After years as a student loan lender and depository institute, SoFi has taken its next step toward becoming a full-service financial institution.
The financial company now offers robo-advisor portfolios with access to human advisors with low costs, and major benefits through its SoFi Automated Investing product. Should you use it?
We dug in to explain the perks and where the service may fall short for some investors. However, with their free pricing, SoFi Automated Investing is already on track to become a leader in the space.
See how they compare to the cheapest investing platforms here.
- No advisory fees
- Automated investing in low-cost funds
- Free access to financial advisors
SoFi Automated Investing Details
SoFi Automated Investing
Taxable, Traditional, Roth, and SEP IRA
Open An Account And Get A Prize Of $5 To $1,000
What Is SoFi Automated Investing?
SoFi Automated Investing is a no management fee “robo-investor” that helps customers create and maintain low-cost, diversified portfolios of ETFs (that track stock and bond indexes). It offers joint and individual accounts as well as traditional, Roth, and SEP IRAs (for investors who qualify).
SoFi has no investment minimum which makes it significantly more accessible than Wealthfront which has a $500 minimum. Plus, SoFi has announced that they won't be charging management fees at all! A huge savings compared to the competitors.
What Does It Offer?
Since most robo-advisors offer relatively similar investment strategies, picking a “best” robo-advisor can be challenging. The following are a few unique benefits of investing with SoFi (compared to investing with other automated investing platforms).
Free Access To Financial Advisors
SoFi investors can get unlimited advice from a financial advisor. I suspect that this benefit will be underutilized by SoFi’s investors, but I think the value proposition is amazing.
Most “DIY” investors believe that an investing algorithm will work just as well as a human financial advisor. However, a huge portion of wealth-building and investing success is about behavioral change. These financial advisors should be competent in helping investors balance their short- and medium-term financial goals (funding a wedding, buying a house, taking a big trip) against long-term goals (such as funding college for kids or retiring).
A note about their financial advisors that is especially compelling:
a) They are all CFP professionals
b) They are held to the standard of being fiduciaries (from their FAQs: This means they are held to a fiduciary standard and are required to act in our clients’ best interests. In addition, none of the Advisors earn commission, so the incentive to “upsell” is minimized)
SoFi has announced that they're not going to be charging management fees at all on their Automated Investing product. That makes them one of the best-priced robo-advisors out there. And when you combine that with getting access to a financial advisor, it's a really big win.
Remember, Betterment charges 0.40% if you want access to CFPs. So that savings can be significant on a large portfolio.
SoFi offers all members career and income planning advice. And it hosts free events in several metro areas across the U.S. (especially New York and San Francisco, but other areas as well). This is a huge benefit for people that struggle with writing resumes or need help negotiating a new salary package.
Investing On Autopilot
Of course, SoFi is an automated investment platform. As an investor, you’ll simply put money into the account, and SoFi will invest and rebalance the portfolio for you. SoFi rebalances as often as once per month but only when your investment portfolio is too far out of line with your target portfolio.
Like all robo-advisors, SoFi will match the asset allocation of stock and bond ETFs in your portfolios to match your risk tolerance. However, unlike some of its competitors, SoFi Automated Investing doesn't currently offer any socially responsible portfolios.
No Tax-Loss Harvesting
Investors who only have retirement accounts don’t really need to worry about tax-loss harvesting. However, if you’re investing outside of a sheltered account, you need to worry about the tax implications of rebalancing. Wealthfront and Betterment both offer automatic tax-loss harvesting in taxable brokerage accounts. This is a great way to enjoy a sustained market advantage, and SoFi hasn’t built it into their algorithm (yet).
No 529 Plans Right Now
If you’re interested in investing for your child’s education, SoFi doesn’t offer 529 plans right now. Wealthfront is the only major robo-advisor offering 529 plan accounts at this time.
Related: 529 Plan Guide By State
How Does SoFi Automated Investing Compare?
Although SoFi has some distinctive benefits, but it might not be the best option for everyone. If you want access to tax-loss harvesting, 529 plans, or socially responsible portfolios, you'll need to look elsewhere. Here's a quick look at how SoFi Automated Investing compares:
0.25% to 0.40%
Auto and Human
Auto and Human
Socially Responsible Portfolios
How Do I Open An Account?
Creating a SoFi Invest account is easy and should only take a few minutes. To begin, visit the SoFi Invest page and click the big "Invest Now" button at the top right-hand corner.
After providing your basic personal information, you'll answer a few identity verification questions as well as questions about your risk tolerance and investing experience. Your answers will help SoFi to choose the right automated portfolio for your goals and needs.
Lastly, you'll connect your bank so that you can transfer over the funds that will be invested into your custom portfolio. You can make a one-time transfer or set up a recurring schedule.
Is It Safe And Secure?
Yes, SoFi uses TLS 1.2 Encryption on its website and offers two-factor authentication for account logins. All securities are protected up to $500,000 ($250,000 for cash) by SIPC insurance. And if you happen to also have a cash account with SoFi Money, your deposits are insured up to $1.5 million by FDIC insurance.
Note: SoFi Invest was fined by the SEC for transferring client assets from independent ETFs to their own proprietary SoFi ETFs. See the SEC violation here.
How Do I Contact SoFi?
Once you create a SoFi Automated Investing account, you'll be given multiple ways to get in contact with one of their human advisors. But if you're looking for general support, you can call 855-525-SOFI (7634) or chat live with a representative here. SoFi Invest's customer service hours are Monday-Thursday, 5 AM-7 PM (PT) and Friday-Sunday 5 AM-5 PM (PT).
Is It Worth It?
Right now, if you’re only investing in retirement accounts, SoFi Automated Investing may be the robo-advisor to beat. The no management fee, free access to financial advisors, and the perks of SoFi membership are a tough combination to beat. If you’re committed to the automated investment route, SoFi seems like the right choice.
However, investors who want more control over their portfolios may want to look to M1 Finance. Additionally, investors with after-tax portfolios can find greater tax efficiency by investing through Wealthfront or Betterment.
SoFi Automated Investing FAQs
Here are a few questions that people often ask about SoFi Automated Investing:
Is SoFi Automated Investing really free?
You won't pay SoFi any advisory fees to use its automated portfolios or access its human advisors. However, the ETFs that make up those portfolios will each have their own expense ratios. Thankfully, these fees are also low with 0.05% being the average expense ratio for the funds that SoFi uses.
Is SoFi good for beginners?
Yes, with its diversified portfolios, automatic rebalancing, and team of human advisors standing by, SoFi Automated Investing could be a great place for new investors to start.
Is my money safe with SoFi?
Yes, all the securities inside SoFi brokerage accounts are protected up to $500,000 by SIPC insurance. However, SIPC insurance only protects against brokerage failure not against the depreciation of investments.
Does SoFi Automated Investing have any promotions or offers?
Yes, clients who open a new account with SoFi Invest will receive a prize of $5 to $1,000.
SoFi Automated Investing Features
Average ETF Expense Ratio
Socially Responsible Investments
Access to Human Advisor
Customer Service Number
Customer Service Email
Monday-Thursday, 5 AM-7 PM (PT)
Other Customer Support Options
Direct messaging with personal financial advisor from dashboard
Mobile App Availability
iOS and Android
Open an account and get a prize of $5 to $1,000
SoFi Automated Investing Review
Commissions and Fees
Ease of Use
Features and Tools
SoFi Automated Investing is fee-free, offers a broad range of low-cost investments, and include complimentary access to financial planners.
- No annual management fee
- Low-cost, diversified portfolios
- Automatic rebalancing
- Unlimited access to CFPs
- Doesn’t provide tax-loss harvesting
- No socially responsible portfolios
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.
Editor: Clint Proctor