Betterment review — good for new investors?

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Betterment is one of the biggest and most established robo-advisors, and after opening my own account, and doing deep research, I understand why.

Robo-advisor defined: A robo-advisor is an online platform that manages your money without a lot (or any) human interaction. The fact that this process is handled by computers and not humans has resulted in higher returns and much lower fees.

I am a fan of robo-advisors overall, especially for first-time and inexperienced investors — women investors in particular. This is because:

  • Robo advisors are low-fee. This means that you pay a very low amount of money for the program to help manage and grow your money.
  • Robo advisors are easy to use. Some are easier than others (see below), but compared with brokerages I have used, robo advisors are very, very simple and intuitive. One of the main reasons even very smart, successful and educated women don't invest, or don't invest as much or as aggressively as they should, is that women tend to be intimidated by financial services products. It is no wonder! These products are almost all designed by men, and want you to feel intimidated — so that you'll pay high fees for one of their advisors (usually men) to take care of your pretty little head. Eff that.
  • Robo advisors are run by computers, so human bias — including gender bias — is taken out of the equation (at least mostly, because let's get real: the algorithms are designed mostly by men).

Benefits of Betterment:

  • Betterment is one of the most established and biggest robo-advisors, with $10 billion assets under management.
  • No account minimum.
  • Very low fees — .25% of assets under management for its basic plan, compared with the 1-2%+ average charged by traditional advisors.
  • $0 annual fee.
  • Ridiculously easy to use.
  • Set up in less than 5 minutes.
  • Consult with a human financial advisor via the app.
  • Betterment has an app!
  • Free investment checkup — not required to be a client.
  • Phone support for its Premium clients ($100,000 balance minimum)

I tried out Betterment, and here is how to set up your Betterment Account:

  1. Go to I get that they are marketing to older couples here, but young single women are served, too!

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2. If you'd like your free investment checkup, go through a few steps to get a snapshot of your financial picture. It took me 3 minutes (I timed it), and was really helpful:

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3. If you are ready to open an account, go to this page. I opened an account and it took another 4 minutes, including connecting my checking account and funding it. Remember, it is free to open an account, and there is $0 minimum. So, if you'd like to play around and see if you like it, there is no obligation:

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4. In this process, you set the type of investment (retirement, emergency fund, big purchase, etc.), your income, tax bracket, and connect any other investment accounts you have so Betterment can help you create an investment strategy. If you don't know the answer to some of these questions, no big deal. Keep going.

5. Once you get settled in, you can turn on some cool features, including tax loss harvesting (explained below), and ‘Smart Deposit' — which automatically invests extra money in your checking account. If you are like me, any extra cash sitting around is likely to be blown on clothes and restaurants. With Smart Deposit, you set a maximum sum you like to maintain in your bank account, and Betterment automatically withdraws and invests anything over that. It will save you from yourself!

Betterment FAQ

Q: Is Betterment just for retirement investments?what betterment for

A: No! Betterment lets you set investment goals for a major expense (house, car, emergency fund, baby, vacation,remodel, divorce, if you're saving up!), education, retirement, or general investing:


Q: I know I'm supposed to rebalance my accounts, but not sure a) what that really means, b) how to do it. WTF? What am I supposed to do about rebalancing in Betterment

A: In a nutshell, rebalancing means that your investments are spread across a lot of types of investments, so you have the best chance of making the most money, while being protected against losing money, as the market goes up and down.

Don't try to rebalance your investment yourself. Betterment's computers spend all day and night rebalancing investments, based on very sophisticated algorithms, and whether you take money out of your account, put money in, as well as considering how the different types of investments grow and shrink, which happens organically all the time. In short: Betterment takes care of it.

Q: Tax loss harvesting. WTF is that?

A: Tax loss harvesting is the practice of selling a stock, bond or other asset that has decreased in value, or experienced a loss, and replaced by a similar one, while the “loss” is declared on your taxes, as a deduction. Tax loss harvesting is legal, and smart rich people love it. I don't know how to do this, but Betterment does, and does it automatically for you, if you chose. Just sayin'.

Q: I try to live a conscious existence and prioritize socially responsible everything, including investments.

A: Betterment has a whole socially responsible investing (known as “SI” in the biz) fund that “reduces your exposure to companies that don't meet certain social, environmental, and governance criteria,” according to Betterment. This fund is a very-low risk bond investment that does not offer the same upside of Betterment's other funds that are a mix of stocks and bonds. In other words: Betterment does offer socially responsible investing, but it is limited.

Q: I'm new to investing and way behind on where I should be. Don't I need a human to help me?

A: Ultimately, how and where you invest your money is a personal decision — a blog post cannot answer that 100% for you. However, Betterment's retirement and investment planning tools are more or less the same tools that human advisors use to help you with your finances. Plus, Betterment gives even its basic-level member clients access to human advisors via the chat function on their app — whenever they want (opposed to when the human advisor can fit you into their schedule). The price difference between Betterment and a human, traditional financial advisor is often the determining factor in whether to go with a human financial advisor, or a robo advisor like Betterment.

Related posts about investing for women:

How to get started investing for women

Sallie Krawcheck: Gender is now an asset in your career 


Some of the links in this and other posts generate a commission. I never recommend products that I don’t truly believe in. Seriously – I get asked to write about stuff all the time and turn down hard cash if I’m not feeling it.

About Emma Johnson

Emma Johnson is a veteran money journalist, noted blogger, bestselling author and an host of the award-winning podcast, Like a Mother with Emma Johnson. A former Associated Press Financial Wire reporter and MSN Money columnist, Emma has written for the New York Times, Wall Street Journal, Forbes, Glamour,, U.S. News, Parenting, USA Today and others. Her #1 bestseller, The Kickass Single Mom (Penguin), was named to the New York Post's ‘Must Read” list.Emma regularly comments on issues of modern families, gender equality, divorce, sex and motherhood for outlets like CNN, Headline News, New York Times, Wall Street Journal, Fox & Friends, CNBC, NPR, TIME, MONEY, O, The Oprah Magazine and The Doctors. She was named Parents magazine’s “Best of the Web,” “Top 15 Personal Finance Podcasts” by U.S. News, and a “Most Eligible New Yorker” by New York Observer.A popular speaker, Emma presented at the United Nations Summit for Gender Equality. Read more about Emma here.

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  1. 5 Investments You Should Make Today - Kayla Sloan on December 15, 2017 at 2:47 pm

    […] are sites, like Betterment, they handle all of the investing for you. All you have to do is create an account, set your […]

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