SoFi Automated Investing Review 2023: Pros, Cons and How It Compares
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Our Take
4.9
Reviewed in: Oct. 2022
Period considered: Aug. - Oct. 2022
The bottom line:
on SoFi Invest's website
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Pros & Cons
Pros
Broad range of low-cost investments.
Free management.
Automatic rebalancing.
Customer support.
Access to certified financial planners.
Cons
Limited account types.
No tax-loss harvesting.
Compare to Similar Brokers
Fees 0% management fee | Fees 0.25% management fee | Fees 0.25% with a balance over $20K or qualifying recurring deposit. Otherwise, $4/month. |
Account minimum $0 | Account minimum $500 | Account minimum $0 $10 to start |
Promotion Free career counseling plus loan discounts with qualifying deposit | Promotion Get $50 customer bonus when you fund your first taxable Investment Account | Promotion None no promotion available at this time |
AD Paid non-client promotion | AD Paid non-client promotion | AD Paid non-client promotion |
NerdWallet doesn’t invest its money with this provider, but they are our referral partner – so we get paid only if you click through and take a qualifying action (such as open an account with or provide your contact information to the provider). Most importantly, our reviews and ratings are objective and are never impacted by our partnerships. Our opinions are our own. Here is a list of our partners and here’s how we make money.
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Full Review
Where Sofi Automated Investing shines
Management and administrative fees: Since 2018, SoFi Automated Investing (formerly known as SoFi Wealth) has charged no management fees. It also charges no advisory or administrative fees.
Broad range of low-cost investments: SoFi clients have a choice of 10 portfolios using a diversified selection of low-cost ETFs.
CFP access: SoFi’s service includes unlimited access to a team of certified financial planners.
Where SoFi Automated Investing falls short
No tax-loss harvesting: SoFi does not offer tax-loss harvesting, a service offered by many of its competitors that can reduce taxes owed on investment gains.
Limited track record: SoFi started up its robo-advisor platform in 2017, so it’s among the newer kids on the block. That may give some investors pause, especially when larger players, such as Wealthfront and Betterment, have established track records.
SoFi Automated Investing is best for:
Beginning and younger investors.
Hands-off investors.
Investors who need financial planning guidance.
Cost-conscious investors.
Users with low balances.
SoFi Automated Investing at a glance
Reviewed: Oct. 2022
Period considered: Aug. - Oct. 2022
Account minimum | $1. |
Account management fee | $0. |
Investment expense ratios | Portfolio expense ratios average 0.03%. |
Account fees (annual, transfer, closing) | $75 full outgoing transfer fee. |
Portfolio mix | ETFs from 12 asset classes; choice of 10 strategies with allocations representing different risk levels for taxable and tax-deferred accounts. |
Socially responsible portfolio options | None. |
Accounts supported |
|
Tax strategy | Tax portfolios have exposure to municipal bonds. |
Automatic rebalancing | Portfolios are automatically rebalanced if there's a 5% drift for any security. |
Human advisor option | Free, unlimited access to certified financial planners. |
Savings account/cash management account | Members have access to SoFi checking and savings account, which has an APY of 2.50% for direct deposit members. |
Customer support options (includes how easy it is to find key details on the website) | Customer support is available by chat and phone Monday through Thursday 5 a.m. to 7 p.m. Pacific; Friday through Sunday 5 a.m. to 5 p.m. Pacific. |
More details about SoFi Automated Investing's ratings
Account minimum: 5 stars
Some robo-advisors have steep account minimums. This can be a disadvantage for those who want to open accounts with relatively small amounts. SoFi Automated Investing is an accessible robo-advisor with a $1 account minimum.
Account management fee: 5 stars
SoFi Automated Investing charges no management fees. By comparison, major robo-advisors such as Wealthfront and Betterment charge 0.25% annually.
Investment expense ratios: 5 stars
An expense ratio is an annual fee charged by mutual funds, index funds and ETFs. The fee is a percentage of your total investment, so high expense ratios can eat away at your returns. SoFi Automated Investing has expense ratios averaging 0.03%, competitive with some of the cheapest robo-advisors out there, including those from Vanguard Digital Advisor and TD Ameritrade Essential Portfolios.
Account fees: 3 stars
SoFi charges a $75 full outgoing transfer fee. SoFi Automated Investing does not support wire transfers.
Portfolio mix: 4 stars
SoFi clients have a choice of 10 portfolios based on risk tolerance and investment objectives, using a diversified selection of low-cost ETFs that give exposure to U.S. stocks, developed international stocks and emerging markets, as well as high-yield and Treasury bonds.
Socially responsible portfolio options: 1 star
For some investors, being able to choose socially responsible investments is a top priority. SoFi doesn’t provide an option for socially responsible investing, which may be considered a drawback for some.
Accounts supported: 3 stars
SoFi Automated Investing supports joint non-retirement accounts, Keogh plans, Roth, traditional, rollover and SEP IRAs.
Tax strategy: 2 stars
SoFi does not offer tax-loss harvesting, an investment strategy that can significantly reduce capital gains taxes. In taxable accounts, the practice involves selling losing investments to offset the gains from winners. It’s available among many of SoFi's competitors.
Automatic rebalancing: 5 stars
As with some of the most popular robo-advisors, SoFi Automated Investing provides 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 5 percentage points off-target and, if so, will adjust the portfolio back to the target.
Human advisor option: 5 stars
SoFi stands out here. All clients have unlimited access to the company's financial advisors at no extra charge. These advisors are CFPs with the Series 65 designation (or similar), which holds them to a fiduciary standard that binds them to operate in your best interest. They’re also noncommissioned advisors, meaning they don't make money off of specific trades or actions they recommend.
On top of this, advisors are available at a range of hours and through various contact methods. You can schedule a phone or video appointment between the hours of 7:30 a.m. and 6:30 p.m. Eastern time Monday through Thursday, and 7:30 a.m. to 3:30 p.m. Eastern time on Fridays. This is a great advantage for newer investors or those looking to access certified financial planners.
Savings account/cash management options: 3 stars
In 2022, SoFi launched a new bank, so customers now have access to checking and savings accounts. The accounts pay up to 2.50% APY as of Oct. 24, 2022, for direct deposit members and carry up to $1.5 million in FDIC coverage. Other features of the online bank include no account fees, which include overdraft, minimum balance, and monthly fees. Customers can also take their paycheck up to two days early and get up to 15% back when they use their SoFi debit card at local establishments.
Customer support options: 4 stars
Customer support for technical issues is available via phone, social media, and chat 5 a.m. to 7 p.m. Monday through Thursday and 5 a.m. to 5 p.m. Pacific time Friday through Sunday.
Other features you should know
SoFi offers goal planning to help you save for retirement, a down payment on a home, college or something else. The robo also offers bonuses to all members and there is no monthly minimum to be a member. Members can receive complimentary career coaching as well as members-only events such as 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.
Is SoFi Automated Investing right for you?
The lender SoFi is a relative newcomer to the robo-advisor industry, but in many respects competes — and even beats — top players. SoFi’s free management is attractive compared with other robo-advisors that charge a management fee of 0.25% or more. But it's especially enticing relative to competitors who charge significantly more and offer similar unlimited access to advisors, such as Betterment Premium (0.40%).
With a broad range of low-cost ETFs, SoFi provides strong 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 its career coaching and interest discounts on student loans.
How do we review robo-advisors?
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. robo-advisors. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across 16 factors. The final output produces star ratings from poor (one star) to excellent (five stars).
For more details about the categories considered when rating robo-advisors and our process, read our full methodology.
on SoFi Invest's website
