Betterment Vs. Vanguard Vs. Wealthsimple Comparison

Betterment also offers access to human financial planners for all plans, with varying levels of access.

Betterment Digital clients can text with financial planners, while Betterment Premium clients will benefit from Certified Financial Planners who can offer advice on investments held outside the Betterment platform. The Betterment a la carte financial planning packages are great for low-cost, targeted guidance.

Vanguard begins the client relationship with a human financial planner. All Vanguard Personal Advisor Services clients will have access to a team of financial advisors; however, the real benefits kick in for clients with at least $500,000 under management. Clients at this account level have a dedicated financial advisor for their account.

At higher AUM levels, there’s not a tremendous difference in this realm. Although for US investors seeking financial advising, we’d lean towards Betterment as all of the advisors are Certified Financial Planners, a well-regarded designation.

Click to visit the Betterment website.

Betterment vs. Vanguard vs. Wealthsimple—Tax-Loss Harvesting

Tax-loss harvesting is a near-given with robo-advisors on the market currently. All three of today’s robo-advisors offer tax-loss harvesting, making them virtually identical in this category.

Tax-loss harvesting is a strategy used in taxable investment accounts to offset investment gains with losses and lower overall tax payments.

Betterment offers tax-loss harvesting on their taxable accounts. While tax-loss harvesting is a good strategy for minimizing losses, Betterment claims that their strategy outperforms that of other robo-advisors by one percent.

Likewise, all taxable accounts held through Wealthsimple have tax-loss harvesting. This feature is automatically applied to Wealthsimple Black accounts; other Wealthsimple clients will need to “turn on” their tax-loss harvesting.

Finally, Vanguard Personal Advisor Services offers tax-loss harvesting on a case-by-case basis. One of the benefits of Vanguard’s tax-loss harvesting method is that investors have human financial planner oversight to help navigate the process.

Wealthsimple vs. Betterment vs. Vanguard—Investments

All three robo-advisors offer a diverse mix of investments with a few distinctions for each platform. We are comfortable with each of the robo-advisors investment choices.

Wealthsimple Investments

  • US Stocks
  • US Mid-Cap Value
  • US Small-Cap Value
  • Foreign Stocks
  • Emerging Market Stocks
  • Municipal Bonds
  • US Inflation Protected Bonds
  • USD Government and Corporate IG Bonds
  • High-Yield Bonds

Wealthsimple offers a Halal or Sharia-compliant stock portfolio and socially responsible investment funds.

For Islamic investors, Wealthsimple is the clear choice.

Betterment Investments

  • US. Total Stock Market Stocks
  • US. Large-, Mid-, and Small-Cap Value Stocks
  • International Developed and Emerging Market Stocks
  • US. High Quality Bonds
  • US. Municipal Bonds
  • US. Inflation-Protected Bonds
  • US. High-Yield Corporate Bonds
  • US. Short-Term Treasury Bonds
  • US. Short-Term Investment-Grade Bonds
  • International Developed and Emerging Market Bonds

Betterment also offers socially responsible investing, smart beta strategies and income-only portfolios.

Vanguard Investments

  • Total Stock Market Index Fund
  • Total International Stock Index Fund
  • Total Bond Market Index Fund
  • Total International Bond Index Fund
  • Intermediate-Term Investment Grade Fund
  • Short-term Investment Grade Fund
  • Intermediate-Term Tax-Exempt Fund (for taxable accounts only)

The Vangurd robo-advisor also offers access to dozens of Vanguard fundsincluding niche index and actively managed funds.

We like Betterment’s income portfolio option for investors in retirement or saving for a short-term goal and smart beta is great for those who want to attempt to beat the market.

Depending upon your goals, you might prefer one robo-advisor over the other.

Betterment vs. Vanguard vs. Wealthsimple

image credit; Photo by Anukrati Omar on Unsplash

Betterment vs. Vanguard vs. Wealthsimple—Retirement Planning

Bettterment’s retirement tools are comprehensive. Betterment will strongly appeal to investors who have holdings outside the Betterment platform. All these investments are taken into consideration when your retirement health is calculated.

Both Wealthsimple and Vanguard have limited retirement planning tools. Although financial advisors are available to discuss retirement topics.

Wealthsimple does not include retirement goal-setting tools in their features. Currently, Wealthsimple’s retirement calculator is only available for Canadian clients.

Vanguard’s investment offerings are diversified, lending themselves to a well-rounded portfolio. That being said, they do not offer much in the way of retirement planning outside of conversations with financial planners.

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Disclosure: I have an account with Betterment.

Disclaimer: I am a former portfolio manager, former university finance instructor, and successful investor committed to sharing my personal finance ...

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