Review of SoFi's Automated Investing Platform

Dec 22, 2023 By Triston Martin

The robot-advisor service offered by SoFi appears to be unmatched, especially for those just getting started. Investing with Vanguard is free, and you have access to free live fiduciary financial advisors and a portfolio full of supposedly low-cost exchange-traded funds (ETFs).

To get started, all you need is one dollar. To be sure, SoFi has only been around for a short time in the world of investing, so it's worth taking a deeper look before you join up.

Who Is a Good Candidate for SoFi Investing?

People who have taken out a loan from SoFi, or who utilize the company's cash management account may be more than willing to hand over their investment portfolios to SoFi. However, if you're a first-time investor looking for a low-cost robot advisor with access to real-life financial consultants, SoFi Invest may be the most enticing option.

It's a unique combo. Suppose you're looking for an automated service that doesn't require any of your involvement. In that case, Vanguard Digital Advisor is an excellent option, but it doesn't include unrestricted access to a staff of trained financial advisors.

SoFi Invest: A Quick Guide

SoFi Invest provides various services, including active trading, retirement savings, cryptocurrency trading, and automated investment. You must select the "automatic investment" option to use the service.

Next, you'll have the option of either a tax-advantaged Individual Retirement Account (IRA) or an untaxed investment account, depending on your needs. There are three options for retired investors at SoFi: the SEP (Simplified Employee Pension) option, which is not available at every Robo-advisor.

Afterwards, SoFi asks you a few simple questions to establish your risk tolerance capacity. Robo-advisors are used to this, but SoFi's queries were disappointing.

SoFi Invest's Money Management Methods

Investing with SoFi Invest is similar to investing with other Robo-advisors. Your funds are invested in an ETF diversified portfolio according to your risk tolerance and time horizon.

SoFi Invest generated an 80/20 stock/bond portfolio for a 35-year-old investor with moderate risk tolerance and a time horizon of five to ten years.

The problem is that it suffers from the same unnecessary syndrome as Betterment and Wealthfront, proposing roughly 10 ETFs for our account when simply three or four would likely be adequate diversity.

SoFi Invest Fees

SoFi Invest is a popular choice with no yearly management charge for many investors. On the surface, this appears to be an excellent alternative to its rivals.

Compared to Vanguard Digital Advisor's 0.15 percent fee on assets under management, Ellevest's lowest tier costs only $12 a year. In addition, those rivals either do not provide access to financial counselors or demand an additional fee for this service.

Free Robo-advisors don't exist, as we've already established. Some proprietary ETFs may be included in SoFi Invest's automatically managed portfolio, even though no yearly management costs are paid with this service.

Advantages of SoFi Investing

SoFi Invest's automated platform has no costs, which is huge. Betterment and Wealthfront charge 0.25% of the money they handle as an adviser fee. Investing $25 off your $10,000 in the stock market saves you $25, but it also invests that money back into the stock market. In this way, you may accelerate your money accumulation.

SoFi financial advisors can answer any questions you may have regarding your financial plan at no additional cost. When it comes to getting started, there is no account minimum, and your initial investment is only $1.

Disadvantages of SoFi Investing

SoFi's lack of costs and user-friendly design may appeal to younger investors. They need to have an open mind when it comes to SoFi. SoFi ETFs, which you can't avoid, should be viewed with caution. Expense ratios may be waived in the short term, but you'll eventually have to pay them.

Due to their lack of assets, they are likely to impose larger fees. It's important to keep in mind that you'll have to deal with those expenses at some point—and you'll probably have to pay them for longer than you anticipated.

Additional Benefits of Investing with SoFi

· Financial Advisors (FA)

SoFi's bevy of fee-free financial experts is at your disposal. Putting your financial interests first, they act as a fiduciary, which means they won't pressure you into making unnecessary trades and try to pitch you on additional goods. There are times when you can arrange a call, but you'll have to be flexible.

· Active Investing at SoFi

Some other Robo-advisors, such as Vanguard, also provide taxable brokerage accounts for customers who want to trade independently. Although this option is less likely to be offered by more startup-like robots like Betterment and Wealthfront, this option's presence should have no impact on your decision to use SoFi as a Robo-advisor.

The Verdict

There is no better fit for current SoFi members that utilize the loan, active investing, or money functions than SoFi Automated Investments.

Beginner investors will love the ease of use of the platform, the instructional programs, and possibly even the extensive phone assistance provided by the service.

In addition, investors of all ages can benefit from the availability of free meetings with Certified Financial Planners. a zero-fee investment manager is hard to match.

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