Most robo-advisors are created to benefit a wide range of people. Some robo-advisors, however, are specialists: they tailor their services toward a specific clientele base. Many people wonder, when does it make sense to go with a niche robo-advisor? Will the general robo-advisor meet my unique needs?
Today, we are comparing the for-everyone robo-advisor, Betterment, with the more specialized, female-focused robo-advisor, Ellevest.
- Betterment vs. Ellevest—Overview
- Betterment vs. Ellevest—Top Features
- Betterment vs. Ellevest—Who Benefits
- Betterment vs. Ellevest—Fees and Minimums
- Betterment vs. Ellevest—Top Features Deep Dive
- Betterment vs. Ellevest—Which is Best? Takeaway
Betterment vs. Ellevest—Overview
Both robo-advisors offer a wealth of services at various price points, making them customizable and accessible to a range of clients. However, these robo-advisors are designed to meet the needs of very different client bases.
What is Betterment?
Betterment has been in business since 2010, and holds a steady third place for assets under management. This places Betterment above all other independently-owned robo-advisors; only Schwab and Vanguard robo-advisors have more AUM.
Betterment is designed to work for any type of investor. Betterment uses a goals-based model for determining portfolio allocations, so it is customizable for young first-time homebuyers and those approaching retirement alike. In addition to helping clients target their goals, Betterment also employs a host of investment strategies, ranging from more “hands-off,” passive investments and actively managed accounts like smart-beta investing and socially responsible portfolios.
What is Ellevest?
Ellevest is a robo-advisor designed for and by women. While people of all gender identities are more than welcome to invest with Ellevest, the robo-advisor is built to “close the gender money gap” that women tend to face. This robo-advisor recognizes the unique financial and career challenges many women encounter: lost time and income due to childbearing and rearing, lower wages than their male counterparts, and an industry that has traditionally been built and maintained for and by men.
In keeping with the idea that women already have enough challenges, Ellevest is designed to make investing simple and thorough. Client goals and risk are assessed along with market forecasting to create diverse and comprehensive portfolios that can be passively or actively managed depending on account type.
Although both Betterment and Ellevest offer financial advisor access, Ellevest also provides career consultants for its clients.
Betterment vs. Ellevest—Top Features
|Overview||Goals-based digital investment manager with access to financial advisors and cash management.||Automated investment management robo-advisor that invests specifically with the needs and challenges of women in mind. Offers financial planners and career consultants.|
|Minimum Investment Amount||No minimum for Betterment Digital. $100,000 minimum for Betterment Premium.||No minimum for Ellevest Digital.|
$50,000 minimum for Ellevest Premium.
$1 million minimum for Ellevest Private Wealth Management.
|Fee Structure||Digital-0.25% AUM up to $2 million; 0.15% fee over $2 million|
Premium-0.40% AUM up to $2 million; 0.30% fee over $2 million.
|Ellevest Digital - 0.25% AUM|
Ellevest Premium 0.50% AUM
|Top Features||Digital and hybrid investment management (with financial advisor access) options. All investors can text with financial advisors. Socially-Responsible Investing, income and smart beta portfolios available. Tax loss harvesting available.||Goals based investing, enabling you to invest in portfolios developed for various goals, such as emergency funds, retirement and home downpayment. Tax-minimization strategy. Premium service provides access to CFPs + career coaches|
|Free Services||Free portfolio review.||Free personalized investment plan and access to financial articles in resource center.|
|Contact & Investing Advice||Phone and email support 7 days per week.||Available by live chat, email or phone, during regular business hours.|
|Investment Funds||Low fee exchange traded funds from diverse asset classes.||21 low-cost, commission-free ETFs primarily from Vanguard. Other fund providers include Barclays, Nuveen, iShares, Charles Schwab and Van Eck.|
|Accounts Available||Single and joint taxable brokerage. Roth, traditional, rollover and SEP IRA. Trust.||Taxable brokerage accounts, Traditional, Roth, & SEP IRAs|
|Promotions||Free account management special promotion.||N/A|
Betterment Top Features
- Smart Beta investment options
- Financial advisors available for all plans
- Diverse investment options, including SRI
- High yield cash management and banking services
Ellevest Top Features
- Female-focused platform
- Financial advisors and career consultants at the Premium level
- Impact investing
- Claims to offer more realistic future projections, including taxes, down markets and more
Betterment vs. Ellevest—Who Benefits
Investors who want to start off slowly with no minimum balance requirement will benefit from both Betterment and Ellevest. Both robo-advisors offer affordable Digital portfolio options to clients regardless of how much money the clients have to invest. This is great news for users who want to try out robo-advisors or may not have much money available for a large up-front deposit.
Women will, of course, benefit most from using Ellevest. The platform is designed to take their needs into consideration as portfolios are generated and managed. However, anyone who wants to tailor their investments to support women-led businesses and communities will also like Ellevest’s impact investing options.
Those who want immediate access to human financial planners will benefit from Betterment. While Ellevest’s Premium plan does include financial advice, Betterment steps it up by allowing all users to text with financial advisors.
Betterment vs. Ellevest—Fees and Minimums
Betterment Fees and Minimums
Betterment offers two portfolio options. At both portfolio levels, Betterment also offers reduced fees for accounts valued over $2 million. LINK Don’t want a full-blown robo-advisor, Betterment has one-on-one financial planning sessions available as well.
- No minimum investment requirement
- 25% AUM
- 15% AUM for accounts valued over $2 million
- $100,000 minimum investment
- 40% AUM
- 30% AUM for accounts valued over $2 million
Betterment Financial Consultations (add on for Betterment Digital clients):
- A la carte financial planning advice
- One-to-one consultations
- Starting at $99
Ellevest Fees and Minimums
Ellevest has three plan options, which are designed for people from beginning investors to millionaires.
- No minimum investment requirement
- 25% AUM
- $50,000 minimum investment
- 50% AUM
Ellevest Private Wealth Management
- $1 million minimum investment
- Fees not disclosed
- One-on-one work with a wealth advisory team
Betterment vs. Ellevest—Top Features Deep Dive
Which robo-advisor best fits your needs: Betterment vs. Ellevest? If you are still unclear, this deep dive may help illustrate some more important differences.
Betterment vs. Ellevest—Human Financial Planners
Both robo-advisors offer access to human financial planners, although they do so with varying degrees of access.
Betterment has the most accessible human financial planners, offering clients the ability to text with advisors regardless of account value. This is a very valuable offering, as many robo-advisors charge more for accounts with access to human financial professionals. Although, for one-on-one financial planner meetings, clients must either purchase an a la carte session or pay the .50% management fee for unlimited sessions at the Betterment Premium level.
Ellevest also offers access to human financial planners but does so only at the Premium and Private Wealth Management levels. Premium clients need to have $50,000 minimum in investments and will pay 0.50% AUM for this service, making the access to human financial professionals much less affordable than Betterment.
Betterment vs. Ellevest—Tax-Loss Harvesting
Like many robo-advisors on the market, Betterment offers tax-loss harvesting on their portfolios. This is quickly becoming standard for many robos, though not all have followed suit yet.
While Ellevest does not specifically offer tax-loss harvesting, they do boast a tax-minimization strategy that functions in a similar way. This includes diversifying taxable and non-taxable accounts within your portfolio and, whenever possible, minimizing taxable gains while maximizing taxable losses.
Betterment vs. Ellevest—Investments
Betterment and Ellevest are both committed to providing clients with good investment options. While Betterment’s are certainly well-rounded, Ellevest offers a more diverse pool of stocks, bonds, and other investment funds.
If you’re seeking cash management and access to a high yield money market fund or an income portfolio, Betterment is a good choice.
- US Small-cap stocks
- US Mid-cap stocks
- US Large-cap stocks
- International Emerging Market stocks and bonds
- International Developed Market stocks and bonds
- High Quality bonds
- Municipal bonds
- Inflation-Protected bonds
- High-yield corporate bonds
- Short-term treasury bonds
- Short-term investment-grade bonds
- US Large Cap Value
- US Mid Cap
- US Small Cap
- US Small Cap Value
- International Developed markets
- International Emerging Markets
- International Total Bond
- US Dollar Emerging Market Bond
- Local Currency Emerging Markets Bonds
- US Total Bond
- US Short Term Bond
- US Mid Cap Value
- High Yield Bond
- US TIPS (treasury inflation protected) Bond
- US High Yield Municipal Bond
- US Short Term Municipal Bond
- US Municipal Bond
- FDIC Cash
- US REIT – Real Estate Fund
- International REIT – Real Estate Fund
Betterment vs. Ellevest—Which is Best? Takeaway
Deciding who wins in the Betterment vs. Ellevest faceoff is harder than it looks.
Both robo-advisors try to minimize clients’ taxable losses through tax-loss harvesting or tax-minimization strategies. They also seek to provide affordable account management, offering their basic Digital accounts at 0.25% AUM with no minimum balance requirements. For that reason, both robo-advisors are strong contenders for any investor, regardless of income level or experience with investing.
Bonus: Best Robo-Advisors for Women
However, the two robo-advisors start to diverge substantially when it comes to other key features, notably their access to human financial planners and their second-tier account offerings.
Betterment has much more to offer in terms of access to human financial planners. And while Ellevest Private Wealth Management clients can expect the royal treatment in terms of human account management, the account requires a minimum of $1 million in investments and does not disclose its account management fees.
While Ellevest does have a higher AUM fee for their Premium account level (0.50% to Betterment’s 0.40%), they also have a lower initial investment amount– Ellevest’s $50,000 minimum requirement is exactly half of Betterment’s $100,000, meaning that clients can get access to Premium services a bit faster.
Additionally, Ellevest’s Premium accounts are more holistic than Betterment’s. Premium clients will have access to not only financial planners, but career advice. This furthers Ellevest’s commitment to helping women overcome the gender pay gap.
For banking services and cash management under one roof, Betterment is a sound choice.
Ultimately, determine what features are most important to you and invest accordingly.
- Direct Access: Betterment Website
- Read the complete Betterment Review
- Direct Access: Ellevest Website
- Read the complete Ellevest Review