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SoFi Wealth Review 2018

May 9, 2018
Advisors, Investing
sofi-wealth-review
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The lender SoFi has joined the ranks of robo-advisors with an offering that in many respects competes with the top players. SoFi Wealth is great for beginners, offering low-cost funds, a competitive advisory fee, no administrative fees, a very low account minimum and extensive access to its team of certified financial planners and advisors who are held to a fiduciary standard. But the company also offers bonuses — think complimentary career coaching and live events — that make it additionally appealing to younger investors. With all these benefits, SoFi is hard to beat.


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Quick facts

  • Management fee: 0.25% on balances over $10,000
  • Account minimum: $100 one time (or a recurring $20 deposit)
  • Promotion: Management fee waived in 2018
Get started on SoFi Wealth's secure site

SoFi Wealth is best for:

  • Beginning and younger investors
  • Hands-off investors
  • Those who need financial planning
  • Cost-conscious investors
  • Users with low balances

SoFi Wealth at a glance

CategoryDescription
Overall


Account minimum

$100 one time to open, or a $20 recurring deposit
Account management fee

0.25% on balances over $10,000
Investment expense ratios

ETF expense ratios have a weighted average of 0.11%
Account fees (annual, transfer, closing)

None
Portfolio mix

ETFs from more than 20 asset classes
Accounts supported

  • Individual and joint non-retirement accounts
  • Roth, traditional, SEP and rollover IRAs
Tax strategy

Will launch tax-loss harvesting in August 2018 at no cost to investors
Automatic rebalancing

Free on all accounts
Customer support options

Phone support Monday-Thursday 7 a.m. to midnight Eastern; Friday-Sunday 7 a.m. to 8 p.m. Eastern
Promotion

Management fees waived for the rest of 2018

Where SoFi Wealth shines

Management and administrative fees: SoFi keeps its fees low, and that’s especially good if you’re just beginning. The robo-advisor charges 0.25% annually on balances over $10,000. That’s in line with major players such as Wealthfront and Betterment as well as more recent upstarts such as Ellevest. Even better, for the rest of 2018, SoFi is charging no management fee.

And it won’t cost you a dime to get started. SoFi charges no administrative fees, not even for closing an account, making it very investor-friendly. In fact, the company might help you pay the transfer fees that some other robo rivals charge when you leave them.

As with some of the most popular robo-advisors, this management fee also includes automatic rebalancing. Every time money enters or leaves your account (for example, a deposit), SoFi checks your portfolio against the target allocation and rebalances it as close as possible. In addition, the advisor monitors your portfolio daily to see if it’s more than five percentage points off-target and, if so, will adjust the portfolio back to the target.

Broad range of low-cost investments: SoFi builds its clients’ portfolios from a range of exchange-traded funds, or ETFs, tracking more than 20 indexes, based on the client’s risk tolerance and investment objectives. This is one of the widest offerings among robo-advisors, on par with Ellevest. SoFi’s ETFs include exposure to U.S. stocks, international stocks, real estate, high-yield and Treasury bonds, as well as to specific countries and regions.

And those ETFs are great for cost-conscious investors. The typical portfolio has a weighted average cost of 0.11%, just a bit higher than some of the cheapest robo-advisors out there, including Wealthfront, E-Trade Core Portfolios and Ally Invest Managed Portfolios.

Financial planning: SoFi Wealth stands out here. All SoFi clients have unlimited access to the company’s financial advisors at no extra charge. These advisors are certified financial planners with the Series 65 designation (or similar), holding them to a fiduciary standard and binding them to operate in your best interest. They’re also noncommissioned advisors, meaning they don’t make money off of specific trades and actions they recommend.

On top of this, advisors are available at a great range of hours and modes. You can schedule an appointment — chat, voice or video — Monday through Friday, 10:30 a.m. to 11 p.m. Eastern time. SoFi offers some weekend meetings as well. This is a great advantage for newer investors or those looking to access certified professionals.

Customer support: Customer support for more technical issues picks up the same theme as the advisors — an extensive range of hours — and is great for beginners. They’re available Monday through Thursday, 7 a.m. to midnight Eastern; and Friday through Sunday, 7 a.m. to 8 p.m. Eastern.

Special bonuses: SoFi offers bonuses to clients who invest at least $20 per month. These “members” can receive complimentary career coaching as well as members-only events like dinners and talks. They’re also eligible for reduced interest rates on SoFi loans. If you already have your student loans or a mortgage with SoFi, or are planning on taking out a loan, extending your relationship with the company could be worth something extra to you.

Where SoFi Wealth falls short

Tax-loss harvesting: SoFi plans to introduce tax-loss harvesting in August 2018. That’s not optimal if you’ve been a client, but it’s less of an issue for prospective clients. Tax-loss harvesting will be provided at no extra charge to clients and rounds out SoFi’s robo offering.

Limited accounts: Want to hold a 529 saving plan or a 401(k) at SoFi Wealth? Tough. The robo-advisor supports only taxable accounts (joint and individual) and IRAs (Roth, traditional, SEP and rollover). The company plans to offer more account types in the future but has not revealed a timetable for the upgrades.

Limited track record: SoFi started up its robo-advisor in 2017, so it’s among the newest kids on the block. That may give some investors pause, especially when larger players such as Wealthfront and Betterment have established track records.

Is SoFi Wealth right for you?

With a broad range of low-cost ETFs and a competitively priced management fee, SoFi is providing some great features for cost-conscious investors, especially those just starting out. These beginners are also more likely to find value in SoFi’s member bonuses, particularly career coaching or even the interest-rate reduction to work down those student loans even faster.

And all investors should find the access to certified financial planners appealing, not least because they’re held to a fiduciary standard. With this feature, SoFi’s management fee (0.25%) looks especially attractive relative to other players providing unlimited access to advisors in the premium-service tiers, namely Ellevest (0.5%) and Betterment (0.4%).

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