However, I live in Hoboken, so it’s 116% more expensive than the national average. Also, individual portfolios will vary in their asset allocations based on investment goals, time horizons, and investor risk tolerance. The bottom line is if you want to go solo entirely, VTI is a very solid investment but if you want a little hand-holding, an optimized tax strategy, retirement calculators, and lots of other bells and whistles, Betterment is a 5-star investment management service. The benchmark includes the same asset allocations and ETFs used in the actual portfolios with the same risk scores. When you invest with Betterment, you pay two types of fees: management fees and expense ratios. The taxable portfolio includes upwards of 80% in stocks, with the balance invested in fixed income, natural resources, and real estate. You won’t need a minimum balance and you’ll pay no monthly fees. Better yet, if you tried to do it on your own, it would be much more expensive. INVESTORMINT EXPLICITLY DISCLAIMS ALL LIABILITY FOR ANY ACT OR OMISSION OF ANY USERS OR THIRD PARTIES. I’m willing to bet this is the most significant way they get people to try them out. It’s not designed to be a margin loan, but it offers you total flexibility. Now as is always the case with investment returns, these results require a significant amount of explanation. Please keep our family friendly website squeaky clean so all our readers can enjoy their experiences here by adhering to our posting guidelines. Daily tax-loss harvesting is provided free to all portfolios. © 2017-2020 Investormint. Plus, you’ll also be able to make an unlimited number of withdrawals (typically, you can only make six). Based on the numbers above, Betterment has an average annual investment return of just under 8.8%. Betterment vs. Wealthfront: Investment performance. A do-it-yourself portfolio invested in VTI is also a good fit for investors who like to control how their portfolios are allocated. In the final analysis, both Betterment and Wealthfront platforms. ROUND WINNER: Betterment narrowly wins here. Acorns and Betterment are easy to use in that it takes almost no effort to set them up and use them. Betterment has 32 ETF’s across 14 asset classes that they invest you in, depending on the risk level you select. So, for every $1,000 you invest, you can gain up to $10 more in tax savings. That savings alone pays for the use of the services. For example, it uses just three stock classes – US stocks, foreign developed stocks, and emerging market stocks. A do-it-yourself portfolio invested in VTI is also a good fit for investors who like to control how their portfolios are allocated. They’ve been through at least two complete redesigns and have substantially closed the gap. Thank you for taking the time to review products and services on InvestorMint. There’s no account minimum, no minimum deposit, and you can get up to one year managed free. Comments may be held for moderation and will be published according to our. For investors who speculate or trade actively, the odds heavily favor Betterment portfolios because few investors beat the market over the long term. For example, if I lived in Ames, Iowa (zip: 50010) like Thomas, Betterment’s calculator tells me that my cost of living will be 4% less expensive than the national average. That’s the price of entry. The packages address basic financial planning, such as preparing for college, marriage, and retirement. Investment $100,000), You can open an account with no money at all, Tax-loss harvesting on all taxable accounts, One low fee of 0.25% on all accounts up to $2 million, Fee drops to 0.15% on accounts above $2 million, Stock allocations include large- , medium- , and small-cap value stocks, Personal financial advisor with an annual fee of 0.40% (minimum $100,000 balance), External account analysis, including 401(k) plans, Low annual advisory fee of 0.25% on all account balances, Your portfolio includes natural resources stocks and real estate, Portfolio line of credit available on account balances over $100,000, Individual stocks used in larger portfolios, No diversification into alternative investments, like real estate and natural resources, Lower fees are offered, but not available to the typical investor ($2 million minimum), Provides analysis of external accounts, but does not consider them in asset allocations, No reduction in fees for larger portfolios, $500 required to open an account, though this is not a major obstacle, Smart Beta option requires minimum investment of $500,000. Sufficiently nerdy with enough references and citations to make your favorite librarian proud. vs Betterment Portfolios. The VTI expense ratio is 0.04% so you end up paying, on average, a minimum of 0.34% extra per year in fees using Betterment. The app can be used to run “what if scenarios”, such as seeing the projections of increasing your savings or determining how much financial aid your child might be eligible for in college.