Like many robo-advisors, Ellevest and Betterment share a lot of elements in terms of how accounts are opened and how the portfolios are populated. One thing that clearly distinguishes Ellevest is that it is designed specifically with female investors in mind and has a goal of closing gender money gaps. We’ll look at how Ellevest and Betterment compare to each other to help you decide which one is the better fit for your money.

  • Account Minimum: $0 for Digital, $50,000 for Premium, $1,000,000 for Private Wealth
  • Fees: 0.25% (0.50% for Premium) annually, assessed monthly. No fee for Emergency Funds
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  • Designed for female investors who can benefit from the service’s razor-sharp focus on gender-specific life and financial goals
  • Ideal for young investors with limited assets who want to look at the program and “kick the tires” with no financial commitment 
  • Great for investors who want the capability to carefully plan and execute multiple life goals
  • Account Minimum: $0
  • Fees: 0.25% (annual) for digital plan, 0.40% (annual) for the premium plan 
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  • Perfect for people looking for simplicity and ease of use
  • Great for those who would like maximum transparency into the assets they are invested in
  • Aimed towards those looking to set and plan for financial goals such as purchasing a home
  • Premium plan is great for people who would like access to a real financial advisor

Goal Setting

Ellevest and Betterment both boast impressive goal-setting tools.

With Ellevest, new clients open accounts by expressing interest in multiple goals that include retirement, down payments, or starting businesses, prompting the system to recommend customized investment plans with portfolios attuned to risk profiles, goals, timelines, target amounts, and assets. Ellevest integrates gender-specific salary curves and life-expectancy data to inform its goal-setting exercises, providing women in particular with a more comprehensive target for things like retirement. You can adjust assumptions and priorities after goals are defined, generating a ‘big picture’ financial view that adjusts for multiple goals and limited resources. 

On the downside, Ellevest did recommend overly-aggressive portfolios for clients over 60, with an unrealistic 20-year time frame for building wealth. Further research found that a similar portfolio was recommended for a potential customer in her 30s, suggesting that programmers need to go back and update algorithms. In addition, there’s no college planning capability, although the titles of defined plan goals include Kids, Home, Emergency Fund, Starting a Business, Big Splurge, and Build Wealth.

For its part, Betterment provides easy-to-follow steps for setting goals and the platform allows each type to be monitored separately. New goals can be added at any time and progress tracked with relative ease. Asset allocation is displayed in a ring with equities in shades of green and fixed income in shades of blue. If you fall behind on meeting goals, the platform encourages you to increase automated deposits. This can be a helpful prompt, especially for young investors who may not feel the urgency to save for longer term goals.

You can easily sync external accounts to portfolios, which can be adjusted or switched directly, or by updating the questionnaire. Betterment takes the external accounts into consideration when charting your progress towards your stated financial goals. On the downside, the excellent free planning capabilities are marred by constant marketing pitches to fund new accounts while speaking to a financial advisor costs between $199 and $299 unless clients upgrade to the costly premium plan.

Retirement Planning

When it comes to retirement, the Ellevest system projects longer life spans for women, encouraging females who are planning for retirement to set aside enough money for those lengthy post-work years. As mentioned, the aggressive approach to retirement planning for older investors lowers trust in the program’s recommendations overall, as it seemingly contradicts Modern Portfolio Theory (MPT). Some of the discrepancy may owe to the longer drawdown period for women, but it still goes against current practice. Clients on the premium plan, which requires at least $50,000 in assets, can speak with a certified financial planner at any time to examine retirement goals.

Each goal with Betterment can be invested in a different strategy so retirement funds can be allocated to one of the higher risk portfolios while shorter-term goals, like funding a down payment, can be allocated to lower risk portfolios. Betterment’s view of your retirement can be more comprehensive than Ellevest's if you sync up your external accounts. This helps provide that big picture overview many people are lacking across all their holdings. The Betterment Resource Center also includes dozens of well-written articles about retirement planning.

Account Types

Ellevest and Betterment both offer the most commonly used account types for individuals. However, Ellevest doesn’t currently offer any joint account types. Ellevest does offer a simplified employee pension (SEP) IRA where Betterment does not. It is difficult to judge a robo-advisor solely on the account types as it ultimately comes down to whether they offer the ones you will actually use.

Betterment account types:

  • Individual taxable accounts
  • Joint taxable accounts
  • Traditional IRA accounts
  • Roth IRA accounts
  • Trust accounts
  • High-interest savings accounts
  • Checking account (starting in September 2019)

Ellevest account types:

  • Individual taxable accounts
  • Traditional IRA accounts
  • Roth IRA accounts
  • SEP IRA accounts

Features and Accessibility

Ellevest and Betterment share a premium feature unlock that provides access to human financial planners. Ellevest’s premium unlock is based on minimum balance and higher management fee, while Betterment’s requires only the higher management fee. Betterment also has a one-off payment option for consulting a planner, which ranges from $199-$299. Both robo-advisors allow you to open an account with minimum capital, letting you review features and the platform with little risk before deciding which feature set you prefer.

Ellevest:

  • Full-featured upgrades: $50,000 for Premium and $1,000,000 for Wealth Services upgrades offer full-featured and high-end options.
  • Financial planning & coaching: Clients can speak with certified financial planners at any time on the Premium and Private Wealth plans.  
  • Gender-focused Investing: The advisory service is geared specifically towards the needs of female investors at all ages and asset levels.

Betterment:

  • Free financial planning tools: The prospective client gets a free and comprehensive analysis of all current investments prior to funding an account.
  • Portfolio and goal flexibility: A mature platform provides coaching and other goal planning resources while the account interface supports impressive portfolio flexibility.
  • Premium plan: The client can speak with a financial advisor at any time for free on the premium plan, which charges a 0.40% management fee rather than the standard 0.25% fee.

Fees

Betterment and Ellevest have nearly identical fee structures at the basic level, and the underlying exchange-traded fund (ETF) fees are also comparable.

Betterment’s clients pay a 0.25% management fee per year, increasing to 0.40% for the premium plan. Betterment offers a discounted fee on assets over $2 million, dropping to 0.15% per year on the portion that exceeds $2 million. ETFs used to populate portfolios incur low annual fees that average between 0.07% and 0.15%.  

Ellevest charges an identical 0.25% fee, rising to 0.50% for the Premium plan, which requires assets of at least $50.000. They also offer a Private wealth plan for assets above $1,000,000. Clients don’t pay trading costs but have to pay ETF expense fees that average between 0.06% and 0.16% for core portfolios, and 0.18% and 0.25% for ‘Impact’ portfolios.  

Minimum Deposit

Ellevest and Betterment require no minimum deposits, allowing you to test drive both services without committing.

  • Ellevest: $0.00
  • Betterment: $0.00

Portfolios

The traditional Ellevest portfolio tracks typical Modern Portfolio Theory (MPT) specifications that include:

  • Diverse asset allocation
  • Investing for the long-term
  • Risk-centered goal-based portfolios
  • Gender-focused investment recommendations
  • Realistic forecasts using Monte Carlo simulations
  • Conservative portfolio management

Ellevest clients can choose between traditional or Impact portfolios, which are partially invested in impact-focused ETFs and mutual funds, including iShares MSCI USA ESG Select ETF and the Pax Ellevate Global Women’s Leadership Fund. Portfolios are monitored and rebalanced after straying from thresholds that are goal- and horizon-specific. Rebalancing algorithms seek to control portfolio risk rather than track specific asset allocations, in a variation not found at most rivals.

Betterment offers five portfolio types that are also based on MPT principles and/or specific investment themes:

  • Standard portfolio of globally diversified stock and bond ETFs
  • Socially responsible portfolio comprised of holdings that score well on environmental and social impact (note: investments may not meet standard requirements for this theme)
  • Goldman Sachs Smart Beta portfolio that seeks to outperform the market
  • Income focused all-bond portfolio made up of BlackRock ETFs
  • “Flexible Portfolio” constructed from the standard portfolio’s asset classes but weighted according to user preferences

Betterment accounts are rebalanced dynamically when they deviate from their intended goal allocations. In addition, the portfolio gets more conservative as the target date approaches, with the goal of locking in gains and avoiding major losses. Clients will appreciate this automated reallocation because most investors don’t have the time or dedication to implement these profitable techniques on their own. 

Broker Assets

Ellevest populates portfolios with ETFs from Vanguard, iShares, Schwab, as well as Pax-Ellevate and Access Capital mutual funds (for Impact portfolios). Betterment portfolios contain ETFs from iShares, Vanguard, and other well-known fund companies but no individual stocks.

Tax-Advantaged Investing

Instead of tax loss harvesting services, Ellevest applies a ‘tax minimization methodology’ that features tax-efficient muni bonds while rebalancing to maximize taxable losses and to minimize taxable gains. Betterment taxable accounts at all funding levels benefit from a more traditional service, in which the impact of capital losses and wash sale rules is considered before securities are sold.

Security

Ellevest and Betterment’s sites both utilize heavy-duty 256-bit SSL encryption. Apex Clearing Corp handles Betterment client funds, providing access to Securities Investor Protection Corporation (SIPC) insurance and private excess. Ellevest carries SIPC and excess insurance that covers up to $10 million per customer. Fingerprint, face recognition, and two-factor authentication are available on Betterment iOS and Android apps as well as Ellevest iOS apps.

Customer Service

Betterment enjoys a slight edge in customer service as live chat is built into the website and mobile apps for clients to access at any time. Customer service is available by e-mail and phone from 9:00 a.m. to 6:00 p.m. Monday to Friday, and via e-mail from 11:00 a.m. to 6:00 p.m. on weekends. Phone calls to customer service during market hours averaged a relatively slow 2:21 minutes to talk with a knowledgeable representative.

Ellevest has discontinued online chat capability and the majority of current assistance is provided through FAQs, or by calling customer support. Service hours are listed as 9:00 a.m. to 6:00 p.m. Monday through Friday and several calls during market hours were answered quickly by knowledgeable representatives.

Our Take

Choosing between Ellevest and Betterment solely on the basis of goal planning, portfolio management, account services, fees and customer service ultimately goes in favor of Betterment. Betterment has a smoother account set-up, more robust goal setting, and excellent automated portfolio management all for a very low fee. However, Ellevest is not marketing itself as being the best overall robo-advisor for everyone. Ellevest does welcome all comers, but it is primarily aimed at women. Moreover, Ellevest is fee-competitive with Betterment and not far behind in most categories, although we still feel that the portfolio recommendations tend to be too aggressive for older investors. That being said, women may find Ellevest more welcoming and relevant than Betterment in many ways that aren’t specific criteria for our reviews. For the average investor, however, Betterment provides excellent goal planning and superior portfolio management that Ellevest can’t quite match.

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Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of robo-advisors. Our 2019 reviews are the result of six months of evaluating all aspects of 32 robo-advisor platforms, including the user experience, goal setting capabilities, portfolio contents, costs and fees, security, mobile experience, and customer service. We collected over 300 data points that weighed into our scoring system.

Every robo-advisor we reviewed was asked to fill out a 50-point survey about their platform that we used in our evaluation. Many of the robo-advisors also provided us with in-person demonstrations of their platforms.

Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking robo-advisor platforms for investors at all levels. Click here to read our full methodology.