Betterment vs. Vanguard-Which Robo-Advisor is Best for You?

Betterment vs Vanguard logos

Choosing between robo-advisors can be hard when you’re stuck between two well-known, strong contenders. Betterment vs. Vanguard Personal Advisor Services is a particularly difficult choice, as both robos have human financial professionals available to their clients, and we like both.

In fact, Betterment and Vanguard are number three and number one respectively on the list of the robo-advisors with the most AUM.

Before you flip a coin, there are some crucial differences between these robo-advisors you should be aware of.

*Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link.

Betterment vs Vanguard Digital and Personal Advisor Services – Overview

What is Betterment?

Betterment is one of the earliest robo-advisors and currently manages more than $22 billion.

Betterment offers two investing levels, a low fee, no minimum Digital plan and Betterment Premium, with financial advisors for all clients. Premium charges higher fees and has a $100,000 minimum.

Here are a few reasons that we like Betterment:

  • Low fee, goal-based investment management.
  • Various types of investing available including smart beta and socially responsible portfolios
  • Cash management including fee-free debit cards and Betterment Reserve – a high yield cash account.
  • Financial advisor access for all clients – including goal specific, low cost planning packages

Betterment can meet the needs of beginners to advanced investors. In fact, it’s great for millennial investors.

What is Vanguard Personal Advisor Services and Digital Advisor?

Vanguard is the well-known financial management firm, founded by John Bogle, who launched the first index fund. They’re known for their low fees.

Vanguard also offers two plan levels, like Betterment.

The Vanguard Digital Advisor is a basic robo advisor and offers low-fee investment management driven by your risk level and goals.

The Personal Advisor Services is a hybrid model that offers both human advisors and a digital investment platform. You can be as involved as much or as little as you’d like.

The Vanguard robo-advisor top features include:

  • With Personal Advisor Services, human financial planners lead investment advice and provide a customized investment plan
  • The Digital plan considers all of your investments when creating your portfolio and is focused on retirement planning
  • Ultra low 0.15% management fee, although requires a $3,000 minimum investment
  • Additional Digital Plan features expected like – debt management and emergency fund planning

Betterment vs Vanguard Top Features

OverviewGoals-based digital investment manager and advisor-led robo advisor. All clients have access to financial advisors and cash management.All digital and human advisor-led investment management robo-advisor
Minimum Investment AmountDigital-no minimum 
Premium-$100,000 minimum
Personal Advisor Services-$50,000
Fee StructureDigital-0.25%  AUM
Premium-0.40% AUM
Digital-0.15% AUM
Personal Advisor Services-0.30%
Top FeaturesDigital and hybrid investment management with financial advisors. All investors can text with financial advisors. Socially-responsible, income and smart beta portfolios. Tax loss harvesting. Cash management.Digital-Basic four Vanguard fund robo-advisor.
Personal Advisor Services-Personalized investment guidance drives the portfolio construction. Variety of investment funds.
Investment FundsLow fee exchange traded funds from diverse asset classes including inflation protected bond and value stock ETFs.Digital-4 low fee Vanguard ETFs
Personal Advisor Services-Various stock and bond mutual funds and ETFs selected from scores of Vanguard offerings.
Accounts AvailableSingle and joint taxable brokerage. Roth, traditional, rollover and SEP IRA. Trust.Digital: Individual taxable accounts, traditional and Roth IRA
Personal Advisor Services: Individual and joint taxable investment. Roth, traditional, SEP, simple and rollover IRAs. Trusts. 
Contact & Investing AdvicePhone support M-F. Email and text support 7 days per week. Financial advisor access available at various levels.Phone support M-F from 8:00 am to 7:00 pm EST
Financial advisors available for Advisor Services only.
Promotions and WebsiteFree Betterment investment management promotionVanguard Website

Betterment vs Vanguard Robo Advisor—Who Benefits

The Betterment vs Vanguard robo match up is a difficult contest.

Betterment and Vanguard Personal Advisor Services each boast some of the most desirable robo-advisor features, including a human touch, reasonable fees, and portfolio review and rebalancing.

We like both and believe that most investors could be satisfied with either. That said, here’s how you might benefit from each.


We like that Betterment is a robo-advisor first and is advised by one of the top investment pros of our time – Burton Malkiel (author of a Random Walk Down Wall Street). This is in contrast with in contrast with Vanguard which is a large financial powerhouse

Betterment Digital doesn’t require a minimum investment amount, so if you’re a small investor, then choose Betterment.

If you want access to financial advisors and are comfortable with texting, then Betterment Digital is your best choice.

Betterment is also a wise choice for investors seeking smart beta or socially responsible portfolios.

If you think you might need to chat with a financial advisor for occasional concerns such as an investment portfolio review or college planning, but aren’t qualified or interested in the Premium option, then choose Betterment. The a la carte Betterment financial planning packages start at $199 and provide access to financial advisor guidance.


Vanguard Digital might be best if you’re seeking  a rock bottom investment management fee of 0.15% and have the $3,000 investment minimum.

Vanguard is a good choice for investors who already have accounts with the firm.

For investors seeking financial advisor access along with automated investment management either would be fine, although Vanguard Personal Advisor Services has a lower management fee and investment minimum.

Quick Summary

  • Betterment is best for small investors with no investment minimum required.
  • Betterment is best if you want the Digital level and appreciate the opportunity to text with financial advisors and purchase individual financial planning packages.
  • Vanguard is best if you’re seeking a hybrid robo and human advice model and prefer lower management fees with the lower $50,000 minimum investment amount.

Fees and Minimums

Winner: It’s a tie. Betterment wins with no investment minimum while Vanguard claims lower fees.

Minimum InvestmentDigital-$3,000
Personal Advisor-$50,000
Digital-No minimum
FeesDigital-.15% AUM
Personal Advisor-.30%

Deep Dive

When it comes to Betterment vs. Vanguard Personal Advisor Services and Vanguard Digital, which one is the better depends upon your individual financial situation and goals. Although, there are a few defining features that set these robo-advisors apart.

Human Financial Advisors

Winner: Betterment squeezes out a win with texting for all clients and a la carte financial planning packages.


Human financial planners are available via text message at all levels, including the Digital level (which costs 0.25% of AUM).

Betterment Premium customers qualify for in-person meetings with Certified Financial Planners.

The a la carte financial planning services, however, might be the best solution for many clients who need short-term face-to-face advice for low fees.

Vanguard Personal Advisors

Vanguard Digital lacks access to financial advisors. Although I assume that since Vanguard is such a large firm, you might be able to access some rudimentary financial information from a customer service representative.

Wealthier investors might lean towards Vanguard.

With Vanguard Personal Advisor Services, human financial planners are an integrated part of the package. Clients have unlimited access to human financial planners who are hands-on throughout the entire process. For investors with at least $50,000, the 0.30% annual fee of assets under management (AUM), is lower than Betterment’s 0.50% AUM investment management fee and $100,000 minimum. Betterment Premium clients will need over $2 million in investments in order to have a 0.30% AUM fee.

Tax Loss Harvesting

Winner: Betterment offers tax loss harvesting for all taxable accounts.


Betterment offers tax-loss harvesting in their taxable accounts. Although, it is not automatic, you need to turn it on.


Unlike other robo-advisors, Vanguard Personal Advisor Services provides tax-loss harvesting on a case-by-case basis. However, Vanguard still engages in tax-advantaged investing with your account. In doing so, they allocate assets based on the taxability of that account. 


Winner: Betterment wins for the Digital contest with much greater diversity than Vanguard. In their premium versions, it’s difficult to compare, since we don’t know all of Vanguards available funds.


Betterment delves into diverse corners of the investment universe to capture various U.S. and international stock and bond funds.

Betterment also offers smart beta, socially responsible, and income portfolios.

Betterment Investments:

Stock Funds

  • Total U.S. Stock Market ETF (VIT, SCHB, ITOT)
  • U.S. Large-Cap Value ETF (IVTV, SCHV, IVE)
  • U.S. Mid-Cap Value ETF (VOE, IWS, IJJ)
  • U.S. Small-Cap Value ETF (VBR, IWN, IJS)
  • International Developed Market Stock ETF (VEA, SCHF, IEFA)
  • International Emerging Market ETF (VWO, IEMG, SCHE)

Bond Funds

Betterment offers 8 bond ETFs spanning U.S. corporate, high yield, short term, municipal and treasury bonds. Additional bond categories include both developed and emerging market bond funds.


List of Vanguard Digital Advisor ETFs

Vanguard Digital robo advisor creates all portfolios with just 4 ETFs:

  • Vanguard Total Stock Market ETF
  • VAnguard Total International Stock ETF
  • Vanguard Total Bond Market ETF
  • Vanguard Total International Bond ETF

Although these four ETFs offer broad diversification, we would like to see a real estate investment trust (REIT) ETF.

Vanguard Personal Advisor Core Investments:

Vanguard Personal Advisor lists only its core funds. The only way to know the other investment funds they use is to open an account. Since Vanguard uses best practices investing and is known for low-fee funds, I would be confident in their fund offerings.

  • Total U.S. Stock Market Index Fund (VTSMX)
  • Total International Stock Index Fund (VTIAX)
  • Total Bond Market Index Fund (VBTLX)
  • Total International Bond Index Fund (VTABX)
  • Intermediate-Term Investment Grade Fund (VFIDX)
  • Short-term Investment Grade Fund (VFSUX)
  • Intermediate-Term Tax-Exempt Fund (VWIUX) (for taxable accounts only)


Winner: It’s a tie. Both Vanguard and Betterment offer rebalancing.

Rebalancing is the most universal characteristic of robo-advisors.

Simply, when you begin your investment with a firm, you answer a few questions and choose an investment portfolio which allocates a portion of your money to stock, bond and other asset classes. The firm will rebalance your investments back to your original choice periodically. This ensures that your investments stay in the proportions that you initially selected.

Retirement Planning

Winner: Betterment

Betterment Retirement Goal


Betterment offers retirement goals for all service levels.

The Retirement Savings Calculator uses 20 inputs to figure out how much you’ll need to have in order to meet your individual retirement spending goals. Then the guide tells you exactly how much you’ll need to save and in which accounts in order to reach your retirement plan.


Vanguard Personal Advisor Services offers individual guidance and retirement planning. While Vanguard Digital is limited and actually states that their services is not for those in retirement.

Although you can save and invest for retirement in a traditional or Roth IRA with Vanguard Digital, this service is more basic with fewer funds and fewer types of available accounts for retirement saving. For example, Vanguard Digital doesn’t doesn’t offer any type of business retirement account.

Customer Service

Winner: Betterment


Betterment provides phone support Monday through Friday. Email and text support are available 7 days per week.

We like that all Betterment customers can text with financial advisors 7 days per week. This is an outstanding feature as financial questions don’t stop on the week-ends!


Vanguard also offers phone support Monday through Friday. You can contact the firm via email 24/7, although you’ll expect responses during week days.

Mobile App

Winner: Betterment

Since Betterment is a robo-advisor focused platform, their app is more targeted than Vanguard’s. The app is comprehensive with mostly favorable ratings.

We like that Betterment responds to problems and concerns with the app and then proceeds to fix the bugs.

Vanguard recently introduced a new app – Vanguard Beacon. There’s not a lot of feedback regarding the new app, but they don’t have a robo-advisor specific app. Thus users have one app for the entire Vanguard website. For that reason, we prefer Betterment’s app.


Winner: It’s a tie.

You can be confident with top level security for Betterment and Wealthfront.

Betterment offers the strongest available browser encryption, secure servers, and two-factor authentication.

As Vanguard is one of the most prominent Finance companies in the U.S., you can be confident that they implement the highest security protocols.

Cash Management

Winner: Betterment


Betterment checking and cash reserve offers has a suite of tools including:

  • Fee-free high yield cash account with no minimums or withdrawal limits
  • No-fee checking account and Betterment Visa Debit Card


The Vanguard robo-advisors don’t offer cash management or checking within their platforms. Although if you open a separate brokerage account at Vanguard you can invest in a high yield money market account or brokered certificate of deposit.

Vanguard doesn’t offer typical checking accounts.


Is Vanguard Digital Free?

No, there is a 0.15% of AUM management fee and a $3,000 minimum investment amont.

Is Betterment better than Vanguard?

We believe Betterment Digital is better than Vanguard Digital.
The premium versions of both platforms are quite good. Ultimately, consider what you are seeking in an investment manager to make your choice easier.

Visit the Robo-Advisor Selection Wizard, take a quick quiz, and find out which robo-advisor is the right one for you.

Betterment vs Vanguard — Wrap Up

Is Vanguard Personal Advisor Services worth it? Absolutely.

Is Betterment worth it? Yes it is.

Each robo-advisor is a good choice, for the right investor.

If you’re seeking a basic low-fee robo-advisor we recommend Betterment.

Betterment Digital is superior to Vanguard Digital because it offers greater account types, substantially more investment funds and investment styles.

Betterment Digital also requires no minimum investment amount – ideal for new investors.

Plus, one of our fav features of Betterment Digital is the ability to text with financial advisors.

Ultimately, if you need an occasional sit-down with a financial advisor, Betterment offers their a la carte financial planning packages.

For investors seeking a hybrid financial advisor with regular financial advisor access, the choice is a bit more difficult.

If you only have $50,000 to invest, then you’ll pick Vanguard, due to the lower minimum required.

If management fees are a concern, then Vanguard Personal Advisor Services wins with a low 0.40% AUM investment management fee. This is in contrast with Betterment’s 0.50% fee.

If nominal fee differential or minimum investment requirement isn’t pressing issue, then we believe both Vanguard Personal Advisor Services and Betterment Premium are sound investment management choices.

You might have a bit more input into portfolio construction with Vanguard although we are comfortable with both platforms’ investment management and construction.

Finally, your choice between Betterment or Vanguard depends upon your own personal investment situation. Whichever platform you choose, you can rest assured that each or well regarded robo-advisors.

Read: Betterment Review

Read: Vanguard Robo-Advisor Review

Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t  believe is valuable

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