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SoFi Wealth Management Review

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by Emily Zhu Updated
SoFi Wealth Management

SoFi has already made a name for itself in the student loan refinancing, mortgage and personal loan fields. Now, it’s expanding into the wealth management field, with an approach defined as “powered by technology, guided by advisors.” 

By creating a robo-advisor service with access to live advisors, SoFi Wealth Management values smart investing at an affordable rate. Its company diversification in different fields allows it to offer low rates for high-quality service. The convenience of an online service combined with the help of qualified financial makes the jump into investing easier.

In case you’re unfamiliar with the term, robo-advisors are companies which offer online investing accounts and advice. They’re an affordable alternative to expensive financial advisor firms. These services are typically online or mobile, making robo-advisors useful and accessible. 

Best for

Current SoFi users; Investors who want both a human and robo-advisor; Starting investors with a low minimum deposit

Drawbacks

SoFi Wealth Management doesn't offer direct indexing, which minimizes taxes on taxable accounts; for high investors, this can result in lower returns

Pricing: How Much Does SoFi Wealth Management Cost?

Option Name Management Fee Minimum Balance Features
SoFi Wealth Management 0.25% $100 No management fee for deposits under $10,000

SoFi Wealth Management

Management Fee
0.25%
Minimum Balance
$100
Features
No management fee for deposits under $10,000

SoFi’s low and competitive fees makes its service a viable option for starting investors. If you’re investing under $10,000, there is no fee. Once you go above $10,000, there's a relatively low rate of 0.25%.

These affordable fees make it easy for someone to invest without the exorbitant fees. There are also no trading, transfer or commission fees. You’ll have to pay the fees that come with the investments in exchange-traded funds (ETFs), but these are typically low. These low costs help maximize your return rates, without having to spend extra money.

If you’re an existing customer, there is no management fee regardless of your balance. This fee and the preexisting relationship with the company helps make the transition from borrowing with SoFi to investing with them easier.

SoFi Building

SoFi Wealth Management’s Investing Strategy

Investment portfolios are made up of ETFs. ETFs are a popular and affordable way to investment. They represent different groups of investments, or asset classes, and works like a mutual fund with lower taxes. SoFi invests primarily in passive assets. These assets are stable, rarely straying from the base index. They offer lower returns, but also have lower fees.

The company works with over 20 different asset classes, with a variation of bonds, stocks and other investment indexes. This variety creates personalized and diversified investment portfolios. Investing in multiple different assets helps maximize gains and minimize losses. In the case that one investment has a bad week, you’ll still get some return from your other investments.

These investment portfolios are based on your age, income, assets and risk tolerance. SoFi also takes your savings goals into account when creating these portfolios. It offers a risk simulation calculator to help you understand your portfolio further. If needed, changing your risk tolerance will alter the portfolio and timeline to reach the goal.

The portfolio is looked at monthly or quarterly, depending on whether your investment values have shifted from your original investment portfolio. If they have, this triggers an automatic rebalancing of your portfolio. The mix of ETFs in your portfolio are adjusted based on your risk tolerance and their value.

For example, if your preferred portfolio sits at 70% stocks and 30% bonds, SoFi will keep the investment funds at those levels. If the stocks go above 70%, some will be sold and more bonds will be bought to rebalance the portfolio. This prevents any panic if the high-value assets suddenly drop. Rebalancing means that risk factors are kept low.

SoFi monitors the market and offers projections of different ETFs to see how they’ll perform. This long-term oversight allows you to accurately gauge your progress with your portfolio. These portfolios are personalized to you and are made to best help your goals.

Supported Accounts

  • Traditional IRA
  • Roth IRA
  • SEP-IRA
  • Rollover IRA
  • Taxable Individual Accounts
  • Taxable Joint Accounts
  • Long Term Investing
  • Stock Diversity

Unsupported Accounts

  • 401(k)
  • 529(b)
  • Trust

Key Features

When investing with SoFi, its personalized portfolios are meant to work with your financial background and risk tolerance. This attention to the investor makes this robo-advisor a good choice for those who are just starting out in investing. Automatic rebalancing and market projections set you up for long-term investing.

The company's qualified and licensed advisors are also there to help. They are meant to work in your best interests and answer your questions at no extra cost. This helps the transition into the investing world easier.

Available Features

  • Mobile App
  • Auto Deposits
  • Single Stock Diversification
  • Portfolio Rebalancing
  • Fractional Shares
  • Human Advisors
  • Fraud Protection

Unavailable Features

  • Direct Indexing
  • Tax-Loss Harvesting

Who SoFi Wealth Management Is For

If you’re a current user of the company's other services – in loan refinancing or mortgages – then investing with them may be more beneficial than investing with others. There is no management fee for their current borrowers. You’ll get quality service at no cost.

This is also a good choice for beginning investors. They have many of the services that other robo-advisors provide, along with access to live advisors. With this combination, you’re able to get both a personal and hands-off experience. You can invest long term, while learning more about the field.

To help you decide whether SoFi is right for you, it offers a free consultation with an advisor, during which you can learn more about the services and decide if they fit your needs.

How SoFi Wealth Management Works

 

To create an account, all you’ll need is $100. Then, you share your age, income, assets and financial goals. Your investment portfolio will come together based on these factors. The risk level can be adjusted at any time to alter your investment portfolio and timeline. Generally, a longer timeline can afford higher risk.

Then, you’ll be able to open your account and deposit funds from your bank account. Once the account and bank is authorized, you can start investing.

SoFi Manage Money

 

As you continue to invest, your portfolio’s progress and projections are monitored. The portfolio changes based on how the current investments are doing. If the investment values stray away from your portfolio, it will automatically be rebalanced.

With a straightforward start process, SoFi offers a quick and easy way to get into investing. The automatic portfolio rebalancing and personalized investment mix allows for a hands-off approach to investing. And if you have any questions or want to learn more, the live advisors are there to help.

What’s the Catch?

SoFi generally offers low fees, but those who benefit the most are current users. If you’re an existing borrower, you’ll be able to use the service at no extra fee. Otherwise, if you’re a big investor investing over $10,000, you’ll be subject to the 0.25% management fee. You get best deal if you’re either investing under $10,000 or are a current borrower.

Unlike other robo-advisors, SoFi doesn’t offer direct indexing or tax-loss harvesting. These features minimize the money lost to taxes, maximizing your returns. So if you’re investing a large amount of money, you’ll still be subject to these taxes.

In addition, because SoFi offers other services, its website isn’t dedicated to just its wealth management sector. This means that finding specific information on the side can be difficult. For someone who just use the investing services, the other resources and information provided can prove to be overwhelming.

SoFi Investment Chart

 

 

Competition: How SoFi Wealth Management Stacks Up

SoFi Wealth Management offers competitive prices and services. Its fees are much lower than traditional advisors, whose rates could go as high as 1.50%.

When it comes to having both a robo-advisor and live advisor service, SoFi isn’t the only company to offer this. With no account minimum and tax-loss harvesting, Betterment can also provide high returns on investments. But it’s at a higher cost, with a management fee of 0.25% - 0.40%.

Wealthfront’s prices rival SoFi. Its fee is 0.25%, with a slightly higher minimum account deposit of $500. It also offers tax-optimized investing and more account options available, but don’t have a live advisor service.

Schwab Intelligent Portfolios has no management fee, regardless of the minimum balance. It also offers diverse asset classes for investment. But it has a higher minimum deposit of $5,000, which isn’t as financially accessible as SoFi’s $100 deposit.

Overall, SoFi offers high-quality service at low fees. With the combination of live advisors, diverse investment portfolios and affordable costs, it is strong competition for other robo-advisors in the field.

 

Robo-Advisor Management Fee  Minimum Balance  Best For
0.25% of balance above $10,000; no fee for SoFi borrowers $100
  • Current SoFi users
  • Investors who want both a human and robo-advisor
  • First-time investors with a low minimum deposit 
 
  0.25%   $500
  • Investors looking to minimize fees 
  • Investors who don’t need a human advisor
 
  0.25% - 0.40%  $0 
  • First-time investors with low savings balances
  • Goal-based investors
 

 

Bottom Line: Should You Use SoFi Wealth Management?

SoFi has been in the finance industry for years now but is new to the wealth management field. In a short amount of time, it has managed to attract attention for its low fees and great service. The company provides technological tools, while offering a personal touch. You learn more about investing through a hands-off approach. For those just starting out in investment, this could be a good option for you.

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