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HomeTrading NewsSoFi Automated Investing – Are the Returns Worth It?

SoFi Automated Investing – Are the Returns Worth It?

The SoFi robo-advisor platform seems to have it all – no management fees and just $1 to get started. There are also many features, from access to advisors to various ETFs for portfolio diversity. It seems great, especially for those who don’t have much experience in automated investing. The big question is if it’s worth it. The most obvious way to come to a conclusion is to analyze SoFi automated investing returns.

SoFi Robo-Advisor Returns

Robo AdvisorYear to Date (YTD) to Sept 2020SoFi Automated Investing4.10%

What we can see here is that SoFi does offer a pretty consistent return but it may not be as high as you would think, but it is after fees are deducted.

Just to give you a better idea, we’ve compared SoFi to some of the other big-name robo-advisors out there that we often see here at Modest Money.

What we can see here is that SoFi does offer a pretty consistent return but it may not be as high as you would think, but it is after fees are deducted.

Just to give you a better idea, we’ve compared SoFi to some of the other big-name robo-advisors out there that we often see here at Modest Money.

Robo AdvisorYear to Date (YTD) to Sept 2020Betterment5.49%M1 Finance0.79%Wealthfront-0.30%Wealthsimple5.35%

How Do I Evaluate Robo-Advisor Returns?

In general, we know that robo-advisors are a better option because you’re not paying the salaries of human advisors. In other words, AI is much cheaper. Robo-advisors are usually less risky, and most of your money will be going toward stable ETFs that are also low-cost.

Humans can make decisions on the fly and make appropriate adjustments, while it’s harder for robo-advisors to do that because they work off an algorithm. The sophistication of the algorithm behind your AI advisor will have a big impact on your returns.

It can be difficult to project the success of future performance because the past is not indicative of the future – but it does give you a pretty good idea. We believe the best way to assess a robo-advisor’s performance and possible future returns is to compare it to a benchmark (S&P 500 is a good one).

How often does the robo-advisor fall short, match, or exceed the performance of a long-standing and trustworthy stock index?

You also have to make sure to account for all the fees and deductions before you come to a conclusion. Online investment platforms that offer access to human advisors always make it to the top of our list.

Is SoFi Automated Investing Worth It?

After looking at potential SoFi automated investing returns, are the results worth it?

As we saw, the returns are pretty standard and even a little on the high end when you compare it to some other robo investment platforms. The percentages we presented above are returns after fees.

Wealthsimple and Betterment, two titans in the robo-investing niche, have higher returns, but is that all you should consider?

Let’s compare SoFi with Betterment (which has historically higher returns), against Wealthfront, which is the one offering a negative return.

Although returns with SoFi are lower compared to Betterment, it may even out in the end (depending on your total assets) because SoFi has 0 management fees, but Betterment takes 0.25% annually, as does Wealthfront.

SoFi also doesn’t have an account minimum, so you can go at your own pace, while you need at least $500 for Wealthfront. Betterment also has an account minimum, but $10 shouldn’t make a dent for most people.

Wealthfront is very expensive all things considered, compared to its competitors. However, it does give you a promotion of managing up to $5,000 in assets for free. Betterment’s promotion is up to a year with a qualifying deposit.

What’s awesome about SoFi is you get career counseling and loan discounts with a qualifying deposit, all for FREE. Not only that but there are also no advisory or administrative fees and investors get to pick from a wide range of portfolio options.

Remember when we mentioned that access to real-person advisors gives a platform a higher spot on our list? Well, SoFi qualifies because it gives you unlimited certified financial planner (CFP) access.

We always try to be as unbiased as possible, so we will give you a couple of things to consider when looking at whether or not SoFi automated investing returns are worth the cost.

For one thing, there is no tax-loss harvesting. It may not be a big deal, but it is a feature offered by numerous competitors that is very handy. It’s also quite a new platform, which makes some people skeptical, and this we can understand. There is also an account fee of $75 when you choose to transfer.

The Bottom Line

Is SoFi worth it? Considering everything, which includes the fees and promos, we would definitely say SoFi automated investing returns are definitely worth it. Although the returns may not be as high as some of its more famous competitors, but when you take everything into account, you are getting a pretty good deal. Get in on SoFi’s deal here.

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