The bottom line: Free management and access to financial advisors and career counselors make SoFi Automated Investing ideal for beginning and younger investors, though the lack of a track record may give some potential customers pause.
Pros & Cons
- Broad range of low-cost investments.
- Free management.
- Automatic rebalancing.
- Customer support.
- Access to certified financial planners.
- Limited account types.
- No tax-loss harvesting.
Compare to Similar Brokers
per year (approximately)
career counseling plus loan discounts with qualifying deposit
No advisory fees
your first 90 days of Vanguard Digital Advisor investment management (Enrollment requires a Vanguard account with a minimum of $3,000)
Up to 1 year
of free management with a qualifying deposit
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The lender SoFi is a relative newcomer to the robo-advisor industry, but in many respects competes — and even beats — top players. SoFi Automated Investing (formerly known as SoFi Wealth) charges no advisory or administrative fees and offers access to low-cost exchange-traded funds. The service includes unlimited access to a team of certified financial planners and complimentary career coaching.
SoFi Automated Investing is best for:
Beginning and younger investors.
Investors who need financial planning guidance.
Users with low balances.
SoFi Automated Investing at a glance
Account management fee
Investment expense ratios
Portfolio expense ratios average 0.05%
Account fees (annual, transfer, closing)
$75 full outgoing transfer fee.
ETFs from 13 asset classes; choice of 10 strategies with allocations representing different risk levels for taxable and tax-deferred accounts.
Socially responsible portfolio options
Tax portfolios have exposure to municipal bonds.
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
SoFi Money is a cash management account with a competitive interest rate.
Customer support options (includes website transparency)
Email, chat and phone support Monday - Thursday 8 a.m. to 8 p.m. Eastern; Friday 8 a.m. to 7 p.m. Eastern.
Where SoFi Automated Investing shines
Management and administrative fees: Since 2018, SoFi has charged no management fees. By comparison, major robo-advisors such as Wealthfront and Betterment charge 0.25% annually. SoFi Automated Investing charges $75 for closing an account.
Broad range of low-cost investments: 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.
The cost of portfolios averages 0.05%, competitive with some of the cheapest robo-advisor portfolios out there, including those from Vanguard Digital Advisor and TD Ameritrade Essential Portfolios.
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 five percentage points off-target and, if so, will adjust the portfolio back to the target.
Financial planning: 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 professionals.
Customer support for more technical issues is also available during an extended range of hours: Monday through Thursday from 8 a.m. to 8 p.m. Eastern time; Friday from 8 a.m. to 7 p.m. Eastern time.
High-interest savings: Like competitors Wealthfront and Betterment, SoFi offers a high-interest savings account. SoFi Money functions like a checking and savings account that pays 0.25% interest annually and carries up to $1.5 million in FDIC coverage, six times more insurance than the average bank account. SoFi Money also charges no account fees and offers unlimited reimbursement for ATM fees each month.
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 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.
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.
Is SoFi Automated Investing right for you?
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.
Key terms in this review
SoFi is a robo-advisor, also known as an automated investing service or online advisor. Robo-advisors use computer algorithms and advanced software to build and manage your investment portfolio, and are much cheaper than an in-person human financial advisor.
A CFP is a certified financial planner, a type of financial advisor who possesses one of the most rigorous certifications for financial-planning knowledge and adheres to a strict ethical standard. Most robos ask you to pay more, or have a certain amount of money invested, to get CFP access. SoFi’s service includes unlimited access to a team of certified financial planners (plus career coaching) at no cost. However, if you have complex financial needs, or want one-on-one help, this team approach might not be right for you — you might be better off with a service that offers direct access to a dedicated financial advisor, such as Facet Wealth or Personal Capital.
Tax-loss harvesting is 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 widely available among other robo-advisors, often for free, but SoFi does not offer it.
An expense ratio is an annual fee charged by mutual funds, index funds and ETFs, as a percentage of your investment in the fund. If you invest in a mutual fund with a 1% expense ratio for example, you’ll pay the fund $10 per year for every $1,000 invested. If high, these fees can significantly drag down your portfolio returns, but the expense ratios of the funds used in SoFI’s portfolios are some of the lowest among robo-advisors.
Automatic rebalancing is regular rebalancing of your portfolio in response to market fluctuations or other factors that shift your portfolio out of its intended investment allocation. The market moves and over time, your allocation will move, too. So if your target was having 60% in stocks and 40% in bonds and stocks are doing well, you could end up having 70% in stocks, which may be more risk than you are comfortable with. With automatic rebalancing, the computer monitors your allocation and will automatically adjust your investment if it gets out of line. SoFi offers this service.
How do we review robo-advisors? Here’s our methodology.
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers by assets under management, along with emerging industry players, using a multifaceted and iterative approach. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgments on which ones will best meet your needs.
DATA COLLECTION AND REVIEW PROCESS
We collect data directly from providers, and conduct firsthand testing and observation through provider demonstrations. Our process starts by sending detailed questionnaires to providers to complete. The questionnaires are structured to equally elicit both favorable and unfavorable responses from providers. They are not designed or prepared to produce any predetermined results. The questionnaire answers, combined with product 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 more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.
Evaluations vary by provider type, but in each case are based upon the weighted averages of factors that include but are not limited to: advisory and account fees, account minimums and types, investment selection, investment expense ratios, trading costs, access to human financial advisors, educational resources and tools, rebalancing and tax minimization options, and customer support including branch access, user-facing technology and mobile platforms.
Each factor can involve evaluating various sub-factors. For instance, when gauging the investment selections offered by robo-advisors, 80% of the score is based on the potential for diversification (how well-diversified a resulting portfolio of investments could be) combined with the availability of specialty portfolios and level of customization for investors. Expense ratios form an additional 10% of the score, and low or no management fee the remaining 10%.
The weighting of each factor is based on our team’s assessment of which features are the most important to consumers and which ones impact the consumer experience in the most meaningful way. The factors considered, and how those factors are weighted, change depending upon the category of providers reviewed.
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The combined expertise of our Investing team is infused into our review process to ensure thoughtful evaluations of provider products and services from the customer perspective. Our writers and editors combine to have more than 70 years of deep experience in finance, ranging from a former Wall Street Journal reporter to a former senior financial advisor at Merrill Lynch.
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