Betterment versus Robinhood brokerage firm comparison: IRA, fees, commissions, benefits, pros and cons. Which investing service to choose?

Overview of Robinhood and Betterment

If you’re looking for a low-cost brokerage firm, you really need to take a look at Robinhood and Betterment. Both companies are modern-day brokers with unique styles of investment management. With our research, you should be able to pick the right one.

Range of Investments

At Robinhood, investors can buy and sell ETF’s, closed-end funds, option contracts, equities, and some digital currencies. Because Betterment is a robo advisor, it only provides exchange-traded funds.

Robinhood is the victor of the opening category.

Trading Technology

With its robo-only approach to money management, Betterment doesn’t have a lot of trading tools on its site. Self-directed accounts aren’t available; so obviously, there are no trading tools to speak of. We did find some tools that can be used for account management.

Robinhood vs Betterment

At Robinhood, traders do get some decent investment tools. The broker’s site doesn’t have a trade bar, nor is there any desktop software; but there is a browser platform. It comes with full-screen charting with two graph styles (line and candlestick). The program has just a handful of technical studies (moving average, exponential moving average, relative strength index, and MACD).

Robin Hood vs Betterment

For the actual submission of orders, a trade ticket offers market, limit, and stop orders. A feature allows an order to be sent during extended hours, a great service to capture unexpected price movements. There is also a watchlist on Robinhood’s site. We were able to add and delete entries at will.

We’ll take Robinhood here, too.

Mobile Apps

As with its website, Betterment’s mobile platform is very simple with minimal features. The same account management tools we found on the website appear on the mobile app. Unfortunately, we didn’t find charting, security research, or other important functions.

Over at Robinhood, things improve slightly. We did find a charting program, although the software only offers one display choice (line). The order ticket has just a few options. Highlights include cryptocurrency and derivative trading.

Robin Hood

What we wanted to see on both platforms, but found on neither, are mobile check deposit, bill pay, streaming video news, Zelle and PayPal transfers, horizontal charting with tools, and direct-access routing.

Robinhood takes its third victory.

Financial Education and Research

Betterment doesn’t provide many learning materials. This shouldn’t be surprising because it only offers automated investing services. There are no security screeners or ETF resources. We also didn’t find a virtual education center for general investing topics. Betterment does provide a few tools for account analysis, such as calculating target percentages.

Robinhood customers can find links to news pieces for any stock under investigation. Some of the news outlets we found include Yahoo Finance and MarketWatch. Brief information on stocks and ETFs is also displayed on both the mobile app and browser platform. Analyst ratings on stocks are also shown. One caveat is that there are no downloadable pdf reports; only the ratings are shown. Option chains and earnings histories are also on tap.

Fourth victory for Robinhood.

Portfolio Management

Betterment started out with only a digital-advisory service. It still has this program, and the cost is a very low 25 basis points per year. The company now offers a hybrid robo-human package that costs 0.40%, still very low. This second option comes with unlimited access to old fashioned human financial advisors who can provide help with topics such as retirement planning or getting married. Betterment’s software program still makes all trading decisions, though.

Robinhood doesn’t offer any type of managed accounts and so suffers its first loss.

Other Services

Betterment is the only broker in this survey to offer IRA’s and dividend reinvestments. The broker’s customers can set up recurring deposits in order to make regular purchases of ETF’s. Robinhood does not have anything like this.

Betterment looks better here, too.

Our Recommendations

For beginner investors, we propose Betterment over Robinhood. With its robo- and human-advisory services, the brokerage firm offers beginners better assistance than Robinhood can deliver.

For long-term investing and retirement planning, we once again recommend Betterment. Robinhood doesn’t provide services for these types of financial management.

For the trading of stocks and ETF’s, we will suggest Robinhood. As we saw earlier, Betterment doesn’t offer individual stocks, and it only provides a small selection of ETF’s with low expense ratios that can’t be individually traded. Better value could be found with another $0-commission broker Ally Invest that offers mutual funds, IRA accounts, DRIPs and automatic investing.

Neither company provides mutual fund investing, so there’s nothing to recommend on the topic.


Robinhood: Open account and get one free $2-$8 value stock.

Betterment: none right now.

Robinhood vs Betterment - Final Thoughts

On the whole, both brokerage firms appear evenly matched. The primary difference lies in managed versus self-directed investing.

M1 Finance

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