SoFi Active Investing review 2024
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SoFi Active Investing: Best for
- Fractional shares
- Commission-free stock, option and ETF trades
- New investors
SoFi Active Investing is a low-cost broker that does the fundamentals well and will likely appeal most to new investors or those looking to expand their relationship with this financial institution. For example, SoFi offers fractional share investing from just $5, allowing anyone to buy virtually any of the 4,000 stocks and ETFs on the platform. You won’t pay a commission on those trades, and the broker is also one of just a few offering no-commission options trading, too. SoFi’s mobile app allows you to track not just your investments but any of your accounts at this financial one-stop shop.
Despite these positives, SoFi doesn’t offer popular securities such as mutual funds, so those on the hunt for them should check out Interactive Brokers or E-Trade, which offer plenty of them without a transaction fee. Those looking for another one-stop financial powerhouse should investigate Charles Schwab and Fidelity Investments, too.
SoFi Active Investing: In the details
Pros: Where SoFi Active Investing stands out
Fractional shares
SoFi offers fractional shares on both new purchases and reinvested dividends, allowing customers to get started with as little as $5. Fractional shares are particularly popular with new investors who may not be able to afford entire shares in multiple companies. Fractional shares can allow you to build a diversified portfolio even if you don’t have a lot to invest.
SoFi allows fractional shares trading in more than 4,000 stocks and ETFs including popular companies such as Apple (AAPL), Amazon (AMZN) and Tesla (TSLA). This offering gives SoFi a leg up on other brokers that don’t offer fractional shares at all or only offer them on reinvested dividends.
Commission-free stocks, options and ETFs
You won’t have to worry about commissions eating into your investment returns, thanks to SoFi offering commission-free trading of stocks, options and ETFs. No-cost trading of stocks and ETFs has become the industry standard after leading brokers such as Charles Schwab and Fidelity cut commissions to zero in 2019. And SoFi recently added no-commission options trading, joining Webull and Robinhood in doing so. The addition of options trading moves SoFi another step closer to offering the most popular securities at no cost.
Historically, these pesky trading fees could have a big impact on the ultimate returns you earn over your investing life. Over long time periods, even small differences in the return you earn can have a major impact on the value of your investments due to the effects of compounding. So it’s great to see SoFi adding options to its stable of no-commission trading services.
Mobile app
SoFi’s mobile app is easy to use and allows you to track your finances all in one place. Whether you use SoFi for its checking and savings accounts or are looking to trade stocks, you can access everything you need in the app.
It’s simple to place a trade or just check in on your portfolio’s value when you’re on the go. Not all brokers offer access to all accounts through mobile apps, so SoFi stands out here.
Cons: Where SoFi Active Investing could improve
No mutual fund trading
One major drawback of SoFi’s brokerage platform is that you won’t be able to trade mutual funds.
While the lack of mutual fund trading is surprising and rare in the brokerage industry, SoFi does offer ETF trading. ETFs have a lot in common with mutual funds and even have some advantages such as greater liquidity and lower minimum investments. If mutual fund trading is important to you, you might consider Interactive Brokers or E-Trade, both of which offer thousands of funds without a transaction fee.
Account fees
While SoFi emphasizes its low costs, it does still charge account fees for a variety of different actions. You’ll pay $25 for an outgoing wire transfer, $75 to transfer your account to another firm and a $20 IRA closing fee. There are also fees for paper statements and participating in an IPO.
These fees aren’t likely to be regular occurrences, but they still eat into investors’ returns and can be sizable for those who manage small portfolios. Fees are almost always a negative for investors, and many popular brokers don’t charge IRA fees and the very best brokers don’t ding you for transferring your securities, either.
Limited research offering
SoFi doesn’t offer much in the way of investment research for customers. You’ll get some basic stock pages with key information, but it doesn’t come close to matching what is available through other brokers such as Fidelity or Merrill Edge. Serious investors expect access to research from a variety of sources, so it would benefit SoFi to boost its offering here.
To be sure, SoFi does offer a solid educational site that can be helpful to new investors who are looking to understand basic terms and concepts. You can even get ideas for how to set your own financial goals and which investment strategies might be the best fit for you.
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