Robo Advisors are gaining popularity in the investment industry at a very rapid pace. There are multiple options to choosing a robo-advisor and definitely some things to keep in mind when choosing.
The primary focus of this article is to give an in depth review of Betterment investing. We will discuss the pro's and con's of using Betterment as your choice of robo advisor, and ultimately to help you determine if they are the best robo advisor or not.
What Is A Robo Adviser?
If your new to investing, your probably wondering what the heck a robo advisor even is. Financial advising has been around for as long as the stock market has. Average consumers who aren't experts in the stock market and growing their money with the stock market will seek out a professional for added guidance in growing their money. This professional is called a Financial Adviser.
The main role of a financial advisor is to seek out what their client's goals and objectives are with the money they want to invest. Someone might be saving for a large purchase in the future. Others are simply looking to maximize their returns to build a retirement nest egg.
Through in depth questions and discussions, a Financial Adviser will put together a strategy and list of investments for their client based on their goals with that money. They are there to ensure common mistakes are avoided, and growth is maximized.
The downside of a Financial Adviser is how costly they are. Financial advisers are generally paid a percentage of money they have under management, or take a commission for every investment they transact. Some will even get paid for the advice they recommend on top of that. Due to their high fees and cost, families with average incomes cannot afford to hire a financial advisor.
But what if there was a company that did everything a financial advisor does, and offer it to anyone virtually (through an app, or a website)? What if they had a list of common investment strategies, and had each client answer a series of questions to determine which investment strategy to use? Could this all be done automatically through their app or website?
Well, good news folks. That is exactly what a Robo Adviser does! They usually have anywhere between 5 – 30+ investment portfolios to choose from, and will recommend which to use based on your answers to a series of questions. They then manage this portfolio for you and rebalance the portfolio periodically as the stock market fluctuates.
The best part of it all, is this is all done for a small cost per month. Most robo advisers charge just $1 per month! This allows the average income family to take advantage of expert advice and reap the rewards of stock market growth.
A Review of the Betterment Investing Platform
Betterment is one of a handful of robo advisor companies who have grown in popularity as the idea of a robo advisor has been introduced. They offer an easy to use app, small minimums to start an account, and small minimums to invest. Lastly, you get access to 24/7 investment expert advice as a client of Betterment.
Betterment Minimum's to Get Started
Most investment platforms will require a minimum account balance to even open an account. Normally a requirement of $250 – $2,000 is required to get started with most investment companies. With Betterment, you can open an account with $0 to begin.
Other investment companies will require a minimum initial investment amount of sometimes $2,000. With Betterment, you can invest with as little as $5 to begin. There are no trading fees either.
Betterment Minimums Summarized:
- Account Open Minimum: $0
- Minimum to invest each trade: $5
Access to 24/7 Expert Advice
As a member of Betterment, you also get access to 24/7 expert advice. Have a question on what a certain type of investment is? Ask for free! Not sure where to begin your investments? No worries, their experts will show you a straight path to start.
Again, normally people have to pay for expert investment advice. Problem is that most people can't afford to pay for that advice. With betterment, you can ask however many questions you want 24/7 through their live chat. Access to expert advice could be the difference of your investments making millions over your lifetime.
Easy to use app
Upon logging onto your account with the Betterment app, you won't be confused or bombarded with numbers that make no sense to you. They will show you your current account balance, your investment portfolio overview, and will even show you dollar amounts and percentages of your overall portfolio and what they are invested in.
You can read the latest articles and news on investment news and advice through their website and app. They keep things user-friendly and use basic investing terms to ensure even the newest beginners can understand with ease.
They also show you an overall dollar amount invested, followed by your total earnings, as well as basic tax info that is important to know as well.
Is Betterment the Best Robo Adviser to use?
There are multiple options when deciding which robo advisor you should begin with. Betterment's top competitor is Wealthfront. There are a few similarities and differences. But overall, Betterment gives you a larger variety of investments to choose from than Wealthfront, and the added 24/7 expert advice is my main deciding factor.
Because of that, I am a believer and current investor with Betterment. They are the best option for a robo advisor if you are new or an expert, if you're looking for simplicity, access to top tips and tricks with news and latest investment info, as well as 24/7 expert advice.
No question about it, Betterment is leading the Robo Adviser companies by a long shot.
Using a robo adviser is one of the easiest ways to generate passive income and grow your wealth passively, which is what Money Minutes is all about! If you like passive income, take a look at my top recommendation to generate passive income here.