Betterment Review: Is This Robo Advisor a Scam or Legit?

At SavingExpert, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

We are reviewing Betterment so that you can make an informed decision when choosing the best robo advisor.

These days you probably are seeing ads for a new robo advisor on the daily. The truth is, they keep on popping up left and right. These robo advisors are helpful for consumers as they provide an automated and logarithm based advising service and acts as a financial advisor providing online financial advice online with little or no human consultation.

Sounds complicated. But they make it easy. Well, some of them do and today I am reviewing one of the top robo advisors in this space.

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At Betterment

About Betterment:

  • Betterment is an online financial advisor built for people who refuse to settle for average investing.
  • People who demand better should look into signing up here.
Bonus: SavingExpert readers can get started here right now!

Betterment Review


Betterment is one of the leading robo advisors, currently having over 300,000 clients and managing over $11 billion in assets. The investment advisor offers two options to clients; Betterment Digital and Betterment Premium.

betterment fee

Betterment Digital has a charge of 0.25% and does not have a minimum fee while the Premium has a fee of 0.4% and a minimum of $100,000. This option also has unlimited phone access to human advisors while on the Digital option, access to advisors is through in-app messaging where advisors respond to messages within 24 hours.

Betterment relies on the modern portfolio theory to offer investment advice thus promoting diversity. The platform also screens companies to invest in according to their social responsibility and you can choose to invest in a company which supports a cause you believe in.  If you have more than $100,000 in your account, Betterment offers you the control and flexibility of choosing what percentage to invest in any particular ETF.

Betterment has various features on their platform and these include goal-based services, RetireGuide, automatic rebalancing, Smart Deposit, and tax harvesting.

Goal-based services

This includes goal-based investments and savings. The platform has a sign-up process that walks you through a goal setting exercise that is geared towards having a safety net of three to six months’ expenses, a retirement savings target and a general investing goal. Betterment offers you a choice between different goals after considering your statistics, and then recommends targets and asset allocations based on your choices. These allocations are adjustable and the platform constantly monitors them to keep them in line with your goals.


This feature allows you to use the excess amount in your account for further investment. You can set a maximum amount for your savings or checking account and then sync it to Betterment which will monitor your account weekly for any excess and this will be added to your investments. You have a choice to cancel the transfer before it is made or limit the amount of money transferred.

Another option is the SmartSaver where you can move your money to Betterment’s SmartSaver account and this will in turn be invested in a low risk portfolio, with an expected return of 2%.

Tax Harvesting

This feature is free and automated and it works by selling and replacing securities hat incur losses thus offsetting the tax on income and gains.


This tool helps you keep track of your retirement saving goals by linking with all your saving and investment accounts off the platform. The platform then uses the information to advise you on the progress of your retirement planning, and how you can change your strategy in case you are off track with your goals.

Automatic Rebalancing

Betterment provides automatic rebalancing of your portfolio when cash flows in or out or when your allocation shifts. This service is offered free of charge to all accounts.

Costs of Investing with Betterment

There are two different costs that are incurred on the platform, and that is the management costs and the underlying cost of your ETFs. The management fee is calculated using your average account balance, and if this goes to zero, then no fee is charged to you. The ETF fee varies according to the investment undertaken but it usually ranges from 0.09% to 0.17%.

The Good and Bad

What we liked about Betterment

  • Traditionally, people have spent too much time or money managing their investments to help them reach their life goals. They take sophisticated investing strategies, modern technology, and personalized guidance to help you make more of your money.

What we didn’t like about Betterment

  • Betterment has changed its annual fees by increasing them.
  • The referral program is lacking.
  • Betterment does not offer REITs or commodities.


wealthfront logo

Another alternative to Betterment is Wealthfront so we wanted to do a Betterment vs Wealthfront review.

Wealthfront is one of the leading robo advisors that provide long-term and low- cost investment advice. Before you make a decision on where to invest from your money, you need to understand the basic features of Wealthfront and gauge how they rank in relation to others in the market.

All investments below $15,000 are not charged any fee and will be managed for free. This makes this policy good for young and cautious investors.

Minimum balance

The minimum balance for your account is $500, which is a low amount that is manageable for especially young, inexperienced or low-income investors.

Tax Loss Harvesting

Wealthfront avails tax loss Harvesting, using your losses to offset taxes that would be levied on your gains, to everyone using their platform, providing benefits to all users alike.


For those with accounts that have over $100,000, there are advanced features available, and these include, among others, Direct Indexing and Portfolio line of credit. Under Portfolio line of credit, you can request for an amount up to the tune of 30% of your account value, and this can be provided as fast as in one day. Direct Indexing is ideal for investors who want to transfer funds from other brokers to the platform which offers a seamless transition where you can retain all your assets from the previous broker. This is because ownership of the assets does not change but it is the control from the broker which changes. This feature, available on the Wealthfront platform, ensures that no tax is payable on this transaction. These two options serve to accelerate your earnings using economies of scale.

Free options

The platform also offers a free option of portfolio review to everyone, and here, you can check the diversity of your investments, consider product, transaction, and advisory fees to see whether they are in line with your goals, and also look at the strategies available for tax savings.

Path-Financial Planning Experience

You can easily connect to an outside bank and to your brokerage accounts using Path- Financial planning experience, to check the status of your accounts, and to obtain a picture of the impact of your savings on retirement. This will help you also to track your investment goals.

Fees and Charges

Wealthfront has no charges for investors in relation to account opening and closing, trading, commission and transfer fees. They however, charge an annual fee of 0.25% of the assets you put under their management. They also charge the ETF expense ratio (0.8% – 0.12%), which is a fee payable to the funds that you are investing in. For customers with less than $100,000, these fees are the lowest in the market, making it ideal for startups and new investors.

Wealthfront Summary

Since Wealthfront is an investment broker, there is no provision as to how much you will make, if any. This means that your investments are dependent on the market situation. However, the platform has sought to minimize the risk by creating a balanced and diversified investment portfolio.

Where Are They The Same?

Investment Account Types They both offer similar account types for investors: Traditional IRA, Roth IRA, Rollover IRA, SEP IRA, taxable, joint, trust and 529 college savings investment accounts.
Automatic Rebalancing Rebalancing of your portfolio is fast and easy and done for you.
Tax-Loss Harvesting No min. deposit for this service.
Socially Responsible Investing Both services allow you to align your beliefs and values with your investments via Socially Responsible Investing (SRI), however, the investment options they invest in are vastly different.
SIPC Insured SIPC protects against the loss of cash and securities — such as stocks and bonds — held by a customer at a financially troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes $250,000 for cash.

Where Are They Different?

The minimum deposit for Betterment is zero. You don’t have to have a minimum balance with Betterment. However, for Wealthfront the minimum balance is $500. This is probably the biggest difference.

The referral program is slightly different too. With the program, you can earn by sharing a link with your friends, and you get credit. With Wealthfront, you get an additional $5,000 managed for free. Betterment offers 1 free month for every referral and one free year for every three referrals. Both have no limits to the program, which is nice.

Which Is Better: Betterment or Wealthfront?

This is a difficult answer because of both robo advisors offer very similar features. If you looking at your robo advisor choice with a money-conscious perspective, then Wealthfront is the clear winner. Betterment has changed its annual fees by increasing them. You can’t go wrong with either choice though.

Is Betterment Worth It?

Betterment is not a scam and is worth it.

Bottom line: Betterment has various features on their platform and these include goal-based services, RetireGuide, automatic rebalancing, Smart Deposit, and tax harvesting. It is one of the top robo advisors that we have reviewed and we do recommend it.

Betterment Review


Commissions & Fees


Asset Allocation


Investment Options


Ease of Use


Customer Service


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Bottom Line:

Betterment has various features on their platform and these include goal-based services, RetireGuide, automatic rebalancing, Smart Deposit, and tax harvesting. It is one of the top robo advisors that we have reviewed and we do recommend it.
Brian Meiggs
Founder of SavingExpert, Brian is an entrepreneur and investor who enjoys working out, reading, spending time with his family and friends, traveling and creating great content. He’s passionate about helping others achieve their financial goals. He uses the free Personal Capital app to manage his cash flow and net worth.

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Bottom Line:

Betterment has various features on their platform and these include goal-based services, RetireGuide, automatic rebalancing, Smart Deposit, and tax harvesting. It is one of the top robo advisors that we have reviewed and we do recommend it.