Betterment Review
Tax-Optimized Automated Investing
Top Pick · Robo-Advisor
Betterment
Tax-optimized portfolios · auto-rebalancing
Betterment pioneered automated investing and still executes it better than most. The tax-coordinated portfolios — which hold tax-inefficient assets in tax-advantaged accounts — can add 0.5-1% in after-tax returns annually without any action on your part. For investors who want sophisticated tax treatment without managing it themselves, it remains the best pure robo-advisor.
Pros
- Tax-coordinated portfolios reduce tax drag automatically
- Tax-loss harvesting included at all balance levels
- Goal-based interface makes planning intuitive
- Socially responsible investing options available
- Fractional shares for full investment of every dollar
Cons
- No direct indexing below $100K
- Limited customization vs self-directed brokerage
- 0.25% fee higher than DIY Vanguard index funds
Best For
Run the Numbers First
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Investment returns are not guaranteed. Past performance does not predict future results. All investments carry risk.