SoFi Automated Investing review 2021

Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more.

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SoFi Automated Investing Logo

Best For

  • Newer investors
  • SoFi clients
  • Cost-conscious investors

SoFi Automated Investing offers a low-cost robo-advisor that can get the job done without a lot of fuss. Its biggest advantages include no management fee, cheap ETFs, and access to certified financial planners, though it doesn’t offer certain features such as tax-loss harvesting that are standard in the industry. 

Because of the range of other financial services offered by SoFi, this robo-advisor makes a good pick for those who already have some part of their financial life here, though others may find it not quite sophisticated enough for their needs.

SoFi Automated Investing at a glance

Star Rating

4
  • Cost: 5 of 5
  • Investments and Portfolios: 4 of 5
  • Account Types: 4 of 5
  • Features and Tools: 3 of 5
  • Customer Experience: 3.5 of 5
  • Account Minimum:
    $0
  • Management Fee:
    None
  • Account fees:
    $75 transfer-out fee
  • Portfolio Mix:
    10 model portfolios across taxable/tax-advantaged accounts covering 13 asset classes
  • Fund Expense Ratio:
    Average: 0.05 percent
  • Account Types:
    Individual and joint taxable, Roth IRA, traditional IRA, SEP IRA and rollover IRAs
  • Cash Management Account:
    Must open a SoFi Money account, which includes mobile banking, money transfer, a debit card, interest and more – without a monthly fee.
  • Customer service:
    Phone and chat 8 a.m. to 8 p.m. ET Monday - Thursday, and 8 a.m. to 7 p.m. ET Friday
  • Tax Strategy:
    No tax-loss harvesting
  • Rebalancing:
    Yes
  • Tools:
    Some basic goal-planning tools, educational content on investing
  • Promotion:
    None

Pros: Where SoFi Automated Investing stands out

Low cost

SoFi Automated Investing’s biggest draw is its low cost, and customers should have no arguments around the company’s management fee: zero. That compares favorably to the industry as a whole, where the standard is 0.25 percent, or $25 per $10,000 invested. SoFi is one of a handful of robo-advisors that charge nothing, with Schwab Intelligent Portfolios another.

SoFi constructs its portfolios with 11 ETFs representing broad swaths of the market (total bond market and small-cap ETFs, for example). SoFi uses a couple of its own funds (more on this later) and most of the rest come from Vanguard, a well-known low-cost leader in funds. 

These funds (with a couple exceptions) are cheap, allowing you to build a portfolio that costs very little. In fact, the Vanguard funds used are among the cheapest around, with expense ratios below 0.10 percent, or a cost of $10 annually for every $10,000 invested. Several of the funds cost less than half of that. 

All in, it should be easy to build a portfolio that costs little. Between SoFi’s free management and the low-cost funds, you could easily pay less than $10 per year for each $10,000 invested. SoFi says its average portfolio has expenses of 0.05 percent, or $5 for every $10,000 invested. 

Automatic rebalancing is included in the package. If your actual portfolio starts to drift from your target allocation (if stocks outperform bonds, for example), SoFi will bring it back in line.  

Access to certified financial planners

You’re not paying a management fee, so SoFi must be skimping on service somewhere down the line, right? If so, it doesn’t appear to be in financial advisors. You’ll be set up to speak with certified financial planners (CFPs), who abide by fiduciary code to act in your best interest. They can help you with answers to less common investing questions and developing a financial plan. 

Easy to get started

It’s easy to get started with a SoFi Automated Investing account (a little too easy perhaps.) You’ll run through a few questions on your investing goals, when you need the money, and which of five model portfolios you’d like to have (conservative, moderately conservative, moderate, moderately aggressive and aggressive). And then you’re done in a few minutes. (If you need to, you can always go back and quickly edit your model portfolio with a couple clicks.) 

Then you’ll be prompted to transfer funds, where you can connect your SoFi account to your bank account. You can do this with instant verification, and you’ll be prompted to set up a recurring deposit. Or you can make a one-time deposit and be on your way. 

The money will be invested in your portfolio as soon as it arrives in the account.

Cash management account

You won’t get a cash management account as part of Automated Investing, but that may be a moot point, since you can open one on the SoFi site anyway. Since you already have a SoFi account, you can open this account quickly and move money between your accounts easily. 

A SoFi Money account offers core bank functionality – mobile banking, money transfer, a debit card and more – without a monthly fee. You’ll also be able to earn interest on the account with a recurring monthly deposit of $500 or more. 

So you’ll get much the same functionality as a cash management account through your robo-advisor account, though you won’t enjoy some features, such as margin loans. 

SoFi membership benefits

Using SoFi may entitle you to become a member, giving you access to a number of benefits. These benefits include rate reductions on SoFi loans, local networking events, career coaching and more. You don’t necessarily have to use Automated Investing to receive these benefits, and SoFi offers them to others who use one of its many financial services. 

Quick comparison of Robo-Advisor options:
Robo-Advisor Overall Rating Cost Rating Investments and Portfolios
SoFi Automated Investing logo
5 4 of 5
Schwab Intelligent Portfolios review 2021 logo Read Our Review
5 4.5 of 5
Wealthfront review 2021 logo Read Our Review
5 5 of 5
Vanguard Digital Advisor review 2021 logo Read Our Review
5 3 of 5

Cons: Where SoFi Automated Investing could improve

No tax-loss harvesting

SoFi doesn’t offer tax-loss harvesting, and it’s a valuable and standard feature across the industry, so it’s surprising that SoFi doesn’t provide it. Tax-loss harvesting allows you to optimize your tax bill while still being invested, and it’s just a smart (and perfectly legal) way to use the tax code to your advantage. It’s a key disadvantage against rivals Wealthfront and Betterment.

In 2019, the company stated that it intended to introduce loss harvesting but has yet to do so. 

Lack of transparency

It’s not as easy as it should be to find information on SoFi’s site, and you may have to turn to the fine print and legal documents to find the particulars that you need to know. 

When you’re dealing with money, you want the costs to be laid out very clearly, and that’s something that SoFi doesn’t do for its automated investing product. While it’s easy enough to see that it doesn’t charge any management fee (for now), it’s difficult, if not impossible, to find what a typical portfolio might pay in terms of fees. Naturally, each portfolio will pay something a little bit different, depending on the specific funds and how they’re weighted in the portfolio. 

The company does disclose what you will pay for its in-house ETFs, some of which have no expense ratio (through June 2021 at least) and which may be included in some automated portfolios. The company is waiving the 0.19 percent expense ratio on these in-house funds. 

But as for which other ETFs you might invest in? That’s not clear before you actually open an account and click through to the fine print. Contrast this to Schwab Intelligent Portfolios and others, where you see every investible fund and its cost before you even sign up.

Conflict of interest

Because SoFi may invest your portfolio in its own in-house funds, it has a conflict of interest. It discloses this conflict and which of its funds its robo-advisor might invest in. As noted above, at least through June 2021 the expense ratio on SoFi funds used in the automated investing plan is waived. This may change later on, however, so you may pay fees in the future.  

That said, SoFi discloses that its financial advisors are salaried and not paid on commission. That’s an important factor to note, since it eliminates one of the most likely places for egregious misconduct, when an advisor tries to upsell a client on a product they don’t really need. 

Basic portfolios 

Compared to portfolios offered by other robo-advisors, SoFi’s portfolio construction will feel basic, with its five model portfolios for taxable accounts and five for retirement accounts. The allocations between stocks and bonds runs from an all-bond portfolio (conservative) to nearly all stocks (aggressive). The simple account-opening process seems too brief, and goes by faster than the modest five to 10 minutes it might take with other robo-advisors.  

That said, the simplicity in the portfolios is not necessarily a bad thing, since so much in finance is unnecessarily complex. Given the sophistication in other robo-advisor platforms, you might feel a bit underwhelmed by SoFi’s platform, but don’t let that concern you too much.  

Confusing site

Automated Investing is just one part of many financial services that SoFi provides, and that’s especially evident when you log on and try to navigate through the site. You’ll soon land on the brokerage portion of SoFi Invest, where you can buy stocks, ETFs and other securities. You’ll also be able to click to other links for loans, a bank account and more, all SoFi products. But you may find it a bit harder to navigate to the Automated Investing service you signed up for. 

Bottom line

SoFi Automated Investing feels a bit like a restaurant that specializes in everything: you’re likely to get good rather than great. For some customers, SoFi’s robo-advisor will suffice, but for others it will feel as if it’s only a product that fills out a portfolio of financial services on offer. 

Contrast it with dedicated robo-advisors such as Wealthfront and Betterment or Schwab Intelligent Portfolios, each of which feels more focused on robo-advising. But for SoFi customers who are looking to expand their relationship quickly and easily, it’s easy to consolidate your accounts in one place, move money and have an investment plan that gets the basics right.

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