SoFi is mostly known for student loan refinancing. However, in recent years the company has expanded its offerings to include mortgages, life insurance and now investing through SoFi Wealth.
Using the principles outlined in Modern Portfolio Theory, SoFi Wealth aims to help you grow your wealth over time. SoFi Wealth uses ETFs to construct your portfolio based on your answers to a questionnaire. There are different strategies you can choose from and you have access to financial advisers, but ultimately, SoFi Wealth acts as a robo-advisor that puts together a portfolio for you based on your goals and risk tolerance.
Who should consider SoFi Wealth?
SoFi Wealth is ideal for beginning investors looking to get their feet wet without the need for a large amount of money. You can open an account with a $100 one-time deposit or $20 monthly deposit. This makes it easy for newbies to begin investing.
Additionally, SoFi is especially suited for long-term investors looking to do very little of their own portfolio management.Due to broad-based ETFs that don’t rely on individual stock picking, there is very little effort required on the investors side. This makes SoFi investing ideal for financial goals such as retirement.
SoFi Wealth fees and features
|Amount minimum to open account|
|Account fees (annual, transfer, inactivity)|
|Tax loss harvesting|
|Tax loss harvesting detail||SoFi does not currently offer tax loss harvesting.|
|Offers fractional shares|
|Ease of use|
|Mobile app||iOS, Android|
|Customer support||Phone, Email, 4 branch locations|
Strengths of SoFi Wealth
SoFi Wealth has several things going for it, making it a good choice for many investors.
- No management fees: Right now, SoFi isn’t charging any management fees. ETF expense ratios still apply.
- Diverse investments: SoFi investing offers a wide range of ETFs from 20 different asset classes. This makes it possible for you to enjoy diversity in your portfolio, according to your risk tolerance. You can get exposure to U.S. and international stocks, bonds and real estate with automatic rebalancing when needed.
- Free access to financial advisers: SoFi Wealth offers unlimited access to financial planning professionals at no additional charge. There’s a wide range of hours available and you can meet with your adviser via chat, video or phone. SoFi’s financial advisers are fiduciaries, which means they must adhere to your best interest and they don’t make commissions based on recommendations.
- Bonuses: Being a “member” of SoFi allows you access to some special bonuses. For example, SoFi often holds in-person events for which you can receive an invitation to join. On top of that, if you use SoFi investing, you can get a discount on your interest rates with SoFi loans. Finally, you can access career advice on top of financial planning help.
SoFi can be a great option for beginners looking to get started and who need a little help planning a goals-based roadmap.
Drawbacks of SoFi Wealth
No SoFi Wealth review is complete without offering some of the drawbacks to the product. While there are some great upsides, the reality is that SoFi is relatively new to investing and doesn’t offer some of the benefits you might see with other robo-advisors like Betterment and Wealthfront.
- No tax-loss harvesting: SoFi investing doesn’t offer any sort of tax strategy. It doesn’t automatically harvest losses when you sell ETFs and it won’t distribute your assets across your accounts in the most advantageous way.
- Limited types of accounts: While you can open individual and joint taxable accounts, and set up retirement accounts, there aren’t a lot of other options. You can’t open a 529 account or set up a custodial account. If you’re looking to do a little more, you may want to explore other options.
Is SoFi Wealth safe?
Anytime you invest, it’s important to be careful and comfortable with your strategy. You always run the risk of loss whenever you put your money into any investment account. However, SoFi investing is as safe as any other robo-advisor. The use of index ETFs means that your portfolio follows overall market trends, which, over time, tend to head higher returns (despite short-term losses).
On top of that, SoFi Wealth carries SIPC insurance, which protects account holders if the broker fails. However, realize that SIPC insurance doesn’t protect your portfolio from losses due to market and economic events.
Before you invest, check with resources like FINRA BrokerCheck and the Better Business Bureau to see what disclosures and complaints might be related to the company.
SoFi Wealth is a good option for most investors looking for a simple way to manage a long-term portfolio. It’s very easy to open an account and you get free personalized financial planning help and advice to help you coordinate your portfolio to meet your financial goals.
SoFi investing is still relatively new, so you might miss out on some benefits and tools offered by those that have been in the investing space for decades. Consider your needs and compare SoFi Wealth with services like Betterment, Ellevest, and Wealthfront to see if it works for you.