.
- The 24 semi-customized portfolio templates available through Schwab Managed Portfolios — Mutual Funds are constructed using a variety of mutual funds that are suited to the investor’s risk tolerance and investment goals, with the majority of these funds having low-cost ratios.
- Schwab Managed Portfolios — ETFs employ a comparable strategy, although using ETFs, and again feature low expense ratios.
Management costs for mutual funds are lower than those of other investment vehicles but still lower than those of human financial counselors.
In order to get off to a good start with your new investment relationship, you should know that Schwab offers a generous account starting incentive. You need a special referral code from someone who already has a Schwab account in order to join the program.
To qualify for the $25,000 bonus, you must use the given code to open a new Schwab account and then make a deposit or deposits totaling at least $25,000 within 45 days of the account’s opening date.
The size of your bonus is tied to the total amount you deposit within that 45-day window:
- $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.
In order to receive bonuses, family members living under the same roof must each open their own Schwab account.
3. M1 Finance
- Costs and Fees. There are no costs associated with the M1 Standard plan which is free beyond the fund expense ratios, which are not within M1’s control. M1 Plus members can take advantage of increased returns on their M1 Spend balances, two trading windows per day instead of one, and decreased portfolio margin lending rates (M1 Borrow) for an additional $125 per year.
- When opening a taxable account with M1 Invest, a minimum amount of $100 is required, while a retirement account with a minimum balance of $500 is required. Opening an M1 Spend account is not contingent on maintaining a certain balance.
M1 Finance combines low-cost access to stock markets with day-to-day money management skills, much like Betterment.
M1 Finance offers a total of three products:
- A low-cost investment platform, M1 Invest lets you build a portfolio of stocks and funds of your choosing.
- The M1 Borrow portfolio line of credit product is available after the value of your portfolio reaches $10,000, allowing you to borrow against the value of your portfolio at low-interest rates.
- Spend with ease using M1 Spend, a free, FDIC-insured checking account.
All users can take advantage of M1 Finance’s free base plan, M1 Standard, which provides access to all three M1 services.
The M1 Plus upgrade fee is $125 per month, and it includes:
- An additional trading window for your M1 Invest trades
- 1.30% 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
Also, don’t forget to take advantage of M1 Finance’s new account special! In order to be eligible, you must create a new M1 account by December 31, 2021.
Then, within the first 60 days of starting the account, you should initiate a transfer to another brokerage account, such as an IRA rollover. If your transfer is successful, you may be eligible to receive a bonus based on the amount you send.
- $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
Taxable accounts must be converted to tax-free accounts, Roth IRAs to Roth IRAs, and so on. Direct 401(k) rollovers, wire transfers, and ACH deposits are not eligible for this promotion.
- Costs and Fees. the $3/month Acorns Personal and the $5/month Acorns Family. Acorns Personal features a bank account, a tax-free investment account, and a retirement savings account. We’re excited to announce that Acorns Family now offers custodial investing accounts! (UTMA or UGMA account).
- In order to invest, a minimum of. An Acorns account can be started with as little as $5.
With Acorns, you may open a taxable online brokerage account that’s great for beginners alongside an FDIC-insured bank account, a retirement investment account that offers tax benefits, and custodial investment accounts.
Acorns, one of the first micro-investing platforms, removes the hassle of saving for the future by making it simple to put away small amounts of money each month. Using Acorns will cost you at least $3 each month as there is no free tier.
Acorns’ semi-custom portfolios, which are tailored to investors’ six distinct risk tolerance levels from Conservative to Aggressive, are constructed with some of the industry’s lowest-cost funds, making this an excellent value.
When used frequently, the Acorns checking account’s Found Money program, which offers up to 10% cash back on purchases made with certain partner merchants, may more than cover the account’s monthly fee.
5. The Personal Capital
- Personal Capital’s pricing is based on the account holder’s balance tier and is expressed as a percentage of their assets managed. Fees start at 0.89% AUM for accounts with balances of $1 million or less and drop to 0.49% AUM for those with $10 million or more in assets.
- To begin investing using Personal Capital’s platform, you’ll need a minimum balance of $100,000. However, there is no required minimum balance to start using its personal finance features.
Don’t know whether you should work with a real person as your financial advisor or take charge of your own investments and handle the paperwork yourself. Both are possible with Personal Capital.
Cash flow and net worth calculators, an investment fee analyzer, and a do-it-yourself retirement planning instrument are just some of the many useful financial tools available to users of this site. There is no fee for using these features, and no minimum deposit is needed to open an account that grants access to them.
You won’t be able to fully take advantage of Personal Capital unless you have at least $100,000 in liquid assets. The platform’s major downside is likely its hefty minimum balance requirements.
When you finally get beyond it, you’ll be able to:
- Managed portfolios that are built around your goals and comfort level with risk are offered at competitive rates.
- Person-to-person assistance whenever you need it; if your investment portfolio reaches $200,000, you’ll be assigned a personal financial advisor.
- Personalized recommendations for navigating tricky areas of financial planning, like selecting investments for a 401(k).
Your investment portfolio increases in value, and so does Personal Capital. With an investment portfolio worth more than $1 million, you gain access to a personal financial advisor, alternative investment options from private equity and venture capital firms, and comprehensive estate planning services including trust creation.
6. Ally Invest
- Trading stocks, ETFs, and options through a self-directed account at Ally Invest is free of commissions. Transaction fees are possible with purchases and sales of mutual funds. Ally Invest Managed Portfolios are free of charge, however, you need to keep 30% of your portfolio’s value in liquid assets at all times.
- Self-directed investment accounts have no starting balance requirements. Ally Invest Managed Portfolios require a $100 minimum investment.
Among the oldest and most well-known online financial institutions is Ally Bank, whose subsidiary Ally Invest serves as its brokerage arm. Ally Invest, like its banking equivalent, has a stellar reputation for its low costs and responsive support staff.
Users of Ally Invest have the option of utilizing a commission-free, a self-directed brokerage that makes trading stocks, ETFs, and options at no cost a snap. It is also unusual among online brokers in that it does not charge clients a fee to have their portfolios professionally managed (Ally Invest Managed Portfolios).
The one caveat is that you shouldn’t invest more than 70% of your portfolio in stocks and shares, as you’ll need to save 30% in cash to weather any market storms. If you’re a new customer of Ally Invest and make a qualifying deposit of at least $10,000, you’ll be eligible for a terrific starting bonus.
Here is a rundown of the various deposit levels and bonus amounts:
- $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+
Your deposits must be made during the first 60 days of starting your account, and you must wait at least 300 days before making any withdrawals.
- Regarding pricing, Wealthfront only offers a single-managed investments package that charges 0.25% AUM on all account balances.
- At Wealthfront, the opening deposit is $500. The Wealthfront Risk Parity Fund and U.S. Direct Indexing are two of the most sophisticated investing options that demand a minimum commitment of $100,000 to participate.
When comparing Wealthfront with Betterment, there are many similarities. It’s an early Robo-advisor, like its rival, that diversified into offering banking services and a portfolio line of credit at competitive rates. This credit line has a $25,000 minimum investment requirement and limits withdrawals to 30% of the portfolio value, or $3,000 for every $10,000 in assets.
Wealthfront, as a low-cost broker with no monthly fees, offers a wide variety of account types. These include, but are not limited to, retirement accounts (both Roth and traditional IRAs), education savings accounts, and taxable brokerage accounts. Even if the interest rate on the checking account can rise or fall depending on market conditions, it still offers a decent return on investment.
Wealthfront’s set it and forget it, Self-Driving MoneyTM tool makes it easy to save, pay bills, and invest in retirement and college savings plans, all in accordance with a user-created financial blueprint.
8. SoFi Invest
- Costs and Fees. There are no commissions or fees for stock, ETF, or options trading with SoFi’s self-directed investing option (Sofi Active Invest). There are no portfolio management fees with SoFi’s managed investing option (SoFi Automated Investing).
- For new investors, SoFi requires only a $5 opening balance.
Founded as a student debt refinancing service, SoFi has since expanded into other investment opportunities through SoFi Invest. SoFi Invest, like some of the other Betterment rivals on this list, is proud to offer a fee-free investing experience, with no commissions for self-directed trades of stocks, ETFs, options, or cryptocurrency and no portfolio management costs for hands-off clients.
A rising number of brokerages, including SoFi Invest, make it simple to invest in fractional shares. You may get a piece of some of the most expensive equities in the world for as little as $5 each trade.
SoFi Invest offers a wide variety of account options, including standard, Roth, and SEP IRAs for retirement savings. In a unique twist, this discount broker also provides its own line of inexpensive exchange-traded funds. “SoFi ETFs” are exchange-traded funds that give more weight to firms in the fund based on their projected rate of growth rather than their current market value.
- Blooom’s paid plans range from $45 for the DIY plan to $120 for the Standard plan to $250 for the Unlimited plan. The Do-It-Yourself (DIY) option is a portfolio optimization tool for those who prefer to take charge of their retirement savings on their own, while the Standard and Unlimited plans are essentially Robo-advisors who can connect you with human advisors if you so choose.
- Unlike some other investment platforms, Blooom does not mandate a minimum amount in order to make an investment.
The Blooom website describes itself as a Robo-advisor for your 401(k). Blooom has established a successful Robo-advisor on a retirement account cost analyzer designed to help everyday investors find hidden fees that might sap investment returns. Unlike Betterment and many of its competitors, Blooom charges an annual fee rather than a percentage of assets under management.
The Blooom DIY or Standard plan may be sufficient if you only have access to a single 401(k) or another employer-sponsored retirement plan. The latter provides not only the tried and true features of Robo-advisors like automatic rebalancing but also access to human advisors who may provide advice unique to your situation and goals auto-optimization.
You may wish to consider Blooom’s Ultimate plan if you currently have, or anticipate needing, several employer accounts. You can connect an infinite number of accounts, and you’ll get priority access to Blooom’s in-house experts through live chat.
Betterment is still one of the best choices for hands-off investors with long time horizons and aversion to high asset management costs, despite the abundance of viable alternatives to this particular Robo-advisor. You may find, after researching the market, that Betterment is the best alternative to the service you’re now using.
If you’re looking for alternatives, you won’t be short of options. Your money will be well taken care of no matter which brokerage firm you choose, be it a full-service firm like Charles Schwab or a Robo-advisor like Blooom. Furthermore, if you still have a financial counselor, you should prepare to dismiss them.