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Betterment Review 2022: Best for Active and High-Networth Investors

Best for Active and High Net-Worth Investors

Betterment Review 2022: Best for Active and High-Networth Investors

S$2.5 per 1K for Digital investing account

Annual Investment fee

S$0

Minimum Investment

0% - 0.40%

Platform Fees

$400 per 100K for Premium investing account

Annual Investment fee

Cash or Check

Funding Options

Free manage up to 1 year investment balance

Sign-Up Promotion

Betterment offers multiple AI-based products with no minimum investment amounts and charges low fees. But the brokerage has no straight indexing ETFs.

All details

  • Low-cost investing portfolios built, managed in line with your preferences and priorities
  • Wide account choices: joint accounts, IRAs, trusts
  • More socially responsible investing options
  • Auto-investing features like portfolio rebalancing, dividend reinvestment
  • Using advanced investing-for-tax techniques like tax-loss harvesting and asset allocations
  • Cash reserve and checking accounts with no fees
  • Unlimited communications and professional advice from a human advisor
  • A fee discount for a household balance of over USD2 million
  • Betterment offers free time to existing customers if they refer clients to the company. Free time is a period when betterment waives a plan fee. Free time takes 1 month, 6 months, or 1 year. 
  • You get 30 days free time while your referral gets 3 months free time.
  • You can have 1 year’s free time if you refer 3 clients. The maximum number you can refer a client for free time is 5.
  • A client gets 1 month’s free time if he deposits USD15,000 to USD99,000 within 45 days.
  • A 6 months’ free time is available if a client deposits USD100,000 to USD249,999 within 45 days.
  • A 1 year’s free time is on offer if a customer deposits USD250,000 or above within 45 days.
  • You can get a 0.10% discount on the household balance after the threshold if you put USD2 million into an account with Betterment. A Digital account holder will get a 0.15% fee on the household balance after the first [email protected] million. For a Premium account holder, he pays a 0.30% fee only on the amount after the initial USD2 million.

Pros

  • Low fees and no account minimum
  • Fractional shares are available
  • Multiple products, including tailor-made investment strategies, are on shelves.
  • AI-based tools for financial planning
  • User-friendly interface
  • Social responsible investment options
  • Tax-loss harvesting strategies
  • Retirement accounts, such as, Roth, IRA, 401k, trusts
  • Automatic rebalancing and dividend reinvestment
  • Free access to human advisors for Betterment premium account holders
  • Simple account opening procedures

Cons

  • No direct index exchange-traded funds
  • Only bank transfer is available for deposit and withdrawal
  • Only US dollar and US market investing

General Information

Betterment offers two investment accounts and two cash management accounts. The brokerage charges annual 0.25% and 0.40% fees for its digital and premium accounts. 

On average, expense ratios for portfolios are around 0.11%, and its pricing is net of expenses.

Clients with USD2 million household balance have a further 10% on the portion of the balance above USD2 million. The discount applies to clients of both digital and premium investment account holders.

The betterment accounts comprise no-fee cash management accounts, for example, the Cash Reserve account and the Checking account.

Disclaimer: This information may differ from what you see when you visit other financial service websites or the product’s official site, but Loan Advisor continues to keep every detail updated and accurate. This site may be compensated through third-party advertisers. However, the results of our comparison tools which are not marked as sponsored will always be based on objective analysis.

How does Betterment compare with other Robo advisors in Singapore?

You can see the differences between Betterment and other brokerages in Singapore. (Betterment is a registered investment brokerage in the US and does not have an operating business in Singapore.)

Brokerages

Annual fees in Singapore dollars

Trading fees in Singapore dollars

Minimum fees in Singapore dollars

Betterment

0.25% per USD1K (around S$1.35K); 0.4% per USD100K(around S$135K)

0

0

Moomoo

0

0.03%

1.5

Syfe

0

USD1.49 per trade

0

Tiger Brokers

0

0.04%

2.88

Poems

0

0.08%-0.12%

8

DBS Vickers

0

0.18%-0.28%

25

OCBC Securities iOCBC

0

0.18%-0.275%

25

KGI Securities

0

0.18%-0.275%

25

 

Betterment — Our Verdict

Unlike other brokerages, Betterment charges clients a flat fee per household balance and requires no further fees like trading costs, minimum fees. It fits active investors who trade more without incurring additional costs and investors with larger sums who enjoy lower cost and professional investment advice due to significant amounts.

Yet, Betterment offers various investment options, a cash management account, and one checking account free of charge. The drawback is that there are no indexing products, e.g., exchange-traded funds and index mutual funds.

How do I open an investment account with Betterment?

Betterment lets you register online with its official website like other online investment brokerages. All it requires is that you must be of age 21 to sign all legal documents. 

Besides, you should have a permanent US address, a US social security number, and a checking account with a US bank. Then, you can open a betterment account on its website. Betterment only uses inter-bank transfer for funding an account.

Read more about investments in Singapore.

Final Thoughts

Betterment, a Robo advisor in investing, provides multi-options and tailor-made products to active and high net-worth investors with flat fees and further discounts for higher investment amounts.

5 takeaways:

  1. An annual flat-fee-per-amount structure with no minimum required balance for all accounts irrespective of numbers of trades.
  2. A lower annual fee of 0.30% per thousand US dollars is available to investment amounts above US2 million.
  3. Multi-risk products like stocks, bonds, and socially responsible portfolios are available.
  4. Auto-rebalancing and dividend reinvestment are available to keep portfolios on track.
  5. The investing service from Betterment is available in the US only.

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FAQs

8 investment portfolios and 1 savings account provide different investment objectives:

  1. Betterment Core portfolio: The portfolio invests in global ETFs to diversify risks and reduce taxes.
  2. Gold Sachs Smart Beta: The fund invests in Goldman Sachs’ ETFs to aim to outperform market-capitalization portfolios.
  3. Innovation technology: The investment pool buys risky technology companies forming a part of a well-diversified portfolio for capital growth.
  4. Broad Impact: The portfolio invests in ETFs with high ESG ratings and weighs criteria equally in balancing investments.
  5. Client Impact: It aims at client-conscious ETFs investing in low-emission companies and funding green projects.
  6. Social Impact: The fund consists of 2 ETFs supporting minority empowerment and gender diversity in the workplace.
  7. Betterment cash: It is a low-risk portfolio holding cash in a network of banks to earn a variable interest rate of a yearly 0.10%.
  8. Blackrock Target Income: The income fund strikes at bond income for its goals.
  9. Flexible Portfolio Options: You can work with Betterment to devise a Betterment investment account according to your risk tolerance.

No, the professional services offered by the certified financial planners may include investments outside Betterment. The contact and advising frequency is limitless. It is free if you are a premium investing plan client.

5 types of equities are on the investment list.

  1. US large value caps: They comprise enterprises with sizes and values dominant in the market. The investment goal is to strive to increase the return with the minimum risk involved. The ETFs used are VTV, SCHV, SPYV.
  2. US mid value caps: They are targets of mid-cap companies with USD1 to 8 billion with potential growth. Value stocks are those trading at a lower price relative to earnings, dividends, and valuations. The ETFs used are VOE, IWS. IJJ.
  3. US small value caps: They are undervalued stocks traded at prices regarding earnings, dividends, and capitalizations. The ETFs used are VBR, IWN, SLYV.
  4. International developed market stocks: Betterment use international ETFs to diversify market risks though they have similar risk levels. The markets include the United Kingdom, European Union, Japan. The ETFs used include VEA, SCHF, IEFA.
  5. International emerging market stocks: These markets have similar risk exposure but can lead to higher growth. They include China, Taiwan, India, Brazil, South Africa. The ETF codes are VWO, IEMG, SPEM.

7 bond classes are available after a detailed Betterment review.

  1. US high-quality bonds:  The ETFs invest in US bonds with ratings of BBB or above. They include bonds issued by the US Government, Corporations. The ETF codes are AGG, and MUB.
  2. US municipal bonds: Betterment invests in state and local governments to finance capital expenditures. The ETF’s code is MUB.
  3. U.S. inflation-protected bonds: The bonds’ principal is inflation-protected though not the interest payments. The department of the US treasury issues the bonds. The ETF code VTIP.
  4. Short-term treasury bonds: The bond durations are short for 1 month or less. The code is GBIL.
  5. U.S. short-term investment-grade bonds are low-risk bonds issued by US blue-chip corporations. The ETF code is JPST.
  6. Internation developed market bonds: The ETF invests in international bonds issued by developed governments and quality corporations worldwide. They are less risky and offer a diversification risk. The code is BNDX.
  7. International emerging market bonds: They are bonds issued by governments of rapidly industrializing economies. However, they have higher risks, and the ETF codes are EMB, VWOB, and PCY.

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