Betterment vs. Vanguard: 2024 Comparison

Arielle O'Shea
By Arielle O'Shea 

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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?

Vanguard has heard that question, of course. That may be one reason why it created its own successful online advisor, Vanguard Personal Advisor, and launched a strictly digital, lower-cost option, Vanguard Digital Advisor, in 2020. So how does Vanguard Personal Advisor compare with Betterment? This Betterment versus Vanguard comparison shakes that all out to help you decide which company is best for you.

For details on each service, read below.

Betterment is best for:

  • Hands-off investors.

  • Retirement investors.

  • Users with low balances.

  • Those who want automatic rebalancing.

  • Users who like goal-based tools.

Betterment at a glance

Reviewed: Oct. 2023

Period considered: Aug. - Oct. 2023

Account minimum

$0 ($10 to start investing).

Account management fee

0.25% annual fee on balances over $20,000 or if you set up recurring monthly deposits totaling $250 or more. Otherwise, $4 per month.

Investment expense ratios

Average expense ratio of 0.05% to 0.24% for Betterment Core Portfolio as of August 2023.

Account fees (annual, transfer, closing)

$75 outbound transfer fee.

Portfolio mix

Core portfolio uses ETFs from 13 asset classes. Portfolio options include: Betterment Core, Goldman Sachs Smart Beta, Blackrock Target Income, Betterment Flexible Portfolio (where clients can adjust the weights of asset classes) and Innovative Technology. Portfolio mix is well-diversified but lacks exposure to non-market correlated assets like real estate investment trusts (REITs) and commodities.

Betterment also offers four cryptocurrency portfolios: Universe, Sustainable, Metaverse and Decentralized Finance.

Socially responsible portfolio options

Three socially responsible investing portfolio options: Broad Impact, Climate Impact, and Social Impact.

Accounts supported

Individual and joint taxable brokerage accounts. Roth, traditional, inherited, rollover and SEP IRAs. Trusts. Ability to link external accounts for better-informed advice (but not direct management).

Tax strategy

Tax-loss harvesting.*

Tax-Coordinated Portfolio (asset location) tool.

Tax Impact Preview tool.

Charitable giving tool.

Automatic rebalancing

Free on all accounts. Rebalancing generally triggered when drift passes 3%, considering tax impact. Also, Betterment uses any cash flow, such as a dividend or deposit, to partially rebalance your portfolio.

Human advisor option

Betterment Digital doesn't offer access to financial advisors. However, for a fee, anyone can buy an advice package that includes a consultation with an advisor, regardless of if they have a Betterment account or not. Prices start at $299.

Savings account/cash management option

Cash Account** with no fees or minimum balance requirements, unlimited transfers and FDIC coverage of up to $2 million in individual accounts or up to $4 million in joint accounts at program banks. Includes a feature that enables customers to save in separate buckets for different goals. Checking account that reimburses ATM fees and foreign fees and has a debit card with cash back. The cash account offers an interest rate of 4.75%. *Current promotional rate; annual percentage yield (variable) is 4.75% as of 7/31/23, plus a .75% boost available as a special offer with qualifying deposit. Terms apply; if the base APY increases or decreases, you’ll get the .75% boost on the updated rate. Cash Reserve is only available to clients of Betterment LLC, which is not a bank; cash transfers to program banks conducted through clients’ brokerage accounts at Betterment Securities.

Customer support options (includes how easy it is to find key details on the website)

Phone support Monday-Friday 9 a.m.-6 p.m. Eastern time. Email support and questions also answered through social media.

Vanguard Personal Advisor is best for

  • Access to financial advisors.

  • Comprehensive financial planning.

  • Larger account balances.

Vanguard Personal Advisor at a glance

Reviewed: Oct. 2023

Period considered: Aug. - Oct. 2023

Account minimum


Account management, planning or subscription fee

0.35% for all-index investment options, or 0.4% if you choose a mix of actively managed and passive index fund strategies.

Other account fees


Setup or onboarding fee


Advisor access and credentials

  • Unlimited appointments over phone, email or videoconference.

  • Most advisors are certified financial planners; all are fiduciaries and compensated with salary instead of commissions.

  • Investors with account balances of $50,000 to $500,000 get a team of advisors; investors with balances of $500,000 or more get a dedicated advisor.

Financial planning services

Can advise and create a custom portfolio for a variety of situations, such as saving for retirement, college or a family vacation home.

Services include: Social Security optimization, dynamic spending, tax efficiency, long-term care and medical costs, high-level guidance on estate planning, charitable giving, Roth conversions and trust services.

Investment expense ratios on portfolios

Average expense ratio is 0.06%.

Portfolio construction

Vanguard PAS creates customizable portfolios on a client-by-client basis. It uses low-cost Vanguard index funds and ETFs, which are diversified with tight tracking. Vanguard PAS also offers three ESG funds (scored on environmental, social and governance factors for sustainable investing).

Brokerage options

Clients must move money to Vanguard but can keep outside investments if there are embedded gains or other reasons to do so.

Accounts supported

  • Individual and joint brokerage accounts.

  • Roth, traditional, rollover, SEP and SIMPLE IRAs.

  • Trusts.

Note: Personal Advisor will consider and provide guidance for other accounts types (e.g. 529s, UGMA, UTMA, non-Vanguard record-kept 401(k)s), but does not directly manage them.

Tax strategy

  • Assets are allocated strategically among taxable and tax-advantaged accounts to optimize for taxes.

  • Customers have access to tax-loss harvesting

  • Tax-exempt municipal bonds used to reduce taxes for taxable accounts.

  • Minimum tax cost basis method minimizes tax impact by identifying select units or quantities (lots) of securities to sell based on ordering rules.

Customer support options (includes how easy it is to find key details on the website)

Customer support is available Monday through Friday, 8 a.m. to 8 p.m. Eastern time. Ability to schedule appointments with an advisor at any time.

» Want to check out other providers? See our top picks for robo-advisors.

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