According to readers, when it comes to robo-advisors, most people care about are the minimum investment requirements, the fees, and whether or not the service offers support for 401(k) plans. In this article, we will look at how Fidelity Go and Betterment stack up against each other when it comes to these features.
At $0 minimum investment, Betterment does not require any minimum deposit. Betterment will be a good starting point for beginner investors. The robo-advisor requires no minimum deposit and costs only 0.25% annually.
If you will need some assistance, it recently introduced human advisors who can offer assistance with your retirement account. It is worth noting that the asset allocation of Betterment excludes commodities or REITs.
Betterment has turned out to be a clear leader among other robo-advisors, with approximately 300,000 customers and more than $11 billion in assets under management today.
Betterment has two service options that are available:
- Betterment Digital is its legacy offering. It has no account minimum balance and charges only 0.25% of assets under management yearly. Customers in this offering can consult various financial advisors through in-app messaging with messages answered within 24 hours.
- Betterment Premium allows unlimited phone access and emails to financial advisors in exchange for a fee of 0.40% and requires a $100,000 account minimum.
Fidelity Go is the entry of Fidelity into the robo-advisor industry. The pricing of Fidelity Go is very transparent, and once you have an existing account, it might be a service that will be best for your one-stop shopping. However, the service does not have some of the features that are offered by some of the more established robo-advisors.
Just like most robo-advisors, Fidelity Go does not charge transaction fees, rebalancing fees, or trading commissions. Where the company differs from some companies is that you would not be charged with higher fees when you have larger balances.
The gross advisory fee that is charged is only 0.35%, regardless of what the amount of your balance is. Other companies will charge a higher fee as the balance of your account reaches certain thresholds (e.g. $100,000). However, with Fidelity Go the fee will remain unchanged.
Fidelity Go has only one plan no matter what the amount of your investment is. Other companies, on the other hand, add some features as you move up the tiers. You receive the same service as $5,000 as you would when you reach $250,000.
In addition to the fee of 0.35%, you will be required to pay SEC fees and minimal fund expenses, which Fidelity Go estimates will bring the fees to a total of 0.40%. The additional 0.05% is intended for the mandatory SEC charges and some fund expenses.
The company says that it concentrates on low-cost funds for investments, that means that when your money is being invested in exchange-traded funds (ETFs) and mutual funds, it will be those that have low fees. This is a benefit that a consumer will enjoy as some mutual funds charge fees that eat into any interest that you may gain on the investment.
First, let us look at the fees that are charged by these two investment advisors. Cost will be broken down into both the annual management fee that are charged every year as well as the expense ratios that are charged by the ETF holdings themselves.
Betterment charges annual fees amounting to 0.25% fee every year. On the other hand, Fidelity Go charges annual fees amounting to 0.35%. When it comes to the fees charged, Betterment is the cheaper option.
When it comes to support for 401(k) plans, there is a clear line of division between the two apps. While Betterment does offer support for 401(k) plans, Fidelity Go does not. If you are someone who would want help on your employee-sponsored retirement account, Betterment will be the better option for you.
Looking at both of these robo-advisors, we can also explore the features that they offer. While Betterment offers tax-loss harvesting, Fidelity Go does not. For running predictions on the retirement of users, clients will want to make use of a retirement calculator.
Betterment lets you have access to an advanced retirement calculator while Fidelity Go does not do so. Tracking your personal financial goals can also be important, and the good news is that both Betterment and Fidelity Go offer goal tracking.
The ability to aggregate and import third-party financial accounts for holistic analysis can be useful, and fortunately, both Betterment and Fidelity Go offer external accounts analysis.
Lastly, the tech-savvy millennials may consider it valuable to have access to customer service via email, live chat, and phone. Luckily, Betterment and Fidelity Go do offer live chat support.
Listed below are the comparisons of the fees that are charged by Betterment and Fidelity Go.
|Minimum Deposit||$ 0||$ 5,000|
|Annual Fee – $5,000 (excluding individual fund fee)||0.25%||0.35%|
|Annual Fee – $25,000 (excluding individual fund fee)||0.25%||0.35%|
|Annual Fee – $50,000 (excluding individual fund fee)||0.25%||0.35%|
|Annual Fee – $100,000 (excluding individual fund fee)||0.25%||0.35%|
|Annual Fee – 1,000,000 (excluding individual fund fee)||0.25%||0.35%|
|Total AuM (Assets Under Management)||$11.8 Billion||Not Applicable|
|Average Funds Expense Ratio – Conservative (The average annual portfolio expense ratio charged for a conservative designated portfolio)||0.17%||Not Applicable|
|Average Funds Expense Ratio – Moderate (The average annual portfolio expense ratio charged for a moderate designated portfolio)||0.13%||Not Applicable|
|Average Funds Expense Ratio – Aggressive (The average annual portfolio expense ratio charged for an aggressive designated portfolio)||0.10%||Not Applicable|
Listed below are the comparisons of the services that are offered by Betterment and Fidelity Go.
|Accounts Offered||Taxable, Joint, Roth IRA, Traditional IRA, Rollover IRA, SEP IRA, Trusts, Non-Profit||Taxable, Joint, Roth IRA, Traditional IRA, Rollover IRA|
|Tax-Loss Harvesting||Tax-loss harvesting is offerred as an additional benefit.||Not Applicable|
|Automatic Deposits||Weekly, Biweekly and Monthly||Monthly|
|529 Plans||Clients can open a 529 college savings plan||Not Applicable|
|Clearing Agency||Apex Clearing||National Financial Services, LLC|
|CFP Access||Clients have access to Certified Financial Planner (CFP) professionals to assist with portfolio decisions.||Not Applicable.|
|Phone Support||Offers phone support.||Offers phone support.|
|Email Support||Offers email support.||Offers email support.|
|Live Chat Support||Offers live chat support.||Offers live chat support.|
|Access||Website, iOS App, Android App||Website, iOS App, Android App|
|Two-Factor Authentication||Requires two-factor authentication||Requires two-factor authentication|
|Customer Service||a. Phone: Monday to Thursday 9 am -8 pm, Friday 9 am to 6 pm ET;
b. Live Chat: Monday to Thursday 9 am to 8 pm, Friday 9 am to 6 pm ET, Saturday to Sunday 11 am to 6 pm;
|a. Phone: Monday to Friday 8 am to 8 pm ET;
b. Live Chat: Monday to Friday 8 am to 8 pm ET
Listed below are the comparisons of the tools used by Betterment and Fidelity Go.
|Goal Tracker – Basic||A basic goal tracker is provided to assist with retirement planning.||A basic goal tracker is provided to assist with retirement planning.|
|Goal Tracker – Advanced||With the use of an advanced goal tracker, clients are able to view automated savings recommendations and modify other variables to assess the results to their goal success probability.||Not applicable|
|External Accounts Analysis||Links an external portfolio and analyze the positions as well as the current fees being paid.||Links an external portfolio and analyze the positions as well as the current fees being paid.|
|Market Research Reports||Not applicable||Not applicable|
|iPhone App||Offers a downloadable iPhone app via the iOS app store.||Offers a downloadable iPhone app via the iOS app store.|
|Android App||Offers a downloadable iPhone app via the Google Play store.||Offers a downloadable iPhone app via the Google Play store.|
Betterment is best for hands-off investors, retirement investors, users with low balances, users who want automatic rebalancing, and users who like goal-based tools.
However, if you are already a Fidelity customer in another capacity, you may want to check out Fidelity Go. The site offers account linking to existing accounts for the customers of Fidelity. Using the digital “robo-advisor” function for your investment accounts can help you in saving fees that are charged by active management.
However, you must remember that this company does not offer tax-loss harvesting on taxable accounts. But if that is not something that you are concerned of, or you’re planning on opening an IRA which is considered tax-advantaged, you may be more interested.
While Fidelity Go could be a solid choice because of its basic but reasonable fees and offerings, most potential investors could be better served elsewhere where more choices are available. Fidelity Go is an OK choice for retirement management. However, the fees are slightly higher compared to its competitors.
On the other hand, Betterment is considered as the largest independent robo-advisor, and the rate at which it has been able to attract assets and clients is very impressive. The goal-oriented tools and features of Betterment should appeal to retirement investors, and the human advice offering is not as expensive compared with other independent hybrid advisors like Personal Capital.