While no investment option is completely risk-free, robo-advisors have been on the market for quite a while now and are developing a reputation for being as good as, if not better than, their human counterparts. Each robo-advisor has some unique features, of course, so how do you choose which robo-advisor is right for you? Today we’re going to help by comparing two high-quality robo-advisors: Betterment vs Fidelity Go.
- Betterment vs Fidelity—Overview
- Betterment vs. Fidelity—Top Features
- Betterment vs. Fidelity—Who Benefits?
- Betterment vs. Fidelity—Fees and Minimums
- Betterment vs. Fidelity—Deep Dive and Unique Features
- Betterment vs. Fidelity—Which is Best? The Takeaway
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Betterment vs Fidelity—Overview
What is Betterment?
Founded in 2008, Betterment is one of the most well-known robo-advisors on the market. Continuously innovating, Betterment also offers all users access to financial advisors.
Betterment is the largest free-standing robo-advisor, not affiliated with a major investment company.
Betterment is a goals-based robo-advisor, which means it takes client goals— such as marriage, retirement, or a large purchase— into consideration when it creates portfolio allocations. However, Betterment offers much more than the typical, run-of-the-mill investment manageament options. This robo-advisor offers smart-beta portfolios and socially-responsible investments in addition to more traditional portfolio options, making it a good fit for many different investment styles.
Betterment also offers financial planners for all customers.
What is Fidelity?
Fidelity Go is a member of Fidelity Investments, a long-standing investment management firm. So this robo-advisor is backed by a well-known financial institution. This is a huge draw for investors who are wary of using stand-alone robo-advisors.
Wondering what kind of account is Fidelity Go? It is a robo-advisor or automated investment manager. The Fidelity robo invests your money in passively managed fee free investment mutual funds.
Along with computerized investment management the Fidelity Go robo-advisor includes an annual strategic review.
Fidelity also offers managed accounts for wealthier investors seeking financial advisor access.
Betterment vs. Fidelity—Top Features
Betterment vs Fidelity Go
|Overview||A goals based automated investment advisor. Offers a variety of human financial planning options.||Automated investment management robo-advisor platform with access to fee- free Fidelity Flex mutual funds and the Fidelity Investment Company’s services.|
|Top Features||Goal-based investment management. Rebalancing. Tax-loss harvesting. SRI, smart beta + income portfolios. Human financial advisor access.||Part of the Fidelity Investments family, giving you access to all that the company offers. Automated investment management. Annual Strategic Review.|
|Free Services||Free investment management promotion||N/A|
|Fee Structure||Digital-0.25% AUM Premium-0.40% AUM||Up to $10,000 free investment management. $10,000 to $49,999 - $3 per month. Over $50,000 - 0.35% aum|
|Accounts Available||Single + joint taxable brokerage. Roth, traditional, rollover + SEP IRA. Trust.||Single + joint taxable brokerage accounts; Traditional, Roth + rollover IRAs.|
|Investment Funds||Low-cost, commission-free ETF from diverse asset classes. Smart beta, income and socially responsible investing available.||Zero-fee Fidelity Flex mutual funds from basic asset classes.|
|Contact & Investing Advice||Phone M-F and Email-24/7. Financial advisor access.||Phone and Live Chat 8 a.m. to 8 p.m. ET, M-F|
|Minimum Investment Amount||There is no minimum investment amount required for Digital. $100,000 required for Premium.||There is no minimum investment amount required.|
Betterment Top Features
- Socially-Responsible Investing
- Smart-Beta Portfolios
- Human financial planners available via text and via video chat
- Retirement guide calculator
- Tax-loss harvesting
Fidelity Top Features
- Member of the Fidelity Investments family
- Annual strategic review
- No-fee Fidelity flex index funds
- First $10,000 managed for free
Betterment vs. Fidelity—Who Benefits?
Betterment is the third largest robo-advisor after Vanguard and Schwab and manages more than $22 billion (as of April, 2020). Betterment is bet for new to advanced investors.
Betterment Digital is suitable for all levels of investors with it’s diverse portfolio options, opportunity to access financial advice through text and financial planning packages. High net worth investors can also opt for Betterment Premium with financial advisors and other benefits. Betterment has many options for investors, including Smart-Beta portfolios for those who want to beat the market. Betterment also offers socially responsible and income only portfolios. Betterment claims more account types and lower fees – for the Betterment digital plan – than Fidelity Go.
Clients who want their money passively managed by a bigger financial firm will benefit from Fidelity. Investors seeking a robo-advisor and self-directed investment account under one roof might lean towards Fidelity Go.
New investors seeking free investment management for accounts worth up to $10,000 might choose Fidelity Go.
Betterment vs. Fidelity—Fees and Minimums
Winner: Betterment and Fidelity are tied for fees and account minimums. Both offer zero account minimums.
Small investors with less than $10,000 will benefit from zero account management fees at Fidelity Go. While larger investors benefit from Betterment Digital’s .25% AUM management fee vs Fidelity Go’s 0.35% of AUM fee for accounts worth more than $50,000.
Betterment Fees and Account Minimums
Betterment does not have any minimum investment requirements for their basic portfolio, Betterment Digital.
- Betterment Digital: 0.25% AUM – Accounts over $2 million pay 0.15% AUM
- Betterment Premium: 0.50% AUM – minimum account size $50,000. Offers financial advisor access. Accounts over $2 million pay 0.40% AUM.
Betterment also offers individual financial consultations for set prices, for clients who have specific needs. These a la carte services cater to those reaching major life milestones, like marriage, retirement, and college savings for children.
Fidelity Fees and Account Minimums
Unlike Betterment, Fidelity Go offers only one robo-advisor plan. Fidelity Go is comparable to Betterment in that it does not have a minimum balance requirement on its accounts; however, clients will need to have a minimum of $10 in their accounts before Fidelity Go will invest their money.
Fidelity Go fees:
- Up to $10,000 – zero account management fees
- $10,001 to $49,999 – $3.00 per month
- $50,000 and up – 0.35% AUM
Betterment vs. Fidelity—Deep Dive and Unique Features
Betterment vs. Fidelity—Human Financial Planners
For an affordable robo-advisor, Betterment boasts high-end access to human financial planners. Betterment offers all clients the opportunity to text with human financial planners, regardless as to whether they have Betterment Digital or Premium.
All Betterment Premium clients have access to licensed certified financial planners (CFP).
Betterment digital clients can also pay for additional one-on-one time with human financial planners through the a la carte services.
Fidelity Go doesn’t offer certified financial planners for their clients. But, through the Fidelity branch and phone network, financial consultants are available for brief questions, not the in depth advice of a financial planner.
For wealthier investors, Fidelity does offer managed portfolios with financial advisor access.
In the Fidelity vs Betterment financial advisor comparison, Betterment comes out on top. The a la carte financial planning packages and ability to text with advisors is unique for a robo-advisor that charges a low .25% AUM management fee.
Betterment vs. Fidelity—Tax-Loss Harvesting
Tax-loss harvesting is almost a given for robo-advisors, but Fidelity breaks away from this trend. Fidelity Go does not offer tax-loss harvesting on their accounts, instead choosing to offer IRAs as their sole tax-advantaged accounts.
Betterment, on the other hand, does offer tax-loss harvesting which reduces payments to the IRS, in taxable investment accounts. TLH not only reduces taxes but may boost investment returns. This strategy for minimizing loss is not foolproof, but it does give Betterment the upper hand in this category.
Betterment vs. Fidelity—Investments and Portfolios
Both robo-advisors offer a solid mix of investment options. However, Betterment has a greater selection of investment funds with more diversity.
- US. Total Stock Market
- US. Large-Cap Value
- US. Mid-Cap Value
- US. Small-Cap value
- International- Developed Market
- International- Emerging Market
Bond/Fixed Income Allocation:
- US. High Quality Bonds
- US. Municipal Bonds
- US. Inflation-Protected Bonds
- US. High-Yield Corporate Bonds
- US. Short-Term Treasury Bonds
- US. Short-Term Investment-Grade Bonds
- International Developed Market Bonds
- International Emerging Market Bonds
Betterment also offers specialty portfolios including:
- Smart Beta
- Income Portfolios
Fidelity Go has introduced Fidelity Flex Funds, which are fee-free index mutual funds.
Fidelity Go Flex Funds, Bond and Cash Allocations:
- US. Large-Cap Stocks
- US. Mid-Cap Stocks
- US. Small-Cap Stocks
- Foreign Stocks
- Municipal Bonds
- Short-Term Municipal Bonds
- Short-Term Cash
Betterment vs. Fidelity—Account Types
Betterment handily beats Fidelity Go when it comes to the list of account types. And, Betterment recently launched checking, high yield savings accounts with fee free debit cards and ATM access. Read more about the Betterment Checking and Betterment Cash Reserve products.
The only saving grace in the Fidelity and Betterment account type competition is that investors can access multiple account types in a separately managed Fidelity account including cash management options. Although these accounts are not included in the Fidelity robo.
Betterment account types:
- Individual taxable accounts
- Joint taxable accounts
- Traditional, Roth, and Rollover IRA accounts
- SEP IRA accounts (for the self-employed and small businesses)
- Trust accounts
- High-interest savings accounts
- Checking account
Fidelity Go account types:
- Individual taxable accounts
- Joint taxable accounts
- Traditional, Roth and Rollover IRA accounts
Betterment vs. Fidelity – Retirement Planning
Winner: It’s a tie.
In the Fidelity Go vs Betterment contest, both platforms offer resources to assess the likelihood of reaching your retirement goals.
But, Betterment enables users to connect outside accounts to the Betterment platform, which will give much more accurate planning data.
For that reason, Betterment wins the retirement planning race.
Although, if you’re interested in retirement planning, we recommend the Personal Capital cash, budgeting, retirement and investment management dashboard. You can’t beat the price and the breath of reports is outstanding. You can sign up here for the free toolkit.
Betterment vs. Fidelity -Security
Winner: It’s a tie.
If you’re worried about institutional failure and losing your money, Fidelity Go and Betterment both offers SIPC insurance up to $500,000 and a customer guarantees against unauthorized activity.
The Fidelity vs Betterment security contest is a tie. You can rest assured that your money will be equally safe at either company. Both use the highest levels of encryption and security protocols.
Betterment offers the strongest available browser encryption, secure servers, and two-factor authentication. Betterment runs frequent hacker checks and audits of software and systems. All Betterment emails are secure and address you by name. And all Betterment employees pass a criminal background check.
Fidelity Go Security
Fidelity security is top priority. The firm safeguards your account with encryption, firewalls, secure email and 24/7 system surveillance. Fidelity also offers 2-factor authentication and money transfer lockdown which blocks your account from unauthorized withdrawals.
Of course, there is no protection from the normal ups and downs of asset prices. That’s a normal part of investing.
The ultimate answer depends upon what you are seeking in a financial manager. We prefer Betterment due to the financial advisor access, more diversified funds and investment strategies, cash management, and tax loss harvesting.
Investing with a robo advisor, like Fidelity Go or Betterment is a wise idea if you want to build wealth for your future. Just remember, that investing is only appropriate with money that you aren’t likely to need for the next few years. That’s because investment values can go up and down in the short term.
We prefer Vanguard Digital over Fidelity Go becasue of lower fees and broader diversification at the Vanguard robo-advisor. Although if you don’t have the $3,000 investment minimum, required by Vanguard Digital, then Fidelity Go is the best option.
Betterment vs. Fidelity—Which is Best? The Takeaway
These robo-advisors are difficult to compare, because they both offer great value for their price points. But, overall we favor Betterment, and here’s why.
Betterment is best for:
- Beginning to advanced investors.
- Investors who want access to human financial advisors
- Investors seeking diverse asset classes and investmetn styles.
- Investors who want cash management
- Investors who want a portfolio review and analysis that includes all of their accounts
Fidelity Go is best for:
- Investors with less than $10,000 seeking fee-free investment management. Although Schwab Intelligent Portfolios offers greater investment diversity and fee free investment management for all investors.
- Existing Fidelity customers.
- Investors seeking a robo-advisor that is part of a large financial firm with branch access.
The fees and minimums for Betterment vs. Fidelity are comparable overall. At the lowest account value, Fidelity Go offers free account management for investors with less than $10,000. While larger investors will pay lower management fees at Betterment.
Betterment’s financial advisor access is a compelling feature.
Betterment offers clients access to human financial planners for a very affordable cost because Digital clients are allowed to text advisors. Betterment Premium clients have access to Certified Financial Planners for all wealth management questions. While more robo-advisors are including human financial professionals as part of their services, it is rare to find them in Betterment’s fee range.
Betterment’s cash management program is great, although if Fidelity investors desire cash management, they can access that with another Fidelity account.
Betterment also offers tax-loss harvesting, smart beta portfolios, and income portfolios, while Fidelilty Go does not.
Finally, if you’re seeking a digital or robo-investment manager, then Betterment offers a more comprehensive service with more diverse investments and financial advisor access at a lower overall price.
But, if you just want the basic robo investment management and would like access to other Fidelity services and self-directed investment accounts, then you might lean towards Fidelity Go.
Read the complete Betterment Review
Read the complete Fidelity Go Review
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