Betterment has been offering prospects with an funding platform since 2008, giving it an extended and secure repute as a robo-advisor. When evaluating Betterment vs. Robinhood, Betterment markets itself to starting traders, even providing an advisory questionnaire to these new to the app. The questionnaire isn’t very technical, merely asking customers fundamental questions on funding objectives, revenue, and the way aggressive the investor needs to be.
Based mostly on these questions, Betterment can set prospects up with a software-generated portfolio, however extra skilled customers can customise their very own portfolios in the event that they know the way they want their belongings organized. The appliance additionally affords portfolios based mostly on investing in firms recognized for his or her ethical enterprise practices, a latest time period known as socially accountable investing.
Betterment’s Automation
Betterment additionally automates many processes for time-strapped traders. Portfolio re-balancing will mechanically re-balance a shopper’s funding ratio if it falls outdoors the boundaries set by the person. Traders can arrange recurring deposits so that cash is persistently accessible to develop one’s belongings, and dividends are additionally mechanically reinvested to maintain one’s a reimbursement into the market.
Betterment has additionally begun offering its shoppers with instruments to avoid wasting when submitting their tax returns. Betterment claims to mechanically place holdings in additional tax-advantageous accounts, promote belongings which can be experiencing a loss, and assist to calculate how a lot customers would lose in taxes by withdrawing from their accounts.
Identical to Robinhood, Betterment requires to minimal steadiness to be stored in a single’s account, so individuals who don’t have quite a lot of funds to begin with can nonetheless start investing with as little or as a lot as they need. It must be famous that the fundamental type of Betterment does cost a managerial price of 0.25%, however that is very low in comparison with conventional brokerages.
In contrast to Robinhood, Betterment affords a a lot wider vary of account varieties reminiscent of belief and checking accounts in addition to particular person retirement accounts (IRAs). This leaves Robinhood restricted relying on a possible person’s objectives, as the applying solely offers brokerage accounts presently.