5 Ways Betterment Differs from Its Competitors

Betterment’s investment services first came on my radar a couple of years ago. I invested $1,000 with the company as one of my investment experiments for the first Grow Your Dough Throwdown in January 2014. Later that year, I became an affiliate for the firm (gaining the opportunity for sales commissions on new accounts) and became a contributor to the firm’s online magazine.

Those in the financial industry refer to Betterment and similar companies as “robo advisors.” Robo references a robotic, rather than human, financial advisor. Advisor references the services the company provides as an SEC registered investment advisor (RIA), which involves the recommendation and management of a diversified investment portfolio for clients.

There are many similarities among robo-advisory services. But here are five ways that Betterment differs from similar advisory services, such as those from Wealthfront and TradeKing Advisors.

Acorns Review

An intriguing entrant to the robo-advisory arena is Acorns, an SEC Registered Investment Advisor. The idea behind this firm’s approach is to enable investors to “invest the change” (aka “acorns” or relatively small amounts of money) that will build over time into a sizable portfolio.

Schwab Intelligent Portfolios Review: Asset Allocation with a Modern Twist

For many years, Schwab has offered wealth management services, including managed portfolios and custom advice. However, the more traditional model of delivering these services at the entry level has involved packaging a diversified portfolio of mutual funds and ETFs with a minimum investment of $25,000 and asset management fee of .90%.

The automated “intelligent portfolios” allow smaller investors to gain access to advisory services with no direct charges to their accounts. Learn more about these portfolios.

Wealthfront Review

Investment services offered by Wealthfront are targeted to the busy investor who wants to 1) develop a diversified portfolio; 2) save money on taxes through tax-loss harvesting; and 3) outsource day-to-day investing decisions.

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