If you’re looking to do some investing in stocks, but simply don’t have time to learn the ins and outs of the market, consider learning about Betterment’s services.

In this write-up we’ll go over the current special promotions and offers available from Betterment, as well as do a full review of this market leading robo-advisor/automated investing firm.

Betterment is pretty much a lower cost alternative to hiring an investment advisor. The thing is, investment advisors typically only work with people with high net worths anyway. Basically, Betterment gives you investment advice in an automated fashion, which saves them money and this in turn saves money for you.

Using automation, they are able to maximize your return on investments, all while minimizing a lot of the risk associated with investing in the market.

Betterment is a reputable service and has been featured in The New York Times, The Wall Street Journal, Forbes and Bloomberg.

They are pretty much the leaders in the automated investing sector currently.

Betterment Investing Promotion: 12 Months Of Free Service

Up to 12 months of free service

Right now you can receive up to 12 months of free service from Betterment with an initial deposit of at least $15,000.

• This offer is valid only for new individual accounts with Betterment
• You must fund at least the $15,000 initial deposit within 45 days of signup

Betterment Referral Bonus: Extra Free Year

Get another free year with referrals

You can earn an extra free year of Betterment service with their referral offer, on top of the initial free service promotion above.

• For every referral who funds, you get 30 days free, and each referral gets 3 months free
• When your first 3 referrals fund, you get an extra free year.
• Once you have referred five Qualifying New Accounts (and received the associated fee waivers), you will no longer be eligible for future fee waivers. Even when you are not eligible to receive a fee waiver, you will be permitted to send invites to friends and they will be eligible to receive fee waivers through the Betterment Refer a Friend Program.

If you already have a current Betterment account, find your referral link using the interface after logging in. If you don’t yet have an account with Betterment, be sure to get some referrals going after signing up.

Fine Print

• Subject to the limitations above, a “Qualifying New Account” is a new individual Betterment account opened by your Betterment referee friend using the special designated link from your invitation, which your referee friend funds with an initial deposit, provided that the initial deposit is not withdrawn for 90 days. Betterment is not responsible for incorrect entry or other failure on the part of your referee to meet the standards of a Qualifying New Account.
• Employer-sponsored retirement accounts provided through Betterment for Business are not Qualifying New Accounts. If you are a participant in your employer’s retirement plan through Betterment for Business, and also have a personal Betterment account, only your personal account will receive fee waivers under the Betterment Refer a Friend Program. Accounts advised through the Betterment for Advisors platform are also not Qualifying New Accounts or eligible for fee waivers through this program, and if you become advised through the Betterment for Advisors platform during a period in which Betterment is waiving the fees applicable to your account under the Refer a Friend program, Betterment will not waive any fees following such date. This promotion does not apply to any fees charged by an advisor you are matched with through the Betterment Advisor Network.
• This promotion is not valid with any other offers and is non-transferrable. Offer available to U.S. residents only. Betterment reserves the right to terminate this offer at any time for any reason, to limit the amount of account bonuses you are eligible to receive, and to refuse or recover any promotion award if Betterment determines that it was obtained under wrongful or fraudulent circumstances, that inaccurate or incomplete information was provided in opening the account, that any rules or regulations would be violated, or that any terms of the Betterment Account Agreements have been violated.

*Be sure to check out all the Stock Broker promotions and bonuses here.

Betterment Review: Market Leading Robo-Advisor

Several players have emerged on the robo-advisor scene and prominent among them is Betterment (Wealthfront is the other major player). Perhaps one of the best automated investing services out there today, it provides catered options based on your individual statistics and goals.  The average person struggles with making sound investments because they are considered to be complicated and often not practical in terms of cost and use.  

Betterment presents an easy to use, ‘set-and-forget’ type of platform which absolutely anybody can use. Regardless of their financial knowledge or investment background and with no minimum deposit amount. Betterment offers a super-straightforward interface that shows a snapshot of everything on one screen; it is no wonder they already have more than $9 million in invested assets and over a quarter of a million clients worldwide.

Why Consider Betterment?

Saving money with your bank is one thing.  However, the majority of options are low-interest, and as most investors already know, there is almost a certainty that by sticking cash in the bank, you will lose out in one way or another, mostly due to inflation.  There is also the temptation of impulse buying when one has excess cash they do not need.

Couple this with the element of risk that people frequently associate with investing and there are two very compelling reasons why many don’t consider investing in the stock market.  

Solutions like Betterment and other robo-advisory firms have sought to tackle this problem. A robo-advisor platform like Betterment essentially uses computer algorithms to automatically manage investment portfolios. While these platforms rely heavily on human experts for their development, they do not need a large human presence for them to work. This reduction in the cost of human interaction has made investment management and advice cheaper and more accessible to the masses.

In the past financial advisors were the reserve of the wealthy, leaving the common man to make ill-informed and often poor investment decisions.  Betterment has this problem solved.  It offers a great alternative; it creates a tailor-made investment portfolio, that is both diverse and reduces the risk for investors. Betterment also tries to create a platform that meets the expectations of both novice and expert investors.  It truly does offer something for everyone and cater for all deposit and investment budget options.  

How Does Betterment Work?

Betterment offers the investor a choice of varied percentages in EFT allocations. Depending on this allocation between stocks and bonds, Betterment will adjust the allocation to provide the optimum performance of the investment. For instance, one may opt to choose to invest 25% in stocks, while 75% will be invested in bonds. By following respective indexes associated with the clients EFT’s closely, it ensures these investments are sound choices. This in the past would have to be done by a potential investor or a financial advisor themselves, and in the case of the latter, would also come with a potentially significant management fee attached to the time taken to calculate this.  

As an automated robo-advisory service, Betterment enables clients to open an account easily within just 5 minutes.  An initial profiling of who you are, income, goals initial deposit and other information allows the platform to advise you on various investment decisions.  The intelligent algorithms will instantly report back to let you know if they are sound and attainable.

An investment strategy is created for you, and in a few minutes, you have achieved what would have in the past, cost you thousands of dollars and many hours of research, going back and forth, and avoids a complex, somewhat stressful decision-making process.  For those still in the early stages of their career, most of the stock will be held in growth-oriented stocks while for the elderly it will lean more towards bonds and more stable stocks. This is based on the assumption that younger investors have a lot more tolerance for risks than more elderly ones.

Betterment’s Top Features

• Easy Sign-up Process. Signing up with Betterment is an easy and straightforward process, taking only a few minutes in total. It consists of answering a few questions about your investment needs and the setting of preferred investment allocation of funds. Once this is done, you can then link a personal checking account and transfer money to the Betterment account either manually or by using the deposit feature. The funds are then automatically used to purchase exchange-traded funds (EFT’S).
• Goal Focused Approach. Users of the Betterment service report just how much they love the object orientated approach of the site. When you first sign-up, Betterment will take certain details from you that then allows it to create goals for you. Adding goals to the site will then determine which types of account are used and also dictate the manner in which your money gets invested too.  You are able to create auto-deposits that pay into each goal you set. Also, each goal will have a specific asset allocation and suggested target set-up for it as well.
• Fee Structure. Betterment offers a very clear pricing strategy.  The fee you pay depends on the plan you choose and ranges from 0.25%-0.50%.  Unlike some of the other players in the robo-advisor market, there are no additional transfer or trading fees.
• Great Accessibility. Betterment has made it easy for their users to access the service.  They provide an app to allow you to log in on both IOS and Android.
• Smart Deposit. Betterment has an automatic feature that will invest excess cash into your checking account. After setting a maximum amount as a buffer for emergencies and loss of income that will last a couple of months, an amount that is automatically taken out is set. Smart deposit will frequently monitor your account in terms of usage of the funds set aside and will only automatically take out what it has been set to.
• RetireGuide. The ability to link several of your retirement accounts into the Betterment platform will mean you will have a full picture of all your savings and investments.  This is a really popular feature of the Betterment platform.  Linking your 401k account to the platform as well as other is a feature that will make this 360-degree investment view possible.
• Tax Loss Harvesting. Improve tax returns by capitalizing on investment losses. This fully automated service will mostly benefit users who can write-off losses against capital gains. Individuals with a high taxable income should see benefits of this over a long period of time. In the past, you would have needed upwards of $50,000 to gain access to tax harvesting. With Betterment, there is no minimum balance required meaning all investors across any of the three plans can benefit from this feature.

Other Features

• Fractional Shares
• Ongoing Promotions
• Human Advice
• Portfolio Rebalancing
• Live chat, email, and telephone support
• Two-Factor Authentication
• Index Tracking Funds
• Customized Asset Allocation
• Read-Only Access to apps such as TurboTax, Personal Capital, and Mint  

Betterment Membership Levels

The Three Service Levels which are offered on the Betterment site.

Betterment Pros And Cons

PROS

• Low fees. Betterment boasts the most competitive rates in the robo-advisor sector.  These low rates include features like rebalancing and trading. Fees which all weigh heavily on investing in other platforms. Management fees are between 0.25-0.50%.
• Excellent Industry Reputation. If you are looking for some assurance that Betterment does what it claims, then you will not have to search too far. Betterment has had pats on the back from major institutions such as Goldman Sachs, Vanguard, and Fidelity.  Uber has recently partnered with Betterment to provide retirement planning services for their drivers.
• Customer Support. Betterment offers customer support via email, phone and through a live-chat function on their site.  They respond seven days a week, from 9-8 Monday through Thursday, 9-6 on a Friday, and speak via live chat only from 11-5 over the weekend. All times are in ET.
• Human Advice. For Betterment Premium and Plus customers, you can pay a little more for advice through a Fiduciary Advisor. Betterment does not charge excessive management fees like other robo-advisors such as Vanguard or Fidelity professional advisory services that are also classified as broker-owned.

CONS

• Direct Tax Indexing. Betterment falls a little bit short in the taxable account area of tax-loss harvesting.  However, the platform performs automated reviews investments on a daily basis to reduce tax exposure. Unlike other platforms, it does not have direct indexing tool like other platforms such as Wealthfront who offer direct tax indexing on accounts with balances of $100,000 or more.  (Direct indexing allows investors to buy single securities held by an index rather than the EFT tracking. This method helps to segregate tax loss harvesting opportunities and saves investors with taxable accounts a lot of money).
• Structure for Pricing. Although Betterment has recently introduced a lower fee, it is still a little higher than one of their foremost rivals – Wealthfront.
• How much you are investing is key.  There are some other players who offer management of investments up to $15,000 for free, whereas with Betterment, you will pay at least 0.25%.

Who Is Betterment Best For?

Betterment is very well suited to investors that match the criteria set out below:

• If you prefer an investment with minimal research and decision making required.  
• For people with small initial deposits will appreciate this service, due to having a no minimum deposit rule
• If you want to invest but don’t have the time to perform lengthy reviews or spend time managing or updating
• For Investors who are preparing for retirement or those who would like advice on their investment strategy or the feasibility of their plan
• For those who are looking ahead to a goal and want a goal-focused platform
• If you want to benefit from a modern portfolio theory that diversifies investments with EFT’s
• For those who want to benefit from the automated rebalancing of their portfolio
• If you enjoy being in control of the risks taken but keep a firm eye on your goal

Final Thoughts

Betterment should be commended for bringing a great service that is accessible for all income brackets and investment objectives.  It’s solid reputation and growing client base are a testimony to the fact that robo-advisory services are appreciated by the market.

They are a reasonably priced product, easy to use, accessible and all-encompassing. We feel that Betterment is certainly one of the best robo-advisory services on the market. If you’re a high capital investor with at least $100k to invest, you may want to consider Personal Capital, which has a robo-advisory service along with industry leading human financial advisor services.

Also, Take A Look At These Offers From Other Investment Services

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• OptionsHouse (Acquired By E*Trade)