I assume you have to calculate your beta across all your stocks over the time of holding. 7% looks lower than the Vanguard portfolio, but maybe taxes took off some return (tax loss harvesting sounds great but could just be a gimmick). You're lagging the S&P because Betterment has a relatively large non-US stock allocation. I might roll my 401k there if all is well. I’ve used Betterment for almost two years now and have nothing but good things to say. What is a robo-advisor? 3. For Cash Reserve ("CR"), Betterment LLC only receives compensation from our program banks, and Betterment LLC and Betterment Securities do not charge fees on your CR balance. I did not know/do that but if you did, I'd love to hear how your portfolio is doing. I don't know what you're really looking for in an investment portfolio. Gotta be patient. It does dividend reinvestment and some tax optimization as well. However, you do pay a 0.25% managing fee on top of all the expense ratios inherent to each etf. Two completely different investing approaches and risk appetites resulted in two completely different results. I searched this subreddit and found another user who had a similar experience. Join our community, read the PF Wiki, and get on top of your finances! Actual returns will vary greatly and depend on personal and market conditions. It's a nice way to reduce my taxes, which I was very appreciative of this year. The only thing you're measuring here is absolute return vs absolute return. I have been very happy. Betterment is a New York based robo advisor that was founded in 2008. Used them for a couple of years (not by choice), not really a fan: --I didn't like their large allocation of international funds. The potential for it to drastically raise fees (or worse) is greater than for more established brokerages. 12 Best Robo-Advisors of December 2020 Andrea Coombes , Alana Benson December 22, 2020 Many or all of the products featured here are from our partners who compensate us. Research has shown that even after factoring in Betterment's fee, switching to Betterment will increase returns by up to 1.48% for the average investor. A $23,993.25 gain (+37.9%). The screenshot below shows an interactive graph enabling you to calculate returns over various time frames, going all the way back to 2004 (which is a tad meaningless, given the platform was only launched in 2008). It wasn't necessary to enter every transaction manually. You're absolutely right about the lower fees. --Keep in mind that Betterment is more or less still a startup, which means it may not yet have a long-term viable business model. Get a new accountant. Is true. Thanks for the tip on VTTSX too. Gotta be patient. As of October 2020, it isn’t an accredited business with the Better Business Bureau (BBB) but receives an A rating despite its 39 BBB complaints. That may not seem like a lot, but over time it translates to an extra $44,692 in portfolio gains in a taxable account. Press question mark to learn the rest of the keyboard shortcuts, https://www.reddit.com/r/investing/comments/5dwsi3/two_years_with_betterment/. What exactly is this post about? If anyone can tell me how to do that, I'd be happy to share. The biggest win for me though is the UI; both online and on the app Betterment is ridiculously easy to use. Actually that's enough, you're comparing 2 very similar products. --Their portfolio is unnecessarily complicated IMO; I really would've preferred just a simple 3-fund portfolio. Betterment requires no minimum balance and charges a 0.25% annual fee, or about $25 per year for every $10,000 invested, for a regular digital account. Betterment does TLH on taxable accounts, if you so choose. I especially liked the charts that project how much you will have in a given timeline. Betterment Review. (They do respond to emails though.). I've noticed international funds have done better than US funds over the past couple months. Betterment's 100% stock allocation would be at 6.2% for the same period. The Backend Benchmarking's most recent Robo Report finds that while Fidelity Go and Vanguard are the best robo options overall, Betterment and … That's a good question, but I'll be honest, I'm not a sophisticated investor so I don't know. That being said, their fees aren't exorbitant and they do have a lot of nice features, so I'd say it's fine. Great interfaces, easy to use, easy way to invest if you're looking to diversify. Original review: Dec. 2, 2020. Betterment maintains that you can improve your after-tax returns by an average of 0.48% per year, or an extra 15% over 30 years. Betterment has risen to the forefront as one of the biggest Robo-investing platforms in the industry. Other than that, I think Betterment and WealthFront are virtually the same. M1Finance is free, has Vanguard and other ETFs and stocks, and various blends you can pick from including target date funds. It puts all your retirement accounts into one group to show how much in retirement money you have altogether. Most tax software will do this for you automatically. My current plan is to move Betterment IRA to a M1Finance IRA with 90% VTI and 10% BND that I adjust as I approach retirement (in 15 years or so at current rates). Or maybe you're not average. I know 2 years is very short-term in the scheme of things. My Betterment portfolio did rather poorly. Emerging markets aren't doing great, hence the underperformance. But it's far from being just a cold algorithm. How Betterment calculates "better returns". As one of the top players in the industry, Betterment sets the standard for service. I am getting a 5.43% return overall from the last 6 months, but I have it heavily stock based, 90/10 I think. We make money from merchants when you use your Visa debit card. Maybe I'm giving the people who frequent here too much credit though ;). --They charge a fee on top of the fund fees. What are your returns tracked against a benchmark like the SP500? Many consider this the robo advisor that started it all. My Roth IRA is just a random compilation of stocks, mostly large-cap US-based and tech-leaning stocks and also SPY for balance. Betterment's average fees on their ETFs are 0.10% or 10 basis points for my asset allocation (90% stocks, 10% bonds) plus the 0.25% management fee (for accounts $10,000-$99,999). My Roth IRA is just a random compilation of stocks, mostly large-cap US-based and tech-leaning stocks and also SPY for balance. I had an account with them before I knew anything about investing. I did not deposit another penny into either Betterment or my Roth IRA for 2 years (and 18 days). I should be getting around a $1k refund from overpaying something and I think I am going to throw that in there and see how it does for another 6 months. At that time, my Betterment balance stood at $67,774.03. I don't want to have to research funds and make those type of decisions all the time. Betterment provides a historical performance tool that offers somewhat limited investment return data. IMO, anyone in this sub has probably already advanced past the stage of needing/using Betterment. One thing I like about WealthFront is that they do tax loss harvesting. It has a Trustpilot page but its 3.2 out of 5 TrustScore is the result of just two customer reviews — one positive, one negative. --If you own other funds elsewhere, you may have to be careful to not trigger wash sales because you can't choose what Betterment is investing in and when. A $4,477.78 gain (+7.1%). About Betterment. In addition, it's definitely the superior choice for accounts over $2,000,000 since their fee drops to 0% at that value. Press J to jump to the feed. How Wealthfront, Betterment and others manage your money. For taxable accounts Betterment can provide Tax loss harvesting which Vanguard doesn’t offer. The UI is nice, but nicer IMO before the latest redesign, which reminds me more of a CRM than a brokerage. Actually that's enough, you're comparing 2 very similar products, I am not saying that, Betterment does when they say they compete with the average self-service investor. They have decent recommendations for allocations in different funds depending on your risk profile. I can see "at this savings rate, I'll have between $X and Y in N years" at a glance. I'm a little skeptical about their claims with TLH, but I plan to test out that feature this year with ~$100 of fun money. I switched to Betterment in 2014. Betterment claims that investing in a Betterment portfolio since 2004 would have produced a cumulative return of 190.6% (which is an average annual return of 7.3%).This beats out the average private client investor's portfolio, which had a cumulative return of 109.2% over the same time period.. You can play around with Betterment's historical performance chart and see the returns for … Your own picks did great this time, but tech did great in the late 90s too before it all fell apart. Lower fees are often the better way to go, especially given that Betterment just raised its fees and Vanguard mostly only ever lowers them. Click here to make the most of your money by signing up for a Betterment … Cash Reserve offering includes spending analysis and guidance as … Their mission is to make investing simple, easy, and accessible to everyone. There is little information that I can find. Over 30 years, that extra % each year could earn you 38.8% more after-tax money in retirement compared to investing on your own. Learn about budgeting, saving, getting out of debt, credit, investing, and retirement planning. As of April 2019, Betterment has over $16 billion dollars under management and is one of the largest independent robo advisor on the market.. To help investors make the most of their money, Betterment’s investment methodology is ETF focused. I don't know your start and end dates for the Betterment investment so I can't compare the performance of the two directly. They’ve focused on providing a smarter, well-rounded platform. Betterment research suggests that this strategy can boost after-tax returns by an average of 0.48% each year, which amounts to approximately 15% over 30 years. These three robo-advisors are all low-fee, relatively low-minimum investment robos. Betterment has a history of providing investors with higher-than-average returns and competitive fees.. From early financial planning to retirement and everything in between, Betterment provides high-quality financial services and consultation to those looking for easy money management. VTTSX is Vanguard's Target Retirement 2060, 90/10 global stock and bond indexing, similar to the Betterment portfolio I guess. FINAL WINNER: Betterment. But at least in my portfolio (90% stocks 10% bonds), it has hardly ever beaten the S&P 500 either up or down cycles. We basically put in a "use this money on this date" (for example: vacation on July 1, 2020). Find new Betterment promotions, bonuses, and offers for trading stocks, ETFs, bonds, options and mutual funds here.. Betterment is one of the most popular platforms for automated investment, along side Wealthfront.These two platforms are also known as Robo-Advisors in the investment community. Then betterment suggests how risky to make the portfolio and auto adjusts it as time goes by. They have done pretty good with TLH for me. Wealthfront Review Wealthfront also came onto the scene in 2008, but its current iteration didn’t exist until about 2011, giving Betterment a three-year head start in the robo-advising space. Nerdwallet does great reviews of similar services. 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