SoFi Automated Investing Review 2024: Pros, Cons and How It Compares
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Our Take
4.9
Reviewed in: Oct. 2023
Period considered: Aug. - Oct. 2023
The bottom line:
on SoFi Invest's website
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Pros & Cons
Pros
Broad range of low-cost investments.
Free portfolio management.
Access to certified financial planners.
1% match on IRA contributions.
No account minimum.
Cons
Limited account types.
No tax-loss harvesting.
Compare to Similar Brokers
Fees 0% management fee | Fees Varies by Advisor (free initial consultation) | 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 $150,000 | Account minimum $500 | Account minimum $0 $10 to start |
Promotion 1% match on IRA contributions Only offers made via ACH are eligible for the match. ACATs, wires, and rollovers are not included. | Promotion 3-Month Satisfaction Guarantee | Promotion Get a $50 customer bonus when you fund your first taxable investment account | Promotion Get 1% match of your net Roth and traditional IRA contributions until December 30, 2024. Terms apply. |
Learn more on SoFi Invest's website | Learn more on Zoe Financial's website | Learn more on Wealthfront's website | Learn more on Betterment's website |
AD Paid non-client promotion | 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
Who is SoFi Automated Investing best for?
In many respects, SoFi Automated Investing competes with — and even beats — top players in the robo-advisor industry. 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.
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.
SoFi Automated Investing may be 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
In addition to hands-on testing and reviews, we score each robo-advisor against a detailed rubric to see how the provider compares to competitors. We consider features such as costs and fees, diversification options, tax strategies, and customer support.
While SoFi Automated Investing's overall score is 4.9 stars out of 5, it might be worth taking a closer look at how the provider scored on individual features that may be important to you as a user.
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 Individual and joint non-retirement accounts. Roth, traditional, SEP and rollover IRAs. Keogh plans. | |
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 a competitive APY for direct deposit members. | |
Customer support options 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. |
Reviewed: Oct. 2023. Period considered: Aug. - Oct. 2023.
🖥️ How to sign up for SoFi Automated Investing
Some readers may already be familiar with SoFi because of other financial services the company offers, such as loans and banking. To sign up for an automated investment account, you'll need to navigate to the provider's website, create an account if you don't already have one, and then choose the automated investing option.
SoFi Automated Investing supports several types of accounts. You can open:
Individual or joint taxable brokerage accounts.
Keogh plans.
Roth, traditional, rollover, and SEP IRAs.
Those looking for a wider selection of account types, such as 529 plans or the ability to link their 401(k) account, may not find SoFI's current collection satisfactory.
To gauge which type of portfolio might be best for you, SoFi asks how long you plan to invest, what you're investing for, and how comfortable you are with risk in order to suggest an investment strategy. From there, you'll be able to choose portfolios that range from conservative to aggressive (more on this below).
Once your strategy is set, you'll need to fund the account in order to start investing.
💰 How much does SoFi Automated Investing cost?
Some robo-advisors have steep account minimums, which can be a disadvantage for those who want to open accounts but may not want or be able to invest much. With its $1 account minimum, SoFi Automated Investing makes itself accessible to a wide range of investors.
Another bonus is that SoFi charges no management fees. By comparison, major robo-advisors such as Wealthfront and Betterment charge 0.25% annually.
Another cost investors want to examine closely is expense ratios — the 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%, which is competitive with some of the cheapest robo-advisors, including those from Vanguard Digital Advisor.
Other fees and costs: SoFi charges a $75 full outgoing transfer fee, which is relatively standard for robo-advisors.
📈 SoFi Automated Investing portfolio selection
When it comes to investing your account, SoFi clients have a choice of 10 portfolios based on risk tolerance and investment objectives, with 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.
For some investors, being able to choose socially responsible investments is a top priority. However, SoFi doesn’t provide an option for socially responsible investing, which may be considered a drawback for some.
📝 Additional SoFi Automated Investing features
Automatic rebalancing
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
SoFi stands out here. All clients have unlimited access to the company's financial advisors at no extra charge. These advisors are CFPs or pursuing their CFP designation, 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 Monday through Friday 4 a.m to 5 p.m. Pacific time. This is a great advantage for newer investors or those looking to access certified financial planners.
Savings account/cash management options
In 2022, SoFi launched a new bank, so customers now have access to checking and savings accounts. The accounts pay up to 0.50% 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
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.
SoFi Automated Investing: Bottom line
Where it 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 it 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.
What the Nerds think 🤓
June Sham, NerdWallet Investing and Retirement Writer
"With a $1 account minimum, no management fees and low investment expense ratios, SoFi Automated Investing could be a great intro to investing for beginner and younger investors or those who want to keep costs low.
Knowing you can tap an advisor for unlimited help is also a big plus, especially for those who prefer to have their portfolio managed but would rest easier knowing they still have access to CFPs.
There isn’t an option for tax-loss harvesting though, which can help with offsetting capital gains taxes, and is offered by many of SoFi’s competitors. While this might not be a deal-breaker for everyone, more experienced investors might find SoFi less attractive because of this limitation."
How SoFi Automated Investing compares
on SoFi Invest's website
