SoFi Automated Investing Review
Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice, and in 2017 he received the SABEW Best in Business Award.
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SoFi (short for "social finance") has created quite a buzz in the lending world with its customer-focused approach to personal loans and more.
In addition to its lending business, SoFi has built an impressive investment platform, SoFi Invest. This offers customers the ability to invest in stocks, mutual funds, ETFs, and even cryptocurrencies. For investors who prefer to keep investments on autopilot, SoFi also offers its Automated Investing platform.
In this review, we'll take a deeper dive into SoFi Automated Investing and look at the pros and cons of this robo-advisor platform.
Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
With no management fee or account minimum, anyone can get started with SoFi Automated Investing.
$0 per trade, expense ratio 0.03%-0.08%
Low cost: SoFi Automated Investing is one of the lowest-cost robo-advisor platforms. The company charges no management fee, and has no account minimum -- investors can get started with $1. The underlying investment funds have their own expense ratios, but these range from 0.03%-0.08%, which is among the lowest for any ETFs. There are also no fees for money transfers, and you won't pay anything to set up or maintain your account. If you choose to use SoFi's investment platform for active investing (for example, to buy a specific stock), you won't pay any trading commissions.
Access to human advisors: Many robo-advisors don't offer access to human financial advisors, and those that do tend to limit access. SoFi Automated Investing customers get unlimited access to financial advisors. Not only that, but all of SoFi's advisors are registered investment advisors and are bound to the fiduciary standard, which means they are required to put your best interests first.
Disconts on other SoFi products: SoFi Automated Investing customers who make recurring deposits of $20 or more get interest rate discounts on other SoFi products, such as personal loans and mortgages. Qualifying clients also get free career coaching and access to SoFi member events.
What could be improved
No tax-loss harvesting: Tax-loss harvesting is a strategy by which certain losing investments are strategically sold in order to offset taxable gains elsewhere in a portfolio, thereby lowering the amount of tax owed. SoFi doesn't offer tax-loss harvesting service, a potentially large drawback for investors with large accounts, or who are otherwise in high tax brackets.
How SoFi Automated Investing works
In addition to standard brokerage accounts, SoFi Automated Investing offers IRAs (traditional and Roth) and allows clients to roll existing retirement funds from former employers into their new accounts. Clients can access accounts through SoFi's online portal, or through its user-friendly mobile app.
SoFi Automated Investing customers can choose from 10 investment portfolios offering a variety of risk levels and investment goals. If you aren't sure which one to choose, don't worry -- you can answer questions about your financial goals, current assets, and income, and SoFi will do the rest. As with most robo-advisors, the portfolios are composed of exchange-traded funds, or ETFs, that offer stocks, bonds, and other asset classes. Unlike many competitors, SoFi uses some proprietary ETFs in its Automated Investing portfolios, another way it keeps expenses low.
SoFi Automated Investing offers automatic rebalancing, which means that your investments are automatically adjusted on a regular basis to maintain your desired risk level and investment goals. For example, if your portfolio contains a 50% stock and 50% bond mix, and the stock market rises dramatically, SoFi automatically re-adjusts your investments to maintain this mix.
SoFi investment customers also have access to a high-interest savings account, which pays an APY on cash balances that varies over time, but rivals some of the best online savings account providers.
SoFi is well-known for its outside-the-box approach to financial services. Automated Investing clients who invest at least $20 per month get access to some unique and valuable perks, such as free career coaching, in-person member events, and more.
Pricing and fees
SoFi Automated Investing is among the cheapest robo-advisor platforms. With no account management fees and minimal investment expenses, investors keep more of their returns than they would with some of SoFi's rivals.
|Service/Item||SoFi Automated Investing Cost|
|Account management fee||0%|
|Investment fund fees||0.03%-0.08%|
|Other account charges||None|
Customer service and support
There are two types of support that clients of a robo-advisor could need -- investment advice and help with technical issues. We already mentioned that SoFi customers get unlimited access to human financial advisors, and they can schedule appointments via phone or video Monday through Friday, 10a.m.-7p.m. EST.
For technical support, SoFi's help desk is available Monday-Thursday, 7a.m.-midnight EST, and Friday-Sunday, 7a.m.-8p.m. EST.
Alternatives to consider
There's no perfect robo-advisor for everyone, and there are alternatives that could be better for certain investors. With that in mind, if you have at least $5,000 to invest, Schwab Intelligent Portfolios could be a good alternative to SoFi, with some features you won't find in SoFi's Automated Investing platform. Better yet, check out our best robo advisors and compare SoFi with even more alternatives.
|SoFi Automated Investing||Schwab Intelligent Portfolios|
|No account minimum||$5,000 account minimum|
|0% management fee||0% management fee|
|No tax-loss harvesting||Free tax-loss harvesting|
|Customer service 7a.m.-midnight EST Monday-Thursday, 7a.m.-8p.m. EST Friday-Sunday||24/7 customer service|
SoFi Automated Investing is right for you if:
- You want an automatic investment service with a bare minimum of expenses.
- You want access to human financial advisors whenever you need it.
- You're already a SoFi lending customer, or are considering taking out a personal loan or mortgage.
- You aren't too concerned with tax strategies on your investments.
- You're a newer investor with little up-front capital to contribute.