Sofi is a reputable online lender and financial services firm that offers tech-savvy solutions for online loans and investing. In 2017, Sofi launched its robo-advisory service, focusing on low-cost ETFs and automatic management.
Sofi is unique in the industry since it does not charge an annual management fee for its robo-advisory service, and also gives clients access to Certified Financial Planners™ for no additional charge.
Sofi Automated Investing Overview
No annual management fee
$75 to transfer funds out
Access to Certified Financial Planners™at no additional fee
|Expense Ratios||0.00% to 0.19%, depending on funds selected|
ETFs in over a dozen asset classes
10 portfolio choices based on risk and account options
|Investment Account Options||
Taxable brokerage accounts
IRA, Roth IRA, Rollover IRA
|Portfolio Construction||Automatic portfolio rebalancing on all accounts|
|Tax Strategy||Access to municipal bonds|
|Customer Service and Support||
Phone, live chat, and email support, Monday - Thursday, 8am to 8pm EST, Friday 8am to 7pm ESTAccess to Certified Financial Planners™
Mobile apps available
Website is mobile-friendly
Simple account setup, all done online
Sign up for free with your email address, provide personal information and goals, and fund the account for as little as $5
|Security||Bank-grade data protection, two-factor authentication
|Ease of access
SoFi offers a simple mobile app and full-featured website with a customer dashboard
What is Sofi Automated Investing?
Sofi started in 2011 as a student loan provider and has since expanded to offer a wide range of banking and investments products, including personal loans, bank accounts, credit cards, and even the ability to invest in crypto.
Sofi Automated Investing is a robo-advisory service that uses advanced algorithms to build investing portfolios and manage client investments automatically.
How Sofi Automated Investing Works
Sofi Automated Investing uses a simple onboarding process which has users input their personal information, including age and value of current assets, as well as their investing goals. It then offers a selection of different investment portfolios, ranging from conservative to aggressive.
Once a user chooses an investment portfolio, they can connect their bank to fund the account. There are several account types available, including taxable brokerage accounts, IRAs, Roth IRAs, 401(k), and rollover IRAs.
After the account is opened and funded, Sofi automatically manages the account, splitting investments between a selection of low-cost ETFs, offering broad diversification with low fees.
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Here are some of the features that make Sofi Automated Investing one of the best robo advisors available today:
No Management Fees
Sofi Automated Investing has positioned itself as one of the best values in the robo-advisory space by not charging any management fees. While most other services charge 0.25% (or more), Sofi allows users to sign up and invest as little as $5, and charges no annual fees.
Sofi does offer its own ETFs as part of the recommended portfolios, so it makes money through the underlying investments of the robo-advisory service. These funds may come with a higher expense ratio than other ETFs.
Multiple Investment Choices
Sofi offers 10 different portfolio options based on a user's age and goals. Portfolios range from conservative to aggressive, with the latter offering a higher percentage of the portfolio in equities.
Portfolios are made up of only low-cost ETFs, in asset classes such as stocks, bonds, international and emerging markets, and treasury bonds.
While Sofi Automated Investing will recommend a portfolio option when you sign up, you can choose your own portfolio option, or speak with a Certified Financial Planner™ for more guidance on an investing strategy.
Access to Certified Financial Planners™
Speaking of financial advisors, Sofi Automated Investing is one of the only robo-advisory services that gives users access to a Certified Financial Planner™ at no additional cost.
These advisors can help with financial planning, including debt payoff strategies, savings goals, and answer any investing questions you may have. CFPs® are available by phone, email, online chat, or even video chat.
Free Career Coaching
Customers who invest at least $20 per month with Sofi Automated Investing have access to complimentary career coaching, which can help users negotiate a pay raise, find job offers, or simply have their career questions answered. This is another unique offer from Sofi, which is not only available to Sofi Automated Investing customers, but anyone who regularly contributes to a Sofi investment account.
Sofi boasts a robust goal-setting tool within its platform, allowing users to pick financial goals and time frames, and start investing toward those goals. Certified Financial Planners™ are also available to discuss how to hit these goals, and offer advice on how each goal fits together in your overall financial picture.
Sofi offers invite-only events and talks, as well as special rates on its loan products to existing customers. This can save users money, and give them access to more financial education.
Who Sofi Automated Investing is Best for
Sofi Automated Investing is designed for beginners who want hands-off investing to pursue long-term goals. With no management fees and access to broadly-diversified ETFs, Sofi offers a simple way to automatically invest toward retirement. It is also a great option for those looking to get better rates on loans since clients can get special discounts on Sofi’s lending products.
It’s user-friendly mobile app and client dashboard helps visualize progress toward longer-term financial goals, and access to Certified Financial Planners™ gives peace of mind that you can have all your financial questions answered.
How to Get Started
To get started with Sofi Automated Investing, users can sign up for a free account and deposit as little as $5. There are no annual fees involved, and with fractional shares available, users can start small and increase their contributions over time.
If you have any questions during the signup process, Certified Financial Planners™ are available by phone to answer any questions you may have.
Is Sofi Automated Investing Legit?
Yes. Sofi has been around since 2011, and now has over $500 million in assets under management. Sofi also offers bank-grade security, two-factor authentication, and both FDIC and SIPC insurance for its bank and investment accounts.
While it doesn’t charge any fees for its robo-advisory platform, Sofi does make money by including its ETFs as part of the portfolios. It also advertises its lending and banking products to customers, which is another way Sofi makes money.
Pros and Cons
- No management fee
- Free access to Certified Financial Planners™
- Multiple portfolio options
- Automatic rebalancing
- No tax-loss harvesting
- Sofi sponsored ETFs may cost more than other ETFs in portfolio
Sofi Automatic Investing Alternatives
While Sofi Automated Investing is a great option for those who want low fees and low minimum investments, they may not be the best fit for everyone. Here are a few other robo-advisory options that may work better for you:
Betterment is a long-standing robo-advisory service that offers a wide range of investment options, including socially-responsible investment (SRI) portfolios. Betterment charges a 0.25% management fee, but also has more advanced features such as tax-loss harvesting and smart beta portfolios. Betterment is a great option for both beginners and mature investors since it offers comprehensive goal-setting tools and a large selection of low-cost ETFs.
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Wealthfront is one of the top robo-advisory services available, offering a huge selection of ETFs in multiple asset classes and sectors, as well as advanced goal-setting and financial planning tools through its mobile app. Wealthfront also charges a 0.25% management fee, but its ETFs are very low-cost, and Wealthfront offers some of the best tax strategies available for robo-advisors. Daily tax-loss harvesting, direct indexing, and direct import to Turbotax make Wealthfront a smart choice for tax-conscious investors.
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Schwab Intelligent Portfolios
Schwab Intelligent Portfolios is another no-fee robo-advisory service that offers access to over 50 low-cost ETFs in over a dozen asset classes and sectors. Though some of the ETFs are Schwab-managed, the fees are much lower than some of the Sofi ETFs. Schwab also offers access to licensed financial planners, but it requires a one-time fee and monthly cost for a Premium account. Schwab is a decent alternative for free investing management, but it’s expensive to gain access to a financial advisor. Schwab Intelligent Portfolios also have an unusually high allocation to cash.
Overall, Sofi Automated Investing is a great option for beginner investors who want a hands-off approach to investing toward long-term financial goals (like retirement). Its bonus offers of discounted loans, free career coaching, and access to Certified Financial Planners™ makes Sofi Automated Investing one of the best robo-advisory values available today.
Sofi does use its own ETFs in the automated portfolios, so watch out for higher fees on some of them, but clients may also qualify to have those fees waived, making them a cheaper option than most other funds.
Overall, Sofi Automated Investing is our top pick for free financial advice, as well as the low minimum investment of $5. For beginners who are just wading into the waters of investing, it’s a great fit.
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