SoFi Automated Investing Review 2021: Pros, Cons and How It Compares

SoFi Automated Investing's range of low-cost ETFs and free management make it an attractive option for cost-conscious investors.

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.


The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks or securities.

Our Take

5.0

NerdWallet rating 

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.

SoFi Automated Investing

on SoFi Invest's website

on SoFi Invest's website

Fees

0%

management fee

Account Minimum

$0

Promotion

Free

career counseling plus loan discounts with qualifying deposit

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

SoFi Automated Investing
Vanguard Digital Advisor
Betterment
NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Fees

0%

management fee

Fees

0.15%

per year (approximately)

Fees

0.25%

management fee

Account Minimum

$0

Account Minimum

$0

Account Minimum

$0

Promotion

Free

career counseling plus loan discounts with qualifying deposit

Promotion

No advisory fees

your first 90 days of Vanguard Digital Advisor investment management (Enrollment requires a Vanguard account with a minimum of $3,000)

Promotion

Up to 1 year

of free management with a qualifying deposit

Get more smart money moves — straight to your inbox

Become a NerdWallet member, and we’ll send you tailored articles we think you’ll love.

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

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 0.05%, 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

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 or ATM fees if you use ATMs within its network .

Customer support options: 4 stars

Customer support for technical issues is available via phone, social media, email and chat Monday through Thursday 5 a.m. to 7 p.m. and Friday through Sunday 5 a.m. to 5 p.m. Pacific time.

Other features you should know 

SoFi 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 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 first-hand 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.

RATING FACTORS

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%.

FACTOR WEIGHTINGS

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.

INFORMATION UPDATES

Writers and editors conduct our broker reviews on an annual basis but continually make updates throughout the year. We maintain frequent contact with providers and highlight any changes in offerings.

THE REVIEW TEAM

The review team comprises seasoned writers, researchers and editors who cover stocks, bonds, mutual funds, index funds, exchange-traded funds, alternative investments, socially responsible investing, financial advisors, retirement and investment strategy on a daily basis. In addition to NerdWallet, the work of our team members has been published in The New York Times, The Washington Post, Forbes, USA Today, Bloomberg News, Nasdaq, MSN, MarketWatch, Yahoo! Finance and other national and regional media outlets.

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.

CONFLICTS OF INTEREST

While NerdWallet does have partnerships with many of the reviewed providers, we manage potential conflicts of interest by maintaining a wall between our content and business operations. This wall is designed to prevent our writers and the review process from being influenced or impacted by our business partnerships. This way, all reviews can provide an unbiased review that serves the interests of our users. For more information, see NerdWallet’s editorial guidelines.

on SoFi Invest's website