What am I getting for Betterment’s fee?

Betterment’s straightforward fee is a great value. Beyond being the simplest way to invest intelligently, we offer a number of unique features under the hood which simplify your life as an investor and helps you get better returns:

  • Dollar-based transactions/fractional shares. When you transfer money to Betterment, every penny is invested into your portfolio as fractional shares, so all your money is working for you.
  • Better diversification. Any single fund has its shortcomings. By balancing your portfolio among multiple funds, Betterment gives you appropriate exposure to small cap and value stocks while still maintaining a balance of large cap and growth stocks. Purchasing these ETFs directly and maintaining the proper balance over time would be a very demanding task.
  • Rebalancing. The composition of your portfolio will naturally drift over time as the market fluctuates, but Betterment rebalances you back to your desired allocation using cash flows, or whenever your portfolio composition drifts by 3%. Because we use your existing cash flows, we rarely have to make a sale to rebalance. Experts agree that regularly rebalancing your portfolio can increase returns and reduce risks, but even the most disciplined investors don’t do it because of all the work involved.
  • Tax Efficiency. When we do make a sale, we sell your losses (short term, then long term) first, then your gains (long term, then short term) to minimize your tax bill. Additionally we offer services to make your portfolio more tax efficient by allowing you to enable Tax Loss Harvesting and Tax Coordination.
  • Better access to your own money. Your money is available without a transaction fee, and without a minimum balance requirement. If you have an unexpected event and need your money, it can be back in your checking account in 4 to 5 business days.
  • Integrated and actionable advice. Our advice and retirement planning tools give you actionable guidance, which we help you execute immediately.