Six Months With Betterment

betterment, investing

I started using Betterment about six months ago to manage my investments. Shortly after joining, I wrote a blog post giving a brief overview of what it is and how I had started using it.

Six months later, I’m happy to report that I’m still enthusiastic with Betterment’s service. I’d recommend it to anyone, especially anyone who is just getting started with investing.

A few notes: First, I haven’t used auto-deposits nearly as much intended. I’ve spent most of my time consulting, so my paycheck varied significantly pay period to pay period. As such, I’ve kept a single $100/pay period auto deposit into my Roth IRA to ensure that I meet Betterment’s contribution requirements 1, but have otherwise managed my deposits by hand.

Second, I wish there were an auto-deposit-to-rebalance feature. As far as I can tell, Betterment removed the option to prevent your portfolio from automatically rebalancing. You can still avoid the tax implications of rebalancing by making deposits to rebalance, but I’d really like to put that on autopilot. It’s rather annoying to feel the need to check in every time the market makes a major move to make sure your portfolio isn’t going to rebalance.

Third, I wish that dividend reinvestment was more frequent. I understand that most of the funds only pay out their dividends once per month, but the feeling of getting that alert email - even if it is only for eleven cents - is fantastic. Perhaps when my accounts are larger, they’ll be more frequent.

Finally, I really wish Betterment offered 401(k) plans. For Quottly, we’re offering 401(k) plans through ForUsAll, and we’re more than happy with them - but this seems like a great place for Betterment to possibly expand to.

The net: I’d still recommend Betterment to anyone with less than a million or so in assets, without hesitation. I am looking forward to seeing what new features come out over the next six months.

  1. If you have less than $10,000 between all your accounts, you have to auto-deposit - not just deposit - $100/m to be eligible for 0.33% per year pricing, as opposed to $3/month. It’s a great motivator.

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