Welcome to my Betterment scam review
Betterment is a Robo-advisor financial investment focusing more on automated processes based on algorithms than on investors.
The question is, is Betterment a good site to invest? or just gonna take your money.
Let’s find out in this review
In this review will try to answer the following four questions. It should give you a clear understanding of Betterment and whether it’s worth your money.
- What Is Betterment?
- How Betterment REALLY Works?
- Is Betterment Scam or Legit?
- Is There Something Better?
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WHAT IS BETTERMENT?

Program Name: Betterment
Website: www.betterment.com
Creator: Jon Stein
Price: 0.25%-0.50%
Recommendation: Yes
Betterment is an online automated investment platform and has the largest independent Robo-advisor and was the first independent online financial advisor to reach $10 billion AUM in July 2017.
And on March 2018 Betterment earned $13.5+ billion in assets.
With Betterment, all of your business knowledge is online. Based on your preferences and objectives, an algorithm calculates your portfolio.
In the 1950s, Harry Markowitz created the algorithm that uses Modern Portfolio Theory and supported by 70 years of investment research.
The MPT ( Modern Portfolio Theory ) focuses on investing in significant business/market sectors rather than individual securities.
Betterment constructs portfolios by investing through ETFs in broad-market sectors. They use ETFs because they are low-cost and tax-efficient.
Everything runs through computers right now so they can offer investment management at a low cost. It makes it cost-effective for any investor, regardless of the size of the investment.
It means that if you have less than half a million in assets, they won’t talk to you.
So, if you are new to investing and don’t have enough money, Betterment may be the solution for your investment needs, and if you are a long-time experience investor Betterment may be the excellent platform to have some of your portfolios managed professionally.
HOW BETTERMENT REALLY WORKS?

When you go to Betterment website, there is a get started button on the upper right and click. When you can sign up, it only takes a few minutes, and the entire process happens online.
There is a lot of question to ask a series of risk tolerance and investment goal-related questions. Your answers will determine your portfolio allocation.
You can open any one of the following types of accounts with Betterment:
- Roth IRA
- Trust account
- Traditional IRA
- SEP IRA (single participant only)
- Individual or Joint taxable investment accounts
- Betterment for Business
You must be a U.S citizen to open your account, and also you have to put your permanent address, security number, and link a checking account with a U.S. bank.
To open an account, you don’t need to transfer money. Betterment has no minimum requirement for the initial deposit. Today you can set up the account, but later fund it, such as automatic paycheck deposits.
Better will build a portfolio consisting of a mix of 13 ETFs. There are six stock ETFs and seven bond ETFs to choose from. Each collection will have at least some of the 13 ETFs, but the specific percentages vary according to your profile.
Those 13 ETF’s give almost the full investment universe exposure. This includes foreign and domestic equity, as well as local and international bonds.
Those funds also represent different sectors. For example, a mix of large-cap, mid-cap, and small-cap stocks will include in your portfolio.
You will expose to short-term and long-term securities, corporate and government bonds on the bond sid.
Betterment will handle the details of managing your portfolio for you, but you still need to put the money in.
If you want to adjust them manually, Betterment has a new feature for accounts with $100,000 or more. see the image below.

The Flexible Portfolio let you adjust the portfolio manually for a variety of reason.
If your accounts outside of Betterment heavily weighted in one sector, you can use this to reduce your inside Betterment allocation to balance it out.
Betterment Features and Benefits
Here are the features and benefits of Betterment.
- Account protection – Your account will be protected by the Securities Investors Protection Corporation (SIPC) for up to $500,000 in money and securities, including up to $250,000 in cash it will protect you from a broker failure, but not from market fluctuations.
- Customer Service – You can reach Betterment by phone or live chat from Monday to Friday, from 9:00 am to 8:00 pm ET Time, and from 11:00 am to 6:00 pm ET on Saturday and Sunday. You can also always contact them by email.
- Betterment Mobile App – Betterment offers both iOS and Android mobile applications. The App Store and Google Play are available for download.
- Creating Investment Goals – You can create customizable sub-accounts that call goals for Betterment. These may include retirement, or another intermediate objective, such as saving for college education or a house.
- Flexible Portfolios – After you have set up your portfolio, asset holders with $100,000 + will be able to adjust your portfolio allocations to suit your needs better manually. You get your allowance, but all of Betterment’s management’s automation and tax benefits.
- RetireGuide – Betterment offers this as a tool for retirement planning. It gives you the advice to enable you to achieve your retirement goals. You can determine how much money you are likely to spend on retirement plus how much you need to save to support that expenditure.
- SmartDeposit – This is the automated cash investment tool used by Betterment. It works by moving excess cash to your Betterment account from your bank account, based on the parameters you set. For example, you set the maximum amount of money in your bank account you want to have. Then Betterment automatically moves your investment account’s excess balance.
- Betterment Advisor Network Recognizing that some people may prefer a human investment advisor contact to go along with their portfolio of Robo-advisors, Betterment created this network. They can match you with one of the network’s vetted independent Certified Financial Planners who will get to know you personally, develop a customized, comprehensive financial plan and help you with more advanced and complex financial issues.
Betterment Investment Portfolio
Betterment portfolios constructed from six stock ETFs and seven bond ETFs.
Here are the ETF’s currently being used by Betterment:
Stock Funds
- U.S. Total Stock Market – Vanguard U.S. Total Stock Market Index ETF (VTI)
- U.S. Large-Cap Value Stocks – Vanguard U.S. Large-Cap Value Index ETF (VTV)
- US Mid-Cap Value Stocks – Vanguard US Mid-Cap Value Index ETF (VOE)
- U.S. Small-Cap Value Stocks – Vanguard U.S. Small-Cap Value Index ETF (VBR)
- International Developed Stocks – Vanguard FTSE Developed Market Index ETF (VEA)
- Emerging Market Stocks – Vanguard FTSE Emerging Index ETF (VWO)
Bond Funds
- Short-Term Treasuries – iShares Short-Term Treasury Bond Index ETF (SHV)
- Inflation-Protected Bonds – Vanguard Short-term Inflation-Protected Treasury Bond Index ETF (VTIP)
- US High-Quality Bonds – Vanguard US Total Bond Market Index ETF (BND)
- National Municipal Bonds – iShares National AMT-Free Muni Bond Index ETF (MUB)
- US Corporate Bonds – iShares Corporate Bond Index ETF (LQD)
- International Developed Bonds – Vanguard Total International Bond Index ETF (BNDX)
- Emerging Market Bonds – iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB)
The National Municipal Bond ETF refers only to taxable equity reports. There is no need to include municipal bonds in those accounts as retirement accounts are already tax-deferred.
Once the portfolio established, Betterment will rebalance it as needed as funds change in value. And once again, this process is automatic, based on the percentage of the divergence from the target portfolio.
Betterment Tax-Loss Harvesting

The Tax Loss Harvesting is an investment strategy in which losing investments are sold to generate capital losses that will reduce capital gains from winning stakes.
The strategy reduces the net profit in your account, and therefore, it also lowers the capital gains tax that you will pay.
Betterment offers TLH on all of its taxable accounts. It is not available with retirement accounts as the investment gains in those accounts are still tax-deferred.
Betterment Tax Coordinated Portfolio

Betterment offers this feature, which optimizes and automates an investment strategy known as asset location.
This strategy involves placing highly taxable investments in tax-sheltered retirement accounts and then placing lower tax assets in the taxable accounts.
You can take advantage of this option only by clicking “Set Up” in the Summary tab.
Betterment holds that an average of 0.48 percent per year, or an additional 15 percent over 30 years, can improve your after-tax returns.

Betterment Everyday

Betterment Everyday is an FDIC( Federal Deposit Insurance Corporation)-insured savings account with a high-interest rate of up to $1,000,000 (2.39 percent APY as of 13 August).
Your funds have been put with their four partner banks, which is why you get four times the FDIC coverage, but have managed it all through their app.
It is just a savings account at the moment, but they plan to release a checking account product later in the year.
Betterment Plus and Betterment Premium
Betterment Plus – You can upgrade Betterment Plus plan with a balance of $100,000 or more.
This will allow you to consult with one of Betterment’s Certified Financial Planners (CFPs) team on an annual basis and they will keep tabs on your account and will notify you if and when a consultation needed throughout the year.
This will enable you to have a second pair of eyes to help you with your investment plans and to make critical financial decisions, and they will look at not only your Betterment account but also any other accounts that you have synced with Betterment.
Betterment Premium – Better Premium requires you to have a minimum balance of $100,000 and allows you to have more than one consultation per year. And you’ll have unlimited access to one of the CFP teams from Betterment. They’re going to monitor your account and be available whenever you have a financial question.
Betterment Pricing & Fees

The standard Digital fee is 0.25% of your account balance, and you can have up to $100,000 account managed with Betterment for $250 per year. Even at the lowest service tier, you get all the benefits of a Betterment rebalancing, tax harvesting, diversification, etc.
Betterment Premium account -For a minimum balance of $100,000, the annual fee is 0.40% $100,000 funded account managed by Betterment for a mere $400 per year.
Recently, Betterment adjusted its fee structure. This is the fee on balances over $2 million:
- Digital fee: 0.15% on balances over $2 million
- Premium fee: 0.30% on balances over $2 million
IS BETTERMENT SCAM OR LEGIT?
Betterment is not a scam. It is a legit financial Robo-advisor that helps manages your wealth and investments through its innovative platform. Even If you’re new and have little in assets or prefer a professional help but don’t want to pay through Betterment is the right solution.
Pros:

- Low fees
- Tax-loss harvesting
- Low minimum ($0)
- Low cost plus/premium product
Cons:

- High net worth individuals can do this themselves in Vanguard
- No other asset types
IS THERE SOMETHING BETTER?
Betterment is a good company for the long term investor that has the skills and knowledge on how to invest.
The downside of this program is that it is not for those who do not seek for the long term investment because if you want to invest you have to know how it works and it is not quick-easy-money because you have to wait for months to get results and have your money back.
If you are looking to invest something where you can roll your money and make some side income, it would be best if you start making some money by starting your own business first.
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If you have any question or thought as to whether Betterment is a scam, feel free to leave a comment below and I will always reply!
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