Betterment has added a minimum $4 monthly fee on their investment accounts. Their regular fee is .25% of you balances, and they’ll now added a tier for those with less than $20,000 invested to pay $4/month.
The annual price will remain the same (0.25% for Digital; 0.40% for Premium) for customers with a $20,000+ balance or who have recurring deposits of $250+ each month. No-fee products like Cash Reserve, Checking, and financial planning tools will remain unchanged.
The pricing shift is worth keeping in mind for someone who signed up with a small balance to test the waters or the like.
For the math inclined, there is a small window of investors who have around $19,500 in their account who will actually save with the $4/month structure versus the .25% structure. 🙂Â
Hat tip to Grant
You need BetterHelp instead
According to the Robo report Betterment is not in the top 10 of roboadvisors in regards to returns or sharpe ratio.
There are better options out there.
Yeah, including not using a robo.
Like?
Roboadvisors have only existed in the ‘up only’ era following 2008. Their main selling point was modern portfolio theory at 0.25% fees instead of 1%+. And the automated tax loss harvesting, AKA “IRS compliant wash sales.”
When I’ve used them I noticed that after the 1st year very little tax losses were available to harvest. The whitepapers talk about 1-2% benefit, but it’s been ‘up only’ for a long time – as long as cell phones and social media.
One narrative is we’re in for increased volatility as the rich move markets scrambling to maintain par with inflation, which should make the tax loss harvesting into a factor. Or it’s like Full Self Driving – and will just run the portfolio into a wall.
Buy VTI or SCHB for stocks, BND and SCHZ for bonds. These two pairs are good pairs for tax loss harvesting.
Rebalance to your preferred target stock:bond ratio every ~December.
Do TLH when there is a larger market dip.
It literally takes 1-2 hours PER YEAR to follow that. Look at your net hourly pay and compare to what you would pay annually for a robo..
(This comment is also ~80% of what a financial planner is doing for you. Please write the check payable to..)
Thank you.
Do you know anymore pairs like that?
Is there a definition of ‘larger market dip’?
I know there’s data out there for rebalancing and what I come across says ‘don’t rebalance too often’ without stating what “too often” means.
I have been with Wealthfront since 2018. first 5000$ is free and every referral gets 5000$ more.
let me know if anyone needs it.
Just logged on and tried to withdraw that is left. But I am seeing the following shown on the withdraw page.
There are no available withdrawals for your accounts. Read more
I remembered I have one external bank linked in the past and did withdrawal successfully last time. Anyone else has the same experience?
The 25bps robo business model never had good enough economics. Why Betterment went into 401k, RIA, and CMA/”banking.” With no more cheap money, there’s also much more pressure to aim towards profitability / a sustainable business.
They are pulling the Stash stunt
Charging fees on brokerage accounts again? One step forward, two steps back after most brokerages removed fees a year or two ago.
I wish I had another option for my HSA, but most HSAs that offer the investing option only have one brokerage option. Maybe they are just trying to collect rent off of the captive audiences.
Try HealthEquity. They appear to have what you’re seeking.
Erm.. look at Fidelity HSA.
Yup, I do an indirect rollover from employer HSA to Fidelity every 12-ish months – taking care to make it slightly more than 12 to make sure I don’t run afoul of the rules. Fidelity is great as an HSA custodian.
Custodian to custodian transfers don’t have that once per 12 months limit.
Right, but the originating institution often imposes a fee for an outbound, direct rollover. Indirect rollovers are free. It’s not worth the added cost to do it more than once per year.
I never thought about doing continuous/recurring rollovers to a different account; I didn’t realize that was even a possibility. You both get up votes from me.
My current HSA balance is butting up against Fidelity’s fee-free limit of $25k. It seems unclear from the terms: is the 0.35% fee for accounts >$25k applied to the whole account or only the balance above $25k? For example, would $25,100 have a fee of 35¢ or $87.85?
Fidelity HSA (self-directed) is fee-free without limits. Fidelity Go HSA (managed) has the 0.35% fee for accounts over $25k.
Starship is free, I believe, investing is $1/month. There’s also a $30 signup (non-referral!) bonus https://www.starshiphsa.com/get30/
Betterment isn’t charging a fee for the account, but for the advisor. They never had a fee-free brokerage account.