One of the best things that you can do about your extra money is to put them into investment portfolios. Aside from having the opportunity to grow your money, you’ll also get to learn about various trading concepts and how they work.
Understandably, this can start off as a mentally overwhelming endeavor if you’ve never had any previous experiences with investments. Fortunately, there are Robo advisors that can help you manage your funds. If you feel clueless going into this, working with a Robo advisor can make things more convenient.
What are Robo Advisors?
Robo advisors can be seen as an automated version of a day trader. These software products oversee your investment portfolios and work towards achieving the goal that you set in the app.
That said, you can simply sit back and relax while your Robo advisor does all the work for you. While Robo advisors may never fully replace the knowledge and teaching capacity of a human day trading mentor, they can still make trading a little less intimidating for beginners.
Why is Betterment a Good Choice for a Robo Advisor?
Founded in 2008, Betterment has since accumulated US$16.4 billion in assets over the years. With that much money at stake, you can be sure that they’ve learned about the best ways to handle users’ funds.
If you’re looking for a Robo advisor to invest into, Betterment is an app that’s worth considering. On top of its user-friendly interface, reasonable pricing, and retiree guide, here are other factors that prove it’s the real deal:
Account Setup and Funding
Betterment features one of the easiest account setups you’ll ever come across. Upon signing up, you simply have to input your age, yearly income, and investment goal. It doesn’t bother you with any questions related to risk assessment.
Instead, it provides you with various allocation suggestions along with its risk factors. You just have to choose how you allocate your funds to them.
In terms of fees and initial deposits, Betterment tends to be a more beginner-friendly option compared to websites like Personal Capital, a competitor that uses automation but with human advisors. Users have the option of getting an individual, joint, or business account, as well as IRAs. They can simply link their bank accounts to fund their investments.
Basic account holders can enjoy a $0 minimum maintaining balance, while premium account holders must have at least $100,000 in their account.
During its early days, users only had one portfolio choice which depended solely on their risk tolerance. Now, Betterment offers more options based on users’ preferences. Examples include:
– Goldman Sachs Smart Beta Portfolio: This portfolio operates on a hybrid strategy that picks investments based on market hypothesis and value investing.
– BlackRock Target Income Portfolio: Great option for low-risk investors like retirees.
– Socially Responsible Investing Portfolio: Investments in this portfolio are exclusively for socially responsible companies.
Thanks to Betterment’s goal-setting feature, your portfolio is automatically rebalanced by the Robo advisor. With self-managed portfolios, you have to regularly do the fund reallocation by yourself, which can be exhausting. If you just want to invest passively, Betterment gets the job done.
Like many Robo advisor apps, Betterment has a mobile and desktop version, both of which are optimized to provide a convenient user experience. The layout was logically designed to make it easy for users to track their goals and investments. It also has a readily accessible FAQ section for those who need help on certain issues.
If you need personalized help for your portfolio, you can easily connect with customer support via online chat on the website or the mobile app. Communicating via phone (Mon-Fri, 9 AM – 6 PM EST) or e-mail (Sat-Sun, 11 AM – 6 PM EST) is also available.
Premium account holders have the privilege of consulting with the company’s financial planners whenever they wish. Basic account holders, on the other hand, will need to pay $199 to $299 fee for the financial planner’s services.
In Summary: The Pros and Cons of Betterment
– User-friendly features and interface
– Affordable pricing, even for beginners
– Goal-setting options
– Optimized investment portfolio options
– Retirement planning guide
– Great customer support and availability of financial planners
– Limited control over the investments
– Users are limited to certain ETFs
– Financial planner fee is expensive for basic account holders
– Account migration involves tedious paperwork
Betterment is Recommended for:
– Users with a low balance
– Users who prefer automatic rebalancing
– Users who benefit from goal-setting
– Hands-off investors
Betterment Helps You Take Care of Your Investments
Betterment is among the pioneering Robo advisors in existence. With years of experience in their field, you can be sure that they’ve figured and straightened out many issues concerning Robo advisors. They’re on a constant quest for improvement to provide beginner and hands-off investors the best help they can get.