Updated September 29, 2022

Betterment Fees: What You Need to Know

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Betterment Robo-Advisory Fees

Betterment charges an annual advisory fee for their digital portfolio management service. Your fee is based on your account balance.

There are two service tiers:^[1]

Digital Plan
Up to $100,000 with a 0.25% annual fee. This basic service tier has no minimum balance requirement. It includes:
- Automated portfolio management
- Automatic rebalance
- Tax loss harvesting
- Fractional shares investing
- Access to Customer Support Team
Premium Plan
Over $100,000 with a 0.40% annual fee. The premium plan is optional to those with over $100,000. You get all the benefits of the Digital plan plus:
- Proactive account management
- Advice on outside investments
- Unlimited access to financial experts for guidance on life events like retirement, saving for college, etc.

How fees work: The fee is based on your account balance. Let's say you have $1,000 in your Betterment portfolio. At the 0.25% Digital service tier, your fee will be $2.50 per year.

What the Fees Cover

The annual advisory fee covers all aspects of your portfolio management. You pay no additional trading costs.

The fee includes:

Transfers and transactions
Buying and selling securities
Automatic rebalancing
Tax loss harvesting
Advice from CFP Professionals (for the Premium plan)
Other account administration
Retirement planning tools

Discount for High Balances

For investors with balances over $2 million, the portion above $2 million gets a 0.10% fee discount. That lowers the fees to:

Plan	Fees and Conditions
Digital Plan	0.15% for the portion above $2 million
Premium Plan	0.30% for the portion above $2 million

Expense Ratios

Betterment invests your portfolio in ETFs, which have a fee called an expense ratio. This is the operating cost of the fund, such as for management, administration, compliance, marketing, etc.

Users will pay this in addition to their annual advisory fee, which Betterment does not control or profit from. Expense ratio fees are deducted directly from the fund's assets. Keep in mind that these fees do reduce your net asset value a little.

However, the platform's recommended portfolios have, on average, expense ratios of 0.07% to 0.15%.^[2] This is considered relatively low.

If you have $1,000 invested in a fund with a 0.15% expense ratio, you will pay $1.50 per year for the operating costs.

How Fees Are Charged

The fees are deducted from your Betterment investing account at the end of each month based on your account's daily average balance.

The fee is automatically deducted from your account balance. There is no extra action on your part.

If you withdraw your entire balance before the end of the month, you'll only be charged the prorated fee for the days your money was with Betterment.^[3]

Betterment never charges a fee if your account balance is $0.

Advice Packages

Betterment recently added financial advice packages. You can talk one-on-one to a financial expert and get personalized guidance.

There are 2 package tiers to choose from:^[4]

Getting Started Package ($299)
You get one 45-minute call with a licensed financial expert who will help you start your Betterment account. You'll also receive a set of action items to maximize your investments.
Specialized Packages ($399)
You get one 60-minute phone call with an advisor to review your financial situation and develop an action plan. The 4 available subjects are:
- Financial Checkup
  Review your current investment strategy.
- College Planning
  Go over your high education plans, how much you need to save, and which education savings accounts to use for your state.
- Marriage Planning
  Go over your goals, budgeting, debt, and merging finances.
- Retirement Planning
  Review your current situation, accounts and holdings, employer plans, and more.

The packages have a 30-day full refund policy if you're unsatisfied with the service you received.

How Betterment Fees Compare

Here's how Betterment's fees compare against other popular robo-advisors.

Vs. Wealthfront:
Wealthfront's annual advisory fee is also 0.25%. But the minimum deposit is $500.^[5] It's not a huge amount, but newbies may still like that they can test out Betterment with no minimum requirement.

Wealthfront does not offer a higher tier service. Wealthfront's service is completely automated - there is no access to human advisors.

	Betterment	Wealthfront
	Benefits and Features
Savings
Annual Fee	$4/month or 0.25% AUM if you maintain $20,000 or more (across all accounts) or set up recurring deposits of $250 or more per month 0.40% for accounts $100,000+	0.25%
Minimum Deposit	$0	$500
Checking	No-Fee Checking
Phone Support	Yes	Yes
Live Chat Support	No	No
Email Support	Yes	Yes
Human Advisors	Yes ($100k minimum)	No
Robo Advisor
Assets Under Management	$14 Billion	$10+ Billion
Tax Loss Harvesting	Yes	Yes
Goal Tracker	Yes	Yes
Automatic Deposits	Yes	Yes
Online Platform	Yes	Yes
iPhone App	Yes	Yes
Android App	Yes	Yes
Mobile App	Yes	Yes
Single Stock Diversification	No	Yes
Fractional Shares	Yes	No
Taxable Accounts	Yes	Yes
401k Plans	Yes	No
IRA Accounts	Yes	Yes
Roth IRA Accounts	Yes	Yes
SEP IRA Accounts	Yes	Yes
Trust Accounts	Yes	Yes
529 Plans	No	Yes
Annual Fee
Minimum Deposit
Human Advisors
Customer Service
Investment Types
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Betterment: Pricing information from published website as of 04/04/2018 Wealthfront: Pricing information from published website as of 04/04/2018

Vs. Charles Schwab:
Charles Schwab Intelligent Portfolio has no annual fee. However, the opening deposit is $5,000, which may be too steep for many newbie investors.^[6]

Charles Schwab also does not offer access to human advisors.

	Betterment	Charles Schwab Intelligent Portfolio
	Benefits and Features
Savings
Annual Fee	$4/month or 0.25% AUM if you maintain $20,000 or more (across all accounts) or set up recurring deposits of $250 or more per month 0.40% for accounts $100,000+	None
Minimum Deposit	$0	$5,000
Checking	No-Fee Checking
Phone Support	Yes	24/7
Live Chat Support	No	24/7
Email Support	Yes	Yes
Human Advisors	Yes ($100k minimum)	No
Robo Advisor
Assets Under Management	$14 Billion	$27 Billion
Tax Loss Harvesting	Yes	Available for accounts $50,000 and over
Goal Tracker	Yes	Yes
Automatic Deposits	Yes	Yes
Online Platform	Yes	Yes
iPhone App	Yes	Yes
Android App	Yes	Yes
Mobile App	Yes
Single Stock Diversification	No
Fractional Shares	Yes	No
Taxable Accounts	Yes	Yes
401k Plans	Yes	No
IRA Accounts	Yes	Yes
Roth IRA Accounts	Yes	Yes
SEP IRA Accounts	Yes	Yes
Trust Accounts	Yes	Yes
529 Plans	No	No
Annual Fee
Minimum Deposit
Human Advisors
Customer Service
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Betterment: Pricing information from published website as of 04/04/2018 Charles Schwab Intelligent Portfolio: Pricing information from published website as of 06/14/2018

Vs. Vanguard:
Vanguard Personal Advisor's annual fee is 0.30% and it does have a very steep $50,000 opening deposit. The 0.30% fee includes human oversight of your portfolio.

Advisors are on hand to help you make the best decisions for your goals. If you have $50,000 to invest, we think Vanguard offers one of the best services for the cost.

	Betterment	Vanguard Personal Advisor
	Benefits and Features
Savings
Annual Fee	$4/month or 0.25% AUM if you maintain $20,000 or more (across all accounts) or set up recurring deposits of $250 or more per month 0.40% for accounts $100,000+	0.3%
Minimum Deposit	$0	$50,000
Checking	No-Fee Checking
Phone Support	Yes	Yes
Live Chat Support	No	No
Email Support	Yes	Yes
Human Advisors	Yes ($100k minimum)	Yes
Robo Advisor
Assets Under Management	$14 Billion	$100+ Billion
Tax Loss Harvesting	Yes	client-by-client basis
Goal Tracker	Yes	Yes
Automatic Deposits	Yes	Yes
Online Platform	Yes	Yes
iPhone App	Yes	Yes
Android App	Yes	Yes
Mobile App	Yes
Single Stock Diversification	No	No
Fractional Shares	Yes	No
Taxable Accounts	Yes	Yes
401k Plans	Yes	No
IRA Accounts	Yes	Yes
Roth IRA Accounts	Yes	Yes
SEP IRA Accounts	Yes	Yes
Trust Accounts	Yes	Yes
529 Plans	No	Yes
Annual Fee
Minimum Deposit
Human Advisors
Customer Service
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Betterment: Pricing information from published website as of 04/04/2018 Vanguard Personal Advisor: Pricing information from published website as of 04/04/2018

Bottom Line

How much does Betterment charge in fees? Betterment's annual fee is 0.25% for the basic service. Accounts over $100k have the option to upgrade to the Premium plan, which costs 0.40% per year and includes access to financial advisors. Accounts over $2M get a 0.10% discount for the portion over $2M.

Betterment provides a good service for those who want to be completely hands-off. It's one of the best options for a robo-advisor with $0 minimum deposit.

The 0.25% annual advisory fee for the basic plan is low and competitive with other robo-advisors.

The 0.40% annual fee for the Premium Plan is also not a bad deal for the ability to talk to financial experts.

References

^ Betterment. Pricing, Retrieved 9/29/2022
^ Betterment. ETF Selection For Portfolio Construction: A Methodology, Retrieved 9/29/2022
^ Betterment. Am I still charged the whole fee even if I don't use the product for the whole year?, Retrieved 9/29/2022
^ Betterment. Advice Packages, Retrieved 9/29/2022
^ Wealthfront. Pricing, Retrieved 9/29/2022
^ Charles Schwab Pricing, Retrieved 9/29/2022

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