SoFi has excellent financial products, access to a broad market, and zero account management fees for your robo-advisor. That being said, they could be a little more transparent on what they do with your data.
Key Takeaways
- Customer Service: Service by phone during the week, even into late hours, with great agents that actually know what they’re talking about.
- Best App Around: A lot of financial apps tend to skip customer experience, but SoFi made the best and most accessible app out of any robo-advisor service we’ve ever reviewed.
- Sync Investing: You can sync other accounts to pull in more data about your investments, and keep the feed of information flowing for your robo-advisor.
- Can’t Store Cash: You can’t put liquid cash in your portfolio, so while there’s no interest paid on something that doesn’t exist, most institutions only pay a fraction of a single percent anyway, so it just keeps your portfolio cleaner.
Pros & Cons
SoFi Automated Investing is known for their low-price ETFs and an insane management system that comes at no cost to you. But is that enough to earn your business?
We’ve heard a mixed bag of reviews over the years, so now it’s time to investigate, find out what makes SoFi one of the best automated investing tools, and whether or not you should trust them to be your robo-advisor.
In our SoFi Automated Investing review, we’ll discuss everything about how their financial systems work, and whether or not they’re an option for you based on your financial goals and investing habits.
About SoFi Automated Investing
Founded in 2011, SoFi Automated Investing has become a one-size-fits-all institution in most regards. With an impressive revenue stream that outperforms itself year after year, a 1.25% APY for direct deposit, and recently going public in June of 2021, SoFi continues to outperform their competitors.
Headquartered in San Francisco, CA, they own SoFi Securities LLC, Technisys P.A., 8 Securities Limited, and at least 7 other subsidiaries.
Utilize retirement accounts, automated investing, crypto, and active investing while loading cash into your SoFi debit card and receiving cash back.
SoFi seems to have a little bit of everything to offer their clientele, including fractional share purchasing, zero-commission stock trades, and a ridiculously low $5.00 minimum to fund your account in the beginning.
Overall, SoFi offers many of the financial vehicles that traditional banking institutions do, but from the comfort of a new-world perspective that doesn’t try to nickel-and-dime you at every turn.
Services
- FDIC Insurance: This is standard practice, right? We’re listing it because they went above and beyond to insure $1.5M worth of your deposits.
- Debit Card: Access 55,000 free ATMs across the United States while having cash at-the-ready in your debit card.
- Direct Deposit: Auto-deposit at least $500 per month and you’ll receive cash back on your debit card at 0.25% interest rate (paid to you).
- Vaults: A way to save with a goal-based system to help you track your money and keep more of it.
Pricing
- Zero Commissions: Buy, sell, and trade stocks with direct investing or a robo-advisor with no fees whatsoever.
- Transfer Fees: A full outgoing transfer for your account is $75, which is insane. They want you to keep that money on the platform.
- Savings Interest Rate: Yes, they offer a cash management account interest rate of 0.25%.
- Loan Interest: This varies as the company changes practices. SoFi loans tend to be about 125% of the initial loan price, so a $100 loan would be $125 to repay it, and so on.
Who is SoFi Automated Investing Best For?
Anyone who hates fees. Specifically, SoFi’s automated investment tool charges zero account management fees, putting more money back in your pocket when your investments pan out.
SoFi is great for a newcomer who wants a trustworthy robo-advisor to make their investments for them, however you do have to be careful about their data policies as we list later on.
Essentially, you can utilize their free financial products and benefit, or explore their interest-based financial products that earn them money, but still come at a great cost reduction compared to other similar companies.
Compare to Other Advisors
SoFi Automated Investing FAQ's
Yes, SoFi has been around since 2011 and continues to help investors, and have reported over $1B in revenue in the year 2021, which is up 64% over their previous year.
Despite being in business for 11 years at the time of writing, they’ve only recently become prominent in the eyes of investors, and have otherwise taken a back seat while brands like M1 Finance and Betterment took off.
However, the result is that SoFi grew more financial products and financial vehicles than their competitors in a similar time frame, leading to more products and an overall larger boom in investments than their competitors by this point.
Yes, they’re good for beginners because of the free management, financial advisor access, and of course the robo-advisor program.
However, because they offer a lot of financial products, it’s important to know that they can be overwhelming to beginners if they try to take on all of that information at once and get a little lost in the fray.
SoFi doesn’t exactly guide you based on your investment experience level, so you have to navigate on your own, often to your own.
SoFi makes money through student loan refinancing, personal loans, home loans, and personal loans. Reasonably, they make money off of the interest generated from those loans.
They also make money by selling loans or making origination fees when a borrower takes out a loan in the first place. Additionally, their investment products such as SoFi Crypto, ETF programs from SoFi Gig Economy to SoFi Next 500, and more.
Last but not least, they earn interest on money inside of the cash accounts they hold, as well as vendor/merchant card transaction fees.
While SoFi certainly has the BBB’s trust, their privacy policy states pretty standard stuff about sharing your information with third-party providers to actually conduct their business.
However, at no point do they exclusively state “We do not sell your information” or anything of the sort. In fact, in all 94 times that they mention information in their privacy policy, they don’t talk about selling, renting, or leasing information at all.
It’s a “proceed with caution” word of warning from us.
SoFi Automated Investing
SoFi aims to understand your investment goals from the start, and then automates the investing needed to get there.
- SoFi Automated Investing
- Rating:
- Reviewed by:
Review Summary:
SoFi aims to understand your investment goals from the start, and then automates the investing needed to get there.
