SoFi Invest Review 2021: How it Compares, Plus Expert Opinion

In a nutshell: SoFi Automated Investing provides a simple, incredibly low-cost investing platform perfect for beginners and cost-conscious investors. Plus, its $1 minimum makes it easy for anyone to get started.

SoFi’s Active Investing also has commission-free trading, though it does lack some advanced trading features.

Pros:

  • No Management Fees for Automated Investing

  • Access to Financial Advisors

  • Commission Free Trading for Active Investing

Cons:

  • No Tax-Loss Harvesting

  • Only Available in the US

4.7/5

In a nutshell: SoFi Automated Investing provides a simple, incredibly low-cost investing platform perfect for beginners and cost-conscious investors. Plus, its $1 minimum makes it easy for anyone to get started.

SoFi’s Active Investing also has commission-free trading, though it does lack some advanced trading features.

Fees

$0

Account Minimum

$0

Promotion

Pros:

  • No Management Fees for Automated Investing

  • Access to Financial Advisors

  • Commission Free Trading for Active Investing

Cons:

  • No Tax-Loss Harvesting

  • Only Available in the US

If you’ve heard of SoFi but aren’t familiar with everything it has to offer, you may know it for its student loan refinancing services. More recently, the company has expanded its services to offer personal loans, mortgages, and mortgage refinancing.

 

And now, SoFi has joined the ranks of the firms offering automated investing. In addition, it offers active investing for those who want more control. This SoFi Invest review will explore all of that and more.

 

While advanced investors may find it lacks some of their favorite features, SoFi Invest is great for those looking to minimize fees. Plus, if you don’t have much to invest, SoFi isn’t a bad place to start.

What is SoFi? 

Social Finance, Inc. (SoFi) was founded by Stanford business school students in 2011. The company is still based in the area, calling San Francisco its home.

In 2012, it introduced student loan refinancing. Since that was initially the only service the company offered, people equated that with its business. But it offers much more than that. SoFi provides a variety of financial products and wants to help its customers reach financial independence.

It expanded its product line in the ensuing years, added several new services:

  • In 2014, it added mortgages.
  • In 2015, it started offering personal loans.
  • In 2019, it launched SoFi Money and SoFi Invest

As you can see, SoFi Invest is one of its newer products, which is why it may be new. Don’t worry–we’re going to cover all the details in this review. For now, it suffices to say its Automated Investing has no management fees and its Active Investing has commission-free trading.

SoFi says its core values define the company. They include everything from putting members’ interests first to embracing diversity. Basically, they want to do everything they can to keep their customers happy.

SoFi Automated Investing

Management Fees

0.00%

Minimum Balance

$0

Account Types

Individual Taxable, Joint Taxable, Traditional IRA, Roth IRA, SEP IRA, Rollover IRA

Tax-Loss Harvesting?

No

Best For

Passive Investors

SoFi Automated Investing is SoFi’s robo-advisor product. The first thing that may jump out at most passive investors is the lack of management fees. Indeed, SoFi has a 0.00% management fees for its Automated Investing product.

That being said, SoFi’s automated portfolios consist of a variety of ETFs, and each of them comes with their own fees. On the plus side, the expense ratio of the ETFs SoFi uses are quite low. The average ER is 0.05%.

Features

SoFi Automated invest doesn’t have the most extensive set of features, though that shouldn’t be surprising considering it has no management fees. Nevertheless, it does offer access to certified financial planners (CFPs), which is quite impressive.

  • No account minimums
  • $1 to start investing
  • Automatic quarterly rebalancing, plus rebalancing for 5% drift
  • Goal planning, which suggests portfolios to meet your goals
  • Access to free certified financial planners (CFPs)

Auto Invest Portfolios

SoFi Automated Investing offers a total of 10 different portfolios from 13 different asset classes. It has five each for both retirement and brokerage accounts, with five risk tolerances to go with them.

SoFi Automated Moderate Taxable

SoFi gives a nice breakdown of each portfolio as well as helping you understand the rationale behind it. The way the portfolios are laid out make sense in terms of risk/reward.

As you can see, it uses ETFs from different brokerages including Vanguard, iShares, and some of its own ETFs. This helps keep fees low, meaning your fees are extremely minimal overall.

One thing that is important to note is that it is not possible to change your strategy once it is selected. In other words, if you select a conservative strategy for your retirement account, you can’t change it to an aggressive strategy later. So, you need to be sure you pick the right strategy for your account.

Fees and Pricing

As we’ve mentioned, there are no fees for opening a SoFi Automated Investing account. There are no monthly fees, either. The only fee to speak of for these accounts is a $75 fee if you want to roll it over to another institution or close it for any other reason. In addition, ETFs come with fees, but those are charged by the fund itself, not SoFi.

Where Automated Investing Falls Short

Indeed, what you get with SoFi Automated Investing isn’t bad for a free service. The main thing you give up when compared to a robo-advisor like Betterment is tax-loss harvesting. However, Betterment has a 0.25% management fee at its lowest level.

SoFi Active Investing

Trading Commission

$0

Investment Types

Stocks, bonds, ETFs, Crytpocurrency

Account Types

Brokerage Accounts

Fractional Shares?

Yes

Best For

Active Investors

The aptly-named SoFi Active Investing is meant for active investors. In addition, it’s ideal for those who want complete control over their accounts.

There are no trading commissions, once again helping you keep fees low.

Features

Whereas you can only invest in ETFs in an automated account, SoFi Active Investing allows you to buy a variety of different investments. That includes fractional shares, which SoFi refers to as fractional “Stock Bits.”

Active Investing features include:

  • Commission-free trading
  • No account minimums
  • Fractional shares trading (Stock Bits)
  • Ability to purchase cryptocurrencies
  • Access to free certified financial planners (CFPs)

This service is essentially a basic brokerage account that lets you buy a few different types of investments with no commissions. That even includes cryptocurrencies such as Bitcoin and Ethereum.

SoFi Crypto

In addition to crypto, Active Investing allows you to purchase individual stocks and ETFs. Both stocks and ETFs can be purchased using Stock Bits, meaning you don’t have to buy full shares.

Fees and Pricing

Once again, there isn’t much to say here. SoFi Active Investing has no trading commissions, so you can trade for free. And, as mentioned, it also gives you access to CFPs for no fee.

Once again, the only fee is a $75 outgoing fee if you choose to close your account and move your money elsewhere.

Where Active Investing Falls Short

Although Active Invest allows you to do quite a bit without paying a single fee, that doesn’t mean it includes everything. There are several types of assets you can’t trade on the platform, including index funds and mutual funds. Plus, you can’t trade certain niche assets, like futures and forex.

Active Investing also lacks certain advanced features, such as stop-loss orders. Given that this is a commonly-used feature, some active traders may find the platform a bit lacking for their overall needs.

SoFi Invest vs. Vanguard

Vanguard remains something of a benchmark for all types of investors. In many ways, brokerages have used Vanguard as a baseline for their services. And, in many ways, Vanguard is still excellent. So, how does it compare to SoFi?

Vanguard allows you to purchase a wide variety of investments with no fees. Online trades are free, including equities, options, and ETFs. Trades placed over the phone will incur a fee up to $25 (waived if you have $1 million+ in assets).

Although Vanguard remains an excellent broker, there are some things it lacks. While it’s still great for passive investors who just want to buy index funds, it does lack fractional shares.

SoFi Invest, on the other hand, does allow you to purchase fractional shares. Plus, it has no fees for trading or for its robo-advisor, Auto Invest. And you have access to CFPs for no fee.

The closest equivalent Vanguard has to SoFi’s Auto Invest is Vanguard Digital Advisor, but it comes with a 0.10% management fee. If you want access to financial advisors through Vanguard, you’ll have to sign up for Vanguard Personal Advisor Services, which comes with a 0.30% fee.

SoFi Invest vs. M1 Finance

Given that M1 Finance is a more modern brokerage, it’s not a huge surprise that it is a better comparison to SoFi Invest than Vanguard. Indeed, SoFi Invest and M1 Finance are similar, although they do have some differences.

M1 Finance, much like SoFi Invest, has both DIY investing as well as portfolios built by its team of experts. The main difference is that M1 is more flexible. You can add one of its so-called “expert pies” to an existing portfolio, or use it as-is. But you can pick and choose how you want to set it up, unlike SoFi Auto Invest, which locks you in to one strategy.

M1 also has commission-free trading and fractional shares. The main thing it lacks compared to SoFi Invest is access to financial advisors, which it doesn’t offer at all.

For more information about M1 Finance, see our full review.

SoFi Invest is best for those who want guidance in building their portfolio with the absolute lowest fees. In that way, Auto Invest is ideal, especially since it gives you free access to financial advisors.

As mentioned before, SoFi Invest doesn’t give you access to certain investments, such as mutual funds. However, M1 Finance doesn’t have mutual funds either. On the other hand, SoFi Invest allows you to buy cryptocurrency–something M1 Finance lacks.

Is SoFi Invest Right For You?

Without a doubt, SoFi Invest has some excellent features. Its Auto Invest portfolios have no management fees–something you’d be hard-pressed to find elsewhere. Plus, it allows you to buy fractional shares and gives you access to financial advisors for free.

Keep in mind, though, it doesn’t allow you to make changes your Auto Invest portfolio once your account is set up. Another thing that would be nice to see is tax-loss harvesting, although that might be asking too much of a service with no management fees.

SoFi Active Invest lets you buy all the same investments, but you aren’t locked in to a particular portfolio. It also allows you to buy cryptocurrencies and has the same free access to financial advisors.

However, Active Invest doesn’t allow you to buy investments such as mutual funds and index funds–you’re mainly limited to stocks, bonds, ETFs, and crypto. Plus, it lacks certain advanced features other brokers have, such as stop-loss orders.

Overall, SoFi Invest has some nice options, especially for those who just want to invest with the lowest fees possible. Plus, that added guidance of free financial advisors is very nice to have.

To get started, head over to SoFi Invest and start building your portfolio.

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