Finding the best investment platform is not an easy task and you have to consider a lot of things before deciding to open an account and let them manage your portfolio. In today Betterment vs Personal Capital article, we are going to give you information about these two similar yet different items regarding how they work and if there is any, how they differ from each other. If one or both of them took your interest, go check our article below.
In this article, we are going to give you information about:
– What are Betterment and Personal Capital
– How Betterment and Personal Capital Work
– Betterment vs Personal Capital
One of the best investment platform you can try now is Betterment. This company offer you a service of maintaining your portfolio utilizing their robo-advisor, so it is perfect for those who want to start investing without having to deal with all the complicated works. They already managing more than 175000 customers and has more than 11 billion assets under their management as August 2018. Since it is a hands-off investment platform, you can’t select individual funds or add individual stocks to your portfolio.
Investing with Betterment
The platform will determine your time, horizon, goals and risk tolerance then build a portfolio that will benefit you and works in those parameters. They also manage it on an ongoing basis and rebalance it to ensure it remains consistent with the original design, so what you need to do is only fund your account in a regular basis. Betterment uses 13 ETFs to cover both stock and bonds in both domestic and international markets. Read also: Betterment vs Robinhood here.
6 of them represent the stock portion of your portfolio while the 7 rest is for the bond portion. The bond funds will provide capital preservation while the stock funds represent investment growth. To use their service, you have to pay 0.25% of your balance per year while the Premium account will charge 0.40%. They also require no minimum balance.
About Personal Capital
Another investment platform you can opt to now is Personal Capital. This robo-advisor is also very popular to be a cheaper alternatives for a human advisors. The company service offer you both robo-advisor algorithm and human advisors and if you have more than $200k in your account, you can even get two dedicated financial advisors and those below the amount will get an access to team of advisors. To use their service, you need to pay 0.89% of your balance per year but those above $1 million will get a discount.
Investing with Personal Capital
Just like its difference in service, Personal Capital also separate their clients with $100-$200k in assets with higher accounts. The lower are invested in a portfolio of exchange-traded funds, which carry a weighted average expense ratio at 0.08% while the higher accounts will be invested in a customized portfolio to cover individual securities through a process they call Smart Indexing that claims to reduce risk while increasing returns. This process will equally invests in all sectors unlike the S&P 500 that mimicking an index.
Besides the managed account service, they also offer a free tool of financial and investment planning. You can use it for your existing accounts and track spending, portfolio performance, net worth, retirement progress and fees.
Now, let’s compare Betterment with Personal Capital. When comparing their service, we know they works quite similar but Personal Capital divided their service between those below and higher than $200k. In fee, Betterment is more affordable with a flat 0.25% per year while the other is at 0.89%. Betterment also doesn’t require any minimum deposit but Personal Capital will require at least $25.000.
Betterment vs Personal Capital
|- 0.25% annual fee||- 0.89% annual fee|
|- No minimum deposit||- $25.000 minimum deposit|
|- Same treatment for investors||- Divided investors depend on the balance|
All in all, the decision is all yours to make. In our opinion, both of them are good choice and you can pick whichever suit your preference. However, if we are to pick we will recommend you Betterment with no minimum deposit and cheaper annual fee.