Paid non-client of Betterment. Views may not be representative, see more reviews at the App Store and Google Play Store. Learn more about this relationship.
Robo-advisors continue to disrupt traditional investment service models. The number of robo-advisor options can make it confusing to determine which one best suits you. Betterment and E*TRADE Core Portfolios present two intriguing choices that have distinct features but share a common mission of making portfolio management simpler, smarter, and more accessible to everyone. Additionally, both companies are among the winners in our list of the best robo-advisors of 2024, with Betterment winning best for beginners, cash management, tax-loss harvesting, and crypto while E*TRADE Core Portfolios wins best for mobile.
E*TRADE began in 1982 as a discount broker before growing into a top trading platform, eventually expanding into digital investment management by launching Core Portfolios. Morgan Stanley’s 2020 acquisition of E*TRADE further bolstered its position in the industry and has led to a deeper asset pool and new services like tax-loss harvesting. Betterment arrived on the scene with its robo-advisor service in 2010. An early challenger to conventional portfolio management, Betterment continues to think ahead as illustrated by its addition of cryptocurrency portfolios. Compare the two and all that they offer to see if one of these robo-advisors is right for your financial situation.
- Account Minimum: $0, $10 minimum to start investing. Crypto minimum $50. $50 minimum for rebalancing.
- Fees: 0.25% (annual) for investing plan accounts with at least $20,000 or at least $250 per month in recurring account deposits. Otherwise, the fee is $4/month. An additional 0.15% (annual) fee on accounts with at least $100,000 in assets for Betterment Premium account holders with unlimited access to certified financial planners. Crypto accounts are charged a monthly fee of 1% plus trading expenses. There are no management fees for Betterment Checking or Cash Reserve. For accounts with at least $2 million, there is a fee discount of 0.10% for balances greater than $2,000,000.
Key Takeaways of Betterment
- Best robo-advisor for beginners and best for cash management
- Premium service level offers unlimited financial advisor guidance for a variety of planning topics
- Powerful digital tools and calculators for planning multiple goals
- Financial account syncing lets you analyze your finances in detail
- Easy, intuitive sign-up process and site navigation
- Account Minimum: $500
- Fee: 0.3%
Key Takeaways of E*TRADE Core Portfolio
- Best robo-advisor for mobile
- Good for investors looking for a straightforward way to invest cash
- Linking of external accounts to the platform isn’t supported
- Narrow range of portfolio options means more suited for new investors than advanced traders
- Existing users of E*TRADE’s classic platform will find Core Portfolios a seamless transition
Account Setup
Betterment
Betterment has a smooth, simple onboarding process with a clear emphasis on a friendly user experience. To get started you’ll share your goals, investment experience, and other personal information to help the system identify a portfolio best geared toward your profile. Accounts can have different investment allocations based on separate goals, ensuring each portfolio accommodates your preferences. Like many robo-advisors, the investment strategy generally follows a passive approach based on modern portfolio theory (MPT) and invests in the market through exchange-traded funds (ETFs) that combine to make up different risk levels (crypto allocations are made separately). While there is no minimum required to open and maintain an account at Betterment, a deposit of just $10 is required to start investing. If you’re looking for further guidance, you can access human advisors through separately purchased packages or at the premium tier once you have deposited $100,000.
E*TRADE Core Portfolios
Creating a Core Portfolios account at E*TRADE is similarly straightforward and intuitive. Before you invest, E*TRADE offers a risk tolerance questionnaire to help assess your investment profile, factor in deposit estimates, and generate potential portfolio allocations. When you’re ready to get started, the Core Portfolios strategy requires at least a $500 initial deposit. In terms of investment approach, E*Trade’s Core Portfolios also follow a classic, passive strategy based on modern portfolio theory. Your money will be invested in ETFs exclusively. Investment advisors are accessible to prospective and current users without an additional fee, although this service is more geared toward getting you set up on the platform.
Account Setup Verdict: Betterment
The onboarding process at both digital investment advisors is relatively quick, easy, and entirely digital, but we give a slight nod to Betterment here since there is no investment minimum compared to E*TRADE Core Portfolios’ $500 minimum.
Account Types
E*TRADE and Betterment both offer the most commonly used investment account types, with a couple of differences. Betterment supports trust accounts and a high-interest cash management option. While E*TRADE Core Portfolios doesn’t offer these accounts, support is provided for Uniform Gifts to Minors Act (UGMA) and Uniform Transfer to Minors Act (UTMA) accounts that Betterment doesn’t offer.
Betterment Account Types
E*TRADE Core Portfolios Account Types
- Individual taxable
- Joint taxable
- Traditional IRA
- Roth IRA
- SEP IRA
- Rollover IRA
- Custodial accounts (UGMA and UTMA)
Account Types Verdict: Tie
Betterment and E*TRADE Core Portfolios both have the most commonly used account types. If you are looking for trust accounts, 529 plans, or high-interest checking accounts, then Betterment may have an edge, but the same is true of E*TRADE Core Portfolios if you want a custodial account.
Account Services
Transferring funds into and out of Betterment can be done seamlessly and without a fee by linking your bank to the platform. You can also transfer other investment accounts to the platform with relative ease. Once your money is on Betterment’s platform, you can use cash management services or automate your portfolio management. While these are all helpful tools to manage your money, Betterment does not offer lending services and margin accounts.
E*TRADE’s Core Portfolios lets you set up regularly scheduled deposits that are easy to adjust as your financial situation changes. Other financial transactions such as withdrawals, transfers, or moving money to other E*TRADE accounts are simple to set up. While financial tools such as margin, stock trading, and options aren’t available through Core Portfolios, you can access these features in other areas of E*TRADE’s product ecosystem.
Cash Management
Betterment won our best for cash management award for robo-advisors with a strong lineup that includes a checking account, debit card, and high-yield cash reserve account with a 5.00% variable APY.* Combined with portfolio management and financial planning options, Betterment provides various offerings if you’re looking to consolidate your finances under one umbrella.
E*TRADE’s Core Portfolios has limited cash management options in comparison. Cash in the portfolio is swept into a money market account so you can potentially earn a little higher interest than a traditional bank savings account offers. The minimum cash balance in your portfolio is 1% and it is swept into a Morgan Stanley bank deposit program for a yield of 0.01%. While other cash management features such as checking or bill pay aren’t available through Core Portfolios, you can access these options in other areas of E*TRADE’s site.
*Cash Reserve is only available to clients of Betterment LLC, which is not a bank, and cash transfers to program banks are conducted through the clients’ brokerage accounts at Betterment Securities. For Cash Reserve (“CR”), Betterment LLC only receives compensation from program banks; Betterment LLC and Betterment Securities do not charge fees on your CR balance.
Checking accounts and the Betterment Visa Debit Card provided and issued by nbkc bank, Member FDIC. Checking made available through Betterment Financial LLC. Neither Betterment Financial LLC, nor any of their affiliates, is a bank. Betterment Financial LLC reimburses ATM fees and the Visa® 1% foreign transaction fee worldwide, everywhere Visa is accepted.
Cash Management Verdict: Betterment
Betterment has more options for cash management than E*TRADE’s Core Portfolio, but it is important to note that there are options in E*TRADE’s larger financial ecosystem.
Goal Planning
Betterment
Goal planning is one of the key features of a strong digital investment advisor, and Betterment stands out here thanks to a broad and powerful range of tools, calculators, and goal-planning options. The goals you can choose from include general investing, retirement, major purchases, emergency funds, and education. If you fall behind on your goals, you’ll be prompted to adjust your strategy so you can get back on track. Betterment also allows you to link external financial accounts to the platform so you can get a better sense of your overall picture. Pairing these features with the available digital financial planning tools can help you get an insightful assessment of the likelihood of reaching your financial destination.
E*TRADE Core Portfolios
E*TRADE’s Core Portfolios platform doesn’t focus on goal-planning tools and features. This is intentional, as the experience is geared towards a streamlined portfolio management approach without unnecessarily complicating your dashboard with separate goals. As a result, you’ll use a single bucket of money to fund all of your financial objectives. Reporting progress on your goal is easy to follow, but you won’t receive tailored prompts to help improve your situation. Linking other E*TRADE accounts to the Core Portfolios site can give you a bit more insight, but other financial accounts can’t be synced. E*TRADE does provide you with extensive research and education resources to help supplement the planning experience, with some tools and calculators embedded in these sections. However, these features aren’t located within the Core Portfolios planning experience, limiting their usefulness.
Goal Planning Verdict: Betterment
When it comes to goal planning, Betterment has a clear edge over E*TRADE due to its far more comprehensive range of tools and taking external financial holdings into account.
Portfolio Construction
Betterment
Betterment uses ETFs exclusively to build portfolios. These allocations are divided up into several subcategories that include:
- Core portfolio with basic diversification and weightings
- Goldman Sachs Smart Beta portfolio attempting market outperformance
- Socially responsible allocations that score highly for social and environmental factors
- Flexible portfolios that feature general asset classes weighted by investor preferences and additional exposure to commodity and REIT funds
- Income-focused portfolio built with BlackRock ETFs
E*TRADE Core Portfolios
The portfolio makeup of E*TRADE Core Portfolios includes a variety of ETFs that can be combined to make up a variety of risk levels. While the investment strategy closely follows modern portfolio theory across the board, you have the ability to include socially conscious, income-focused, or smart beta ETFs as part of your investment allocation. These allocations are all highly diversified internationally and domestically across equity and fixed income. E*TRADE has increased the pool of assets it is pulling from as part of its tie-up with Morgan Stanley, so there are more global equities of all sizes being used to construct your diversified portfolio. E*TRADE Core Portfolios has also added an all-equity option for users with the highest risk tolerance.
Available Assets
| Betterment | E*TRADE | |
|---|---|---|
| Individual Stocks | No | No |
| Mutual Funds | No | No |
| Fixed Income | Yes (via ETFs) | Yes (via ETFs) |
| REITs | No | No |
| Socially Responsible or ESG Options | Yes | Yes |
| ETFs | Yes | Yes |
| Non-Proprietary ETFs | Yes | Yes |
| Mutual Funds | No | No |
| Forex | No | No |
| Crypto | Yes | No |
Portfolio Customization
Betterment
Betterment offers a Flexible Portfolio feature which gives you more say over how investments are allocated in your account. All Betterment portfolios let you adjust risk levels, but the Flexible Portfolio lets you go further by choosing amounts to allocate towards specific asset classes. Advanced investors will find this an especially intriguing option to fine-tune their portfolio.
E*TRADE Core Portfolios
E*TRADE offers the ability to customize your allocation as part of the available portfolio tooling. However, this is limited to risk level adjustments and portfolio preference opt-ins such as socially responsible, smart beta, and income-focused ETFs. While these features help align the portfolio to your liking, the level of customization is less than what Betterment offers.
Portfolio Customization Verdict: Betterment
Betterment’s Flexible Portfolio feature offers more opportunities to customize than E*TRADE Core Portfolios.
Portfolio Management
Automatic rebalancing is one of the fundamental portfolio management strategies that both Betterment and E*TRADE Core Portfolios offer, albeit with slightly different approaches.
Betterment
Betterment can rebalance your portfolio when the allocation drifts beyond your target allocation threshold and when the account balance minimum has been reached or passed. If you link external accounts, you can receive additional recommendations for your goals.
E*TRADE Core Portfolios
E*TRADE will rebalance your allocation automatically on a semi-annual basis or when the portfolio drifts more than 5% from the initial weighting. A rebalance is also triggered if cash exceeds more than 6% of your holdings. E*TRADE also keeps you informed on market movements that could impact your portfolio allocations.
Portfolio Management Verdict: Tie
Both robo-advisors offer rebalancing features and similarly have a threshold if the account drifts away from its set goals. Although there are some unique differences between the two robo-advisors, such as Betterment allowing external accounts or E*Trade Core Portfolio’s informing investors of market movements, the award could go either way depending on the needs of the investor and what they are looking for in a robo-advisor.
Tax-Advantaged Investing
Ensuring your taxable accounts are tax-optimized is an important aspect of portfolio management. Betterment and E*TRADE Core Portfolios both offer tax-loss harvesting for users who have taxable accounts. Both robo-advisors also undertake tax optimization where tax-advantaged investments like municipal bond funds are prioritized in taxable accounts.
Tax-Advantaged Investing Verdict: Tie
While no two robo-advisors will be identical in how they optimize and tax-loss harvest within a portfolio, both E*TRADE Core Portfolios and Betterment carry out these processes so you can hold on to more of the capital you earn in your portfolio.
Key Portfolio Management Features
| Betterment | E*TRADE | |
|---|---|---|
| Automatic Rebalancing | When portfolio drifts beyond 3% of your target allocation | Semi-annually or when target allocation deviates by more than 5% |
| Reporting Features | Net worth, goal progress, investment performance, tax, statements | General online monitoring, tax, statements |
| Tax-Loss Harvesting | Yes | Yes |
| External Account Syncing/Consolidation | Yes: Users can link external retirement, brokerage, and bank accounts; only Betterment holdings receive portfolio adjustments | No: E*TRADE offers this for its classic platform, but Core Portfolios does not offer this feature |
Betterment is not a licensed tax advisor. Tax Loss Harvesting+ (TLH+) is not suitable for all investors. Read more at and consider your personal circumstances before deciding whether to utilize Betterment’s TLH+ feature. Investing involves risk. Performance not guaranteed.
Security
E*TRADE and Betterment prioritize your financial security to ensure your assets are safeguarded. Standard Securities Investor Protection Corporation (SIPC) coverage is in place on both platforms for missing funds, which covers up to $500,000 total value or $250,000 cash in your account. E*TRADE has excess SIPC coverage through Morgan Stanley to an aggregated limit of $1 billion for securities and $1.9 million per client for uninvested cash. Both platforms also protect your data through encryption, two-factor authentication, and account monitoring.
Security Verdict: E*TRADE Core Portfolios
Your portfolio is safe at either of these companies, but we give E*TRADE Core Portfolios the edge here due to the excess SIPC coverage it has as part of the larger Morgan Stanley financial universe.
User Experience
Desktop
Betterment investors will find a user-friendly experience throughout the site with financial tools, reporting, and calculators that are intuitive and easy to use. Performance metrics, account details, and dashboard functionality are readily accessible and simple to navigate. If you connect outside accounts to Betterment, you’ll find it relatively effortless to monitor your finances.
The E*TRADE Core Portfolios desktop experience is also relatively simple to maneuver. The tabs, reports, and tools on the pages are spaced out to give an uncluttered feel to the site. Educational resources and research materials are also easy to find. Although account linking is limited to other E*TRADE holdings, you can quickly get a sense of how you are doing financially if you hold more than one account with the brokerage.
Mobile App
Betterment scores highly for its mobile experience, ranking 4.7 out of 5 for the iOS version and 4.6 out of 5 for Android. The mobile app has all the features and functionality that you would expect to see on the desktop experience, which is welcome news to users who prefer to access their portfolio from the app.
E*TRADE’s mobile experience is outstanding, winning our best in category for robo-advisors. The mobile app is sleek and exceptionally easy to navigate, especially during the mobile account opening process. Reporting and performance metrics are also very clearly understood. Users of other E*TRADE platforms will find that the Core Portfolios experience is a seamless transition.
Customer Service
Betterment’s customer service team is available by phone and email from 9 a.m. to 6 p.m. ET, Monday through Friday. If you’re part of the Premium Investing service, you’ll have unlimited access to financial planners. Investors who purchase advice packages can also engage with advisors based on the package offered. The FAQ and site resources are sufficient for most general inquiries as well.
E*TRADE’s phone lines are available 24/7. You can talk to a financial advisor on the phone or walk into a physical location for help. Keep in mind that this advice is generally more limited to ensuring you are set up on the platform correctly. The online FAQs are somewhat limited, although most general inquiries can be answered online.
Customer Service Verdict: E*TRADE Core Portfolios
Overall, E*TRADE Core Portfolios has better customer service than Betterment because it is easier to get people on the phone to help. Whether this matters depends largely on how you prefer to access help.
| Betterment | E*TRADE | |
|---|---|---|
| Phone & Email Available | Yes, 718-400-6898, weekdays, 9 a.m. to 6 p.m. ET | Yes, 866-484-3658, customers can call anytime for assistance |
| Pre-Funding Phone Consultation With a Certified Advisor | No | No |
| Online Chat Available | Chatbot only | No |
| Website FAQ section | Yes | Yes |
Fees
Fees are an important starting point when exploring a relationship with a financial institution so you can be sure that you’re getting the value, products, and support needed to drive your desired financial outcomes.
Betterment
Betterment provides two separate experiences with different fee structures. The Investing plan includes digital advice, tax-loss harvesting, automatic rebalancing, and the full suite of accounts and portfolios for a 0.25% annual fee or $4 per month for balances under $20,000 that do not deposit at least $250 per month. The Premium Investing plan is priced at 0.40% annually and includes the Investing plan features plus unlimited communication with a certified financial planner. This additional fee is applied to assets in the investment and cryptocurrency accounts, but not cash accounts. For accounts with at least $2 million, there is a fee discount of 0.10%. Crypto accounts are charged an annual fee of 1% plus trading expenses. Additional costs not included in either plan fee are ongoing ETF fund fees, ranging from 0.05% to 0.13%. It is important to note that you don’t have to opt for premiums at higher balances. You can stick with the 0.25% investing product.
E*TRADE Core Portfolios
E*TRADE Core Portfolios has an annual fee of 0.30% of assets under management. This fee is assessed quarterly based on the average daily balance and is deducted from your cash in the account. The portfolios hold between 1% and 6% in cash so that assets don’t have to be unnecessarily liquidated to pay fees. There are no additional trading fees associated with your account, but there are ongoing expenses for the ETFs that make up your portfolio ranging from 0.05% for the lowest cost to 0.16% for some of the SRI or smart beta funds.
Fees Verdict: Betterment
Both of these robo-advisors offer low fees, but Betterments has a slight edge. The fees at Betterment are balance-dependent, however, so there will be cases in the $500 to $20,000 balance area where E*TRADE Core Portfolios has lower fees if you do not meet Betterment’s $250 monthly deposit.
| Category | Betterment | E*TRADE |
|---|---|---|
| Management Fees for $5,000 Account | $48 ($12.50 if depositing $250 per month) | $15 |
| Management Fees for $25,000 Account | $62.50 | $75 |
| Management Fees for $100,000 Account | $250 (Investing), $400 (Premium) | $300 |
| Termination Fees | $0 | $0 |
| Expense Ratios | Range from 0.05% to 0.13% | Range from 0.03% to 0.16% |
| Mutual Funds | N/A | N/A |
The Bottom Line
Betterment and E*TRADE Core Portfolios both provide strong portfolio management options to help manage your money in a more cost-effective way than traditional solutions. Deciding between the two offerings depends on your goals, investment background, customization preferences, and desire for additional financial guidance. Existing E*TRADE users looking to simplify and automate their portfolio strategy will find a seamless transition when utilizing the Core Portfolios platform. The ability to link other E*TRADE accounts and an excellent mobile experience are other nice features to keep in mind as well.
Even so, Betterment clearly stands out for tremendous goal setting, financial planning, cash management, and portfolio customization functionality. The option to link a wide range of external financial accounts and invest in crypto further enhances the money management tools at your disposal. While the premium tier costs slightly more than E*TRADE’s Core Portfolios, Betterment is the only option with balances below $500 and the standard offering is cheaper at most balance levels. There is a little quirk with Betterment costing more on a $4 monthly charge than E*TRADE Core Portfolios on balances between $500 and $16,000. Overall, however, Betterment provides a cheaper and much more robust platform on your journey towards improving your financial standing.
Is Betterment FDIC Insured?
Your money that is in an investment account with Betterment is not insured by the FDIC. Instead, it’s protected by the SIPC. If you have money in Betterment’s cash reserve account, then it is insured by the FDIC through partner banks. Each partner bank insures your money up to $250,000.
Who Bought E*TRADE?
E*TRADE was acquired by Morgan Stanley in 2020. It was an all-stock transaction.
How We Review Robo-Advisors
Providing readers with unbiased, comprehensive reviews of digital wealth management companies, more commonly known as robo-advisors, is a top priority of Investopedia. We used our 2023 consumer survey to guide the research and weightings for our 2024 robo-advisor awards. To collect the data, we sent a digital survey with 64 questions to each of the 21 companies we included in our rubric. Additionally, our team of researchers verified the survey responses and collected any missing data points through online research and conversations with each company directly. The data collection process spanned from Jan. 8 to Feb. 9, 2024.
We then developed a quantitative model that scored each company to rate its performance across nine major categories and 59 criteria to find the best robo-advisors. The score for each company’s overall star rating is a weighted average of the criteria:
- Goal Planning – 21.00%
- Portfolio Contents – 17.00%
- Portfolio Management – 17.00%
- Fees – 15.00%
- Account Services – 10.00%
- Security & Education – 5.00%
- User Experience – 5.00%
- Account Setup – 5.00%
- Customer Service – 5.00%
Additionally, during our 2023 research, many of the companies we reviewed granted our team of expert writers and editors access to live accounts so they could perform hands-on testing.
Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of the top robo-advisors.
Read more about how we research and review robo-advisors.
The above material and content should not be considered to be a recommendation. Investing in digital assets is highly speculative and volatile, and only suitable for investors who are able to bear the risk of potential loss and experience sharp drawdowns. Digital assets are not legal tender and are not backed by the U.S. government. Digital assets are not subject to FDIC insurance or SIPC protections.