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
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 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.
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 and actively managed investment funds. This investing strategy is distinct from other passively managed robo-advisor investments.
Along with computerized investment management the Fidelity Go robo-advisor includes financial planner oversight with regular rebalancing and annual strategic review.
Betterment vs. Fidelity—Top Features
|Overview||Goals-based digital investment manager with access to financial advisors and cash management.||Automated investment advisor based on your risk tolerance and goals.|
|Minimum Investment Amount||No minimum for Betterment Digital. $100,000 minimum for Betterment Premium.||No minimum balance required.|
|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.
|0.35% of AUM |
The annual fee may be reduced via the application of a ""variable fee credit,"" the amount of which will vary based on the investments held in your account. All investment funds carry $0 management fees.
|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.||FidelityGo sets up a diversified portfolio of ETFs from these categories; domestic stocks, foreign stocks, bonds, or short term investments. Short term investment category is distinct from many other robo-advisors & good for ready cash access. Regular rebalancing is available.|
|Free Services||Free portfolio review.||N/A.|
|Contact & Investing Advice||Phone and email support 7 days per week.||Phone 24/7|
Live Chat (offline) 8 am - 8 PM EST Monday - Friday.
|Investment Funds||Low fee exchange traded funds from diverse asset classes.||Combination of mutual funds and exchange traded funds (ETFs), depending on the investment strategy you select. Funds generally hold domestic stocks, foreign stocks, bonds, or short term investments. The majority of funds carry no management expense ratio.|
|Accounts Available||Single and joint taxable brokerage. Roth, traditional, rollover and SEP IRA. Trust.||Individual & joint investment accounts. Roth, traditional & rollover IRAs.|
|Promotions||Free account management special promotion.||N/A|
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
- Active and passive investment strategies
Betterment vs. Fidelity—Who Benefits?
Clients who want their money both actively and passively managed by a bigger financial firm will benefit from Fidelity. Fidelity Go can offer active management strategies at a more affordable price point than many competitors because the firm has more resources than some standalone robos. Investors seeking a robo-advisor and self-directed investment account under one roof might lean towards Fidelity Go.
Betterment is the third largest robo-advisor after Vanguard and Schwab and manages more than $16 billion. The firm is suitable for the investor just starting out with Betterment Digital. 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.
Betterment vs. Fidelity—Fees and Minimums
Betterment and Fidelity are tied for zero account minimums.
Betterment wins for the lower fees when comparing Betterment Digital with Fidelity Go.
Betterment Fees and Account Minimums
Betterment does not have any minimum investment requirements for their basic portfolio, Betterment Digital. Digital clients will pay 0.25% AUM for the service— a good deal, when all the offerings are considered. The fees drop to 0.15% AUM when account values rise to $2 million.
For clients who want premium services, Betterment provides the aptly named Betterment Premium— a service for clients with a minimum $100,000 investment. The fee for Premium is 0.40% AUM, or 0.30% AUM for accounts valued over $2 million.
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. Clients can expect to pay 0.35% AUM in account management fees. This is 0.10% higher than the basic Betterment Digital fee.
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 combines passive and active account management for their clients. This means that while the robo-advisor software will handle much of the day-to-day trading and portfolio balancing that happens, a team of investment professionals will also monitor your investments. Although, 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.
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.
- 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 investments similar to low-fee index mutual funds. These funds do not, however, charge a management fee.
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
Fidelity does claim to offer actively managed investment funds as well, although they aren’t listed on the Fidelity Go website.
Betterment vs. Fidelity—Account Types
Betterment handily beats Fidelity Go when it comes to the list of account types. And, Betterment also recently launched checking, high yield savings and cash management in their BettermentEveryday 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
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
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.
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.
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.
The fees and minimums for Betterment vs. Fidelity are comparable, although Betterment Digital charges .25% of AUM vs Fidelity Go’s .35% management fee. Betterment Digital clients and Fidelity Go clients alike will have no minimum balance requirement to open their accounts, though Betterment Premium clients will need at least $100,000 for their minimum investments.
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 EveryDay’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 at a lower basic 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
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Read the complete Fidelity Go Review
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