Betterment Review

Betterment is the  online broker that aims to make investing easier for those that may not know where to start. I only cam across recently and decided to write a review of the company’s services. The company is not a traditional broker in that it does not have all of the options of most full service and discount brokers.

Betterment Review

Betterment is a relatively new player in the industry. The firm has only been around since 2008 and offers similar services to MarketRiders. The company is an execution only broker that performs the transactions that are directed by client.

Betterment Advantages


Simplicity is one of the biggest advantages that Betterment offers. You do not have to worry about building a diversified portfolio. You just answer a few questions so that Betterment can assess your profile and the website will create a portfolio for you. Betterment selects the right mixture of exchange traded funds for you so you do not have to spend time selecting the right ones. This takes the work of selecting the right investments for your portfolio out of your hands.

Automatic Rebalancing

Betterment will automatically rebalance your portfolio for you as needed. If your portfolio gets out of balance than the site will recommend the changes that you need to make to your portfolio. Your portfolio will adjust as you get older and your risk tolerance changes. You can move from high growth ETF’s to much more conservative ones.

Low Cost

Betterment is a low cost broker that charges absolutely no transaction costs or commissions. The only fee that you have to pay is an annual asset management fee. Betterment bases portfolio fees on the balance in your portfolio Here is a breakdown of the charges. If you have a balance between $0 -$25,000, your annual fee is 0.9% of fund assets. If you invest$25,000 – $100,000, you will be charged a fee of 0.7%. If you invest $100,000 – $500,000, you will have a 0.5% annual fee. If you have $500,000 or more to invest, you will have a 0.3% annual fee. Any fee that is at 1% or below is really cost for portfolio management.

Diversity of Exchange Traded Funds

Betterment has a really diverse portfolio of exchange traded funds.These exchange traded funds invest in individual stocks and government bonds.This allows investors the opportunity to build a balanced portfolio with growth potential and the safety of government debt securities.Exchange traded funds are increasingly in popularity with investors because of their low cost.

Betterment Disadvantages

Lack Of Investment Options

While the broker does have a lot of ETF options, the broker does not offer investments in individuals stocks, mutual funds, or corporate bonds. Betterment uses exchange traded funds alone to achieve diversification. The broker works better for passive investors since the securities offered are not a fit for active investors.

Lack Of Individual Investment Professionals

Betterment does not employ individual investment advisers or brokers so you cannot get investment advice if you have a question. Investors that need to be walked through the investment process may benefit from a discount broker like Scottrade.

Here’s how Betterment works:

  1. You just sign up for an account using the online application form.
  2. You need to enter some basic personal information to open a new account.
  3. Link your Betterment account to your checking account in order to fund the account.
  4. The entire account sign up process can be completed in just five minutes.

There is no minimum balance requirement in order to open an account. 

Betterment’s Grade: B

Betterment works well for those that are looking for a low cost way to diversify a portfolio amongst exchange traded funds. If you are looking for an easy set it and forget it portfolio management option then you should take a look at Betterment. If you need more personalized service with a more investment choices then you should go with a discount broker.

Sign Up To Open An Account!


  1. Brittany from, here. Thanks for the great review – we appreciate your insight!

    I wanted to clarify one thing about our advisory services. While we do not assign an individual advisor to each client, Betterment itself is a registered broker-dealer and registered investment advisor. As a result, we actually provide advice to our customers right within the platform. We will recommend the right monthly contributions and asset allocation necessary to achieve each of your investing goals right as you set them up in your account. Moreover, we have dedicated customer service here at Betterment and any time anyone needs advice or has a question, they can feel free to call. Our CEO, Jon Stein, often takes customer calls himself!

    I hope this clears up how our advisory services play a role.

  2. I’ve been with Betterment since Aug of this year. I am very happy with the service overall. It’s a nice passive account that I am using to build up my travel fund as well as save for emergencies. I still have a traditional stock account when I want to purchase individual stocks.

Leave a Reply