Betterment is an automated investing platform, which is also known as a robo-advisor. The general idea is that Betterment uses your investment money and creates a portfolio that is custom-tailored to your age, risk tolerance, and investment goals.

What are the cons of using Betterment?

One of the biggest downsides to using Betterment is that you can't pick your own investments, as the only option is to use the automated investing services. And while Betterment's fees are quite reasonable, there are other platforms with lower fees. However, Betterment has significantly more features than many other robo-advisors.

Betterment Review: A Popular Robo-Advisor for Good Reason

Betterment might be for you if: You want a top-rated robo-advisor that handles the hard work of managing your investments. Betterment is one of the most popular robo-advisors and it makes investing automatic. Instead of picking stocks, Betterment helps curate a diversified, expert-built portfolio that's appropriate for your investment goals -- and its fees are fair and reasonable for the value you get.

In this Betterment review, we'll show you how to decide if this brokerage is for you.

Ratings Methodology

Betterment

Our Rating:

Rating image, 4.5 out of 5 stars.

4.5/5

Bottom Line

Betterment is a good fit for passive investors who want to put their investments on cruise control at a low cost. Betterment also offers a great cash management account with a high APY.

Fees:

$0 per trade, management fee of $4 per month or 0.25% per year

Account Minimum:

$0

Alternatives to Consider

We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.

Broker	Best For	Commissions	Learn More
Rating image, 4.0 out of 5 stars. 4.0/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	Easy fractional investing in stocks and bonds.	$0 commissions, 1%-2% crypto markups	Learn More for Public On Public's Secure Website.
Rating image, 4.0 out of 5 stars. 4.0/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	Low mutual fund fees.	$0 per trade	Learn More for J.P. Morgan Self-Directed Investing On J.P. Morgan Self-Directed Investing's Secure Website.
Rating image, 4.5 out of 5 stars. 4.5/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	Long-Term Investors, Stocks and Options Traders	Commission-free; other fees apply	Learn More for ETRADE On ETRADE's Secure Website.

Full Betterment review

Investing doesn't have to be complicated -- and Betterment makes investing especially easy. If you want to just put your investments on autopilot and build wealth without having to research companies, pick stocks, and worry about when to buy or sell, Betterment can help. There are many reasons why Betterment made our list of best robo-advisors.

How tempted am I to switch brokers to Betterment?

"I'm not tempted to switch to Betterment because I like purchasing stocks individually. Betterment manages your money for you -- but this means you can't purchase individual stocks. Sure, Betterment would probably save me time, but I have time to spare. I like how Betterment offers unlimited access to financial advisors through Betterment Premium, but the management fee is steep."

- Cole Tretheway, Motley Fool Money writer with financial expertise in brokerages

Investment offerings

Betterment makes it easy to invest your money in a wide range of expert-built, diversified, low-cost ETF portfolios. Unlike some brokerages that let you buy individual stocks, Betterment only allows ETFs, and requires you to buy into its unique robo-advisor approach.

Investments

Cryptocurrency
ETFs (stocks and bonds)

Brokerage accounts

Cash management account
Rollover IRA
Roth IRA
SEP IRA
Traditional brokerage
Traditional IRA

TIP

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TIP

Other financial services

The Betterment Cash Reserve account is Betterment's cash management account. It has an APY which is competitive with the best savings accounts.
Betterment Checking is a mobile-first checking account with a rewards debit card.

Commissions and fees

Betterment offers a few choices of fees, based on which type of robo-advisor service you want, total assets invested with Betterment, and choices of investments. Betterment's standard 0.25% annual management fee is one of the lowest advisory fees we've seen, especially considering how much value you get from the Betterment platform.

The higher-priced Betterment Premium plan gives you unlimited access to financial advisors (all CFP® professionals) by phone.

Reason	Cost
Betterment automated investing	0.25% annual fee based on invested assets, or $4 per month
Betterment Cash Reserve	No fee
Betterment Checking	No fee
Crypto	1% annual fee plus trading costs
Premium	0.65% annual fee (minimum investment balance of $100,000)

Data source: Betterment.

Margin rates

Betterment does not offer margin loans.

Research and education

Betterment is a robo-advisor, not a full-service brokerage designed for professional day traders. As such, Betterment does not offer professional grade third-party investment research, stock analysis tools, and other advanced features that you might expect from a more robust trading platform.

But that's fine. After all, the biggest reason to sign up for Betterment is because you don't want to spend time analyzing stocks. You choose a robo-advisor like Betterment to do the heavy lifting on designing your investment portfolio, so you can put your money on autopilot.

However, Betterment does offer an extensive library of financial education content that can help you understand your investments and make better-informed decisions about your money. A few recent topics include:

The Betterment Core Portfolio strategy
How memestocks affected investors' emotions and actions
Are bonds right for you? Q&A with Betterment investing
The keys to building wealth, whether you rent or buy
How much cash is too much cash to be in savings?

Interface

You can use the Betterment platform from the online desktop version or via mobile app. Like most robo-advisors, Betterment starts the investment process by asking you a series of questions about your age, investment goals, and other topics that help Betterment to assess your risk tolerance.

Based on your answers, Betterment automatically builds a personalized investment portfolio, which you can modify. Also, depending on your investment goals, Betterment can tell you how much you need to deposit initially as well as ongoing.

Betterment's all-in-one platform doesn't just help you buy stock ETFs; based on what you tell Betterment about your financial goals, it can also help you open a no-fee checking account, a high-yield cash account, and more.

In addition to the standard portfolio allocation service offered by every robo-advisor, Betterment offers some services that help it stand out from the competition. For example, instead of rebalancing client accounts once per year or quarter to maintain the desired asset allocation, Betterment does automatic rebalancing to keep your portfolio on track whenever it's needed.

Betterment is one of the only robo-advisors that provides an automatic tax-loss harvesting feature with all accounts, regardless of balance.

Betterment doesn't require a minimum account balance, making it a good stock broker for beginners. However, you need to deposit at least $10 to start investing. In contrast, many competitors have minimums of $500 or more.

App

The Betterment mobile app's design and feature-rich capabilities mean you can manage all of your day-to-day needs on the go. Betterment's real customers agree, as evidenced by its high ratings in both the iOS and Google Play app stores. Simply put, it's one of the best investing apps from a robo-advisor.

iOS rating: 4.8/5 stars
Android rating: 4.7/5 stars

Here's one thing that makes the Betterment app unique compared to most brokerages: its mobile app gets good ratings for both Android and iOS.

Many other brokerages and banks have lower ratings for their Android apps -- with many Android users complaining about bugs and broken features. Having such a high-rated app for Android and iOS is a good sign for the quality and reliability of the Betterment user experience.

Customer service

Like many brokerages and banks that we've reviewed, Betterment does not have a great track record with the Better Business Bureau. Based on its company profile on BBB.org, Betterment is not BBB accredited and currently has a rating of D-, with 1.31 out of 5 stars from customer reviews.

Betterment has closed 21 complaints on BBB.org in the past 12 months. Most of the customer complaints have focused on problems with unauthorized contributions to retirement accounts, and difficulty transferring funds between financial institutions.

Betterment also gets negative reviews on Trustpilot, with 1.8 out of 5 stars based on customer reviews. Some of the customer complaints on Trustpilot are related to problems with accounts being locked, passwords not being recognized, and delays with transferring money to another investment platform.

Many brokerages and banks get less than positive feedback on these major public customer review sites. In fairness to Betterment, the company appears to be making prompt, thorough responses to every complaint on BBB.org. When you consider that hundreds of thousands of people use Betterment, a few bad online reviews are likely not representative of the average customer experience.

But in case you encounter issues, or just have questions about your Betterment account, there are several ways to contact customer service:

24/7 online chat with Betterment's virtual assistant
Phone line available Monday-Friday, 9 a.m. to 8 p.m. EDT -- call 718-400-6898

Security

Betterment uses industry-standard fraud and data security protections to help keep your account safe from hackers and unauthorized uses. A few of Betterment's security practices include:

Data encryption when data is transmitted and in storage, including strong browser encryption.
Secure data center storage.
Limited data access for Betterment employees based on the principle of "least privilege." Betterment staff only access the amount of customer information that is needed for their job.
Two-factor authentication with one-time authenticator codes.

About

Betterment was launched in 2010, and now has more than 900,000 customers with $50-plus billion of assets under management (AUM). The Betterment robo-advisor investment philosophy is based on using automation and algorithms to optimize investments better than a human can.

With Betterment, you can sit back and let your expert-built portfolios do the hard work of building wealth for your future. Betterment also offers unique portfolios organized around specific investment themes, like ESG investing, climate impact investing, social impact investing, innovative technology companies, and more.

Learn more about Betterment

Keep reading about Betterment on these pages:

Review sources

Our brokerage rating methodology

At The Motley Fool Ascent, brokerages are rated on a scale of one to five stars. We primarily focus on fees, available assets, and user experience; however, we also take into account features like research, education, tax-loss harvesting, and customer service. Our highest-rated brokerages generally include low fees, a diverse range of assets and account types, and useful platform features.

See our full methodology here: Ratings Methodology

My investing experience

I have been investing for retirement for 20 years, and I am passionate about passive, hands-off, diversified, low-cost investing. I don't pick stocks and I don't try to beat the market; I just want to own a nice mix of ETFs and let the market work for me. I'm not a Betterment customer, but I like this robo-advisor's approach to investing. If you want to make your investing automatic, with less work and cognitive load for you, Betterment could be a good choice.

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FAQs

Betterment is an automated investing platform, which is also known as a robo-advisor. The general idea is that Betterment uses your investment money and creates a portfolio that is custom-tailored to your age, risk tolerance, and investment goals.
One of the biggest downsides to using Betterment is that you can't pick your own investments, as the only option is to use the automated investing services. And while Betterment's fees are quite reasonable, there are other platforms with lower fees. However, Betterment has significantly more features than many other robo-advisors.

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