While there are upsides to both services, the right one for you will depend on your digital-versus-human preference, the amount you have to invest, and your desire to fine-tune your portfolio. Here is a list of our partners. Betterment has no account minimum for its digital plan. Robo-advisors manage your investments with portfolio guidance and time-saving automation. We collected over 300 data points that weighed into our scoring system. Betterment boasts one of the easiest accounts to set up. At Vanguard Personal Advisor Services, the up-front work is similar, but the timeline is lengthy. So how do we make money? • $500,000 to $999,999: $2 + $1 per contract. One question facing robo-advisors like Betterment: If these services are simply building portfolios out of index funds and exchange-traded funds — primarily from Vanguard — why wouldn’t investors just go straight to the source? All financial products, shopping products and services are presented without warranty. Conclusion – Vanguard vs. Wealthfront vs. Betterment. Vanguard Personal Advisor Services charges 0.30% and requires a $50,000 minimum investment; Betterment Premium charges 0.40% and requires $100,000. Betterment Makes Stuff Great For You. Winner: We’d give an edge to the daily, reflexive rebalancing and tax-loss harvesting of Betterment, but some investors may prefer Vanguard Personal Advisor Services’ more personalized approach. Vanguard Personal Advisor Services at a glance. • $5 million and up: First 100 trades each year are free, $2 thereafter. As you near retirement, the platform will recommend changes you can make to optimize your savings. • ETFs. Of course, if you are willing to give up the human element, then Betterment’s Digital account will give you all the benefits of an automatically managed portfolio, plus many of Vanguard’s own ETFs, at a very affordable price regardless of your account balance. Every robo-advisor we reviewed was asked to fill out a 50-point survey about their platform that we used in our evaluation. Betterment clients can switch strategies after a portfolio is funded, and the platform will alert you if there are tax implications prior to making a change. Waived for clients who sign up for statement e-delivery. Want to build your own portfolio? » Want to check out other providers? The website is encrypted, and the mobile apps offer two-factor authentication. It’s why we use some of their funds in our portfolios. This Betterment versus Vanguard comparison shakes that all out to help you decide which company is best for you. But in some cases, that extra fee for management — especially the relatively small one charged by online advisors — is worth it. However, as an advice provider, their advice offerings are a bit different. None of this is particularly hard; you just have to do it. Like Betterment, Vanguard offers a snapshot of your outside investments as a part of your total portfolio and offers metrics on the likelihood of achieving your goal. So how does that, plus Vanguard’s brokerage services, compare with a managed experience at Betterment? Intro. One thing worth noting: Vanguard has an interesting structure in that the company is owned by its funds. Betterment vs. Vanguard vs. Wealthsimple. At Vanguard Personal Advisor Services, the site provides ample goal planning resources that include checklists, how-to articles, and calculators. There are a variety of ways to efficiently invest money while avoiding excessive taxes. Vanguard offers low stock trade prices (starting at … At Vanguard, you get a … In our investment platform comparison reviews we like giving at least an approximation of a head-to-head comparison of investment returns. The average expense ratio of underlying investments is 0.11%. Vanguard, but Betterment gets points here for its independent status. Customer support options (includes website transparency). The problem is, Betterment and Vanguard are two different types of investing platforms. By Sean Brison. (Vanguard Personal Advisor Services is in the middle column, Vanguard's brokerage on the right.). The MinTax cost basis method will minimize tax impact of transactions in many cases, but not necessarily every case. Betterment’s clients are eligible for tax-loss harvesting on all taxable in-house accounts, regardless of the balance. Vanguard also offers access to individual stocks, option contracts and bonds. The Betterment platform collects a variety of information about your retirement—what your dream retirement looks like, how much you have saved, and what you’ve got in external accounts, which is important since many investors have multiple retirement accounts. Betterment clients aren’t placing risky trades and there is no margin lending offered, so it’s unlikely that there would be a need for additional SIPC coverage. Vanguard’s methodology follows traditional Modern Portfolio Theory principles, emphasizing the benefits of low-cost securities, diversification, and indexing, driven by long-term financial goals. They are not intended to provide investment advice. Fee Structures. However, this does not influence our evaluations. The program has the flexibility to work with non-Vanguard assets, however, if a client is holding those assets in another account at Vanguard. Having said that it is very impossible for anyone to rank Betterment vs. Vanguard vs. Wealthfront. Share on Facebook. And here are Vanguard's offerings, with its robo-advisor on the left and brokerage on the right: For more details on each service, click to expand the accordions below. Stock and bond methodologies increase diversification by including equity funds at different capitalization and volatility levels as well as bond funds with different geographical, timing, and capital risks. here’s my experience with betterment vs. Vanguard IRA with 100% in the vanguard 2045 fund: For Betterment, Sept 2013 – Oct 3, 2014 with a withdraw on that date. Outside of the ETFs invested in large-cap firms and an emerging market ESG fund, very little of the portfolio is invested in firms that meet “socially responsible” criteria. Assuming you have $50,000 in assets and would like to decide between Betterment and Vanguard, we’ll now take a look at these investment apps in more detail – and see how Betterment and Vanguard compare across each category. Vanguard has heard that question, of course. More than 3,000 no-transaction-fee mutual funds. Disclaimer: NerdWallet strives to keep its information accurate and up to date. And so while you could build a portfolio yourself at Vanguard using many of the very same funds that Betterment uses, you also have to commit to managing that portfolio. We’d give an edge to the daily, reflexive rebalancing and tax-loss harvesting of Betterment, but some investors may prefer Vanguard Personal Advisor Services’ more personalized approach. One area we can compare is in the arena of fees. Vanguard Fees vs. Betterment Fees. Both could improve your investment returns. On the other hand, investors at Vanguard can self-manage their account, selecting from 1,800 commission-free ETFs and more than 3,000 no-transaction-fee mutual funds. Tax-loss harvesting is the selling of securities at a loss to offset a capital gains tax liability. Betterment does not offer these options at all, while Vanguard’s trading platform will offer fewer services with a clunkier design than some competing firms. $20 annual account service fee for all brokerage accounts and IRAs. This, combined with excellent goal planning and tracking tools, make Betterment an ideal choice for younger investors looking to build wealth passively. Vary by assets invested in Vanguard funds and ETFs: Betterment offers the ability to work with four types of investing goals: retirement, safety net, general investing, and major purchase. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. Unfortunately, while investment performance information is available for Betterment… Listen Money Matters is reader-supported. Both Betterment and Vanguard Personal Advisor Services offer a few options for retirement accounts, including traditional and Roth IRAs, SEP IRAs, and 401(k) rollovers. The site then projects your retirement income and provides a plan to get there. The platform has very easy-to-follow steps for setting a goal, and each one can be monitored separately. Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. Both can handle your IRA, Roth IRA, and regular investment accounts. When evaluating offers, please review the financial institution’s Terms and Conditions. Compare Betterment Vs Vanguard: Fees & Account Minimum: Vanguard imposes a $50,000 minimum hurdle, so investors with less than $50,000 available can only select Betterment. Betterment vs Vanguard 1. Vanguard Personal Advisor Services charges 0.30% and requires a $50,000 minimum investment; Betterment Premium charges 0.40% and requires $100,000. Our estimates are based on past market performance, and past performance is not a guarantee of future performance. We believe everyone should be able to make financial decisions with confidence. We cannot pick one ground where we can easily compare the three companies. 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