In the ’80s and ’90s, there were just few investment apps where you could grow your money. Nowadays, there are varying options in the robo-advisor industry.
However, if you are not so sure which approach to investing is better for you, this article will give you comparisons between Betterment, Acorns, and Wealthfront.
As much as you want to go with the best, how much you have to invest and how well you can manage your investment are important factors to consider.
So that you know, each of the robo-advisor industry offers you a distinct service on overseeing your investments. Don’t forget there are lapses but it all depends on your choice of an advisor.
Therefore, see the table of contents below to have an overview.
What is Betterment?
Founded in 2008 by Jon Stein and Eli Broverman, betterment exists because it has people’s interest at heart. It’s aim is to make its investors financially free to pursue happiness in the best possible way.
On this investment plan, there is an offer for a goal-oriented investment as it is the largest Robo-advisory industry with more than $14 billion assets under management.
Also, betterment handles all aspects of investemnt for you while creating a registry to meet your investor profile.
What are the Features of Betterment?
The following are the features of this kind of robo-advisor industry. They are as follows:
- Access to Human Advisors: Although it is said that betterment is automated, with the premium option, you can gain access to a human advisor who will school you financially. To get started, you must have a minimum account of $100,000.
- Smart Deposit: Betterment monitors your link to other bank accounts and betterment believes transparency is key.
- Two-Way Sweep: While betterment keeps a close look at the money in your checking to see if there is one nit allocated to anything, it ensures your money does not go below the specified amount. If this happens, it has a way to equalize these things.
- Bank Account Management: Other than the Betterment Cash Reserve, you are offered a savings account with a higher annual percentage yield. Interestingly, you do not need to have a minimum balance to enjoy this package.
The following are the the two levels of plan on the space.
- Premium: On this investment plan, you are expected to have a minimum balance of $100,000. It will also cost you 0.40% of your assets in total.
- Digital: Here, you are under no obligation to keep a minimum balance and to manage your assets, it will cost you a token of 0.25%.
Acorns cuts across being a Robo-advisor and a savings tool. With over $15 billion under management, it shoots its target at young adults to invest what it is they have that they won’t be needing anytime soon.
This platform endears a good number of investors to itself through its full technology application.
One would ask what the characteristics of Acorns are.
Features of Acorns
- Found Money: Your ability to shop with any of the Acorns 350 partner companies earns you extra bucks in your investment account. The amount you make for shopping with these partner companies differ. So, it is a bit hard stating a particular amount.
- Round-Ups: Regardless of which account you run, you could easily link up either a credit card, debit card, or even a bank account with Acorns. The excess money you spend while making purchases is invested.
Acorns is also known as a small savings app that renders all the help you need as a fresher and halfway into being an investor.
There are three levels ranging from $1 to $3 monthly in this system. So, here’s how they work and what package you find yourself.
Using the $1, you gain access to the basic Acorns system while the $2 monthly fee offers you an opportunity to run a retirement account.
Then, the last fee for $3 gives you access to the first two levels and an Acorns Spend.
What is Wealthfront?
Just like every other robo-advisor industry, wealthfront appeals to diverse investors rather than the confined type of investors.
Having such a notion, it is no surprise how wealthfront has had over $11 billion dollars of assets under management.
What are the Characteristics of Wealthfront?
- Passive Plus: Formerly known as Direct Indexing, this tax-optimization system offers you a lot when it comes to reduction of taxes. But, to make use of this, you must have between $100,000 – $500,000.
- Portfolio Line of Credit: Offered by other Robo-advisor industries, there’s a bit of uniqueness in what wealthfront offers. Therefore, with the portfolio line of credit, you can borrow against your investment account. Also, it is secured by your investment account.
It will cost you a fee of 0.25% of your managed assets to be an investor with wealthfront.
Betterment vs Acorns vs Wealthfront
In an attempt to know which of these platforms is the best for 2020, you should have a prior idea why you want to invest.
Therefore, if you do not have a good number of starting capital and don’t intend to consider the contributing cycle, you can go with Acorns. If you are a student, Acorns is ideal for you and for the most part, it is reliable.
Be that as it may, Acorns does not have close to as powerful framework as Betterment and Wealthfront.
Betterment is a good choice with more guidance and planning. It is the only orderly platform to offer human financial advisors and it is suitable for the average investor.
While Wealthfront is an improvement on what Acorns has to offer its investors. The biggest advantage associated with wealthfront is the Direct Indexing.
Both Wealthfront and Betterment were four years ahead of Acorns in the Robo-advisor industry. So, your choice will be solely dependent on what you want your investment experience to look like.