We know that investing your money can be daunting. Not only are there numerous current options and avenues, but it is difficult not to frivolously spend your hard-earned cash. Incredible products call out to you; exotic getaways are waiting to be taken – the fruits of the open, liberal market are many. All these temptations make planning for the future quite boring, but it is nevertheless essential. Further reading: Is Investing in Fractional Shares with SoFi Invest a Good Idea?. Further reading: SoFi Automated Investing: A Platform Designed for the Uninitiated.
This is where a platform like SoFi invest comes into play. You may recognize the name from several years back: it originated in 2012 as a refinancing institution concentrating on student loans, which was a hot political topic at the time. Since, they have branched out into the broader world of finances and investing.
Their latest venture is SoFi Invest, a robo-advisor which helps the timid and uninitiated invest their money with little hassle, and minimal risk. SoFi Invest, while having very little track record, seems poised in a clogged market of robo-advisors because they take their company ethos serious, putting their “money where their mouth is”.
And their ethos is simple: customer experience defines who they are. They want their customers happy, and to feel supported. They figure that by putting their members’ interest firsts, their company will inevitably continue to grow and outpace their competitors.
SoFi – The Friendliest Robot on the Block
Just what makes SoFi invest so beginner friendly? First, we will cover SoFi’s “Automated” investing option, which provides members with trouble-free, hands-off investing. Here are some strong points in its favor:
- There are no account minimums, and it only takes a mere $5 to start investing.
- They provide you with quarterly automatic rebalancing, and in addition, rebalancing for 5% drift.
- An in-depth way of “goal planning”, which suggests portfolios that are best suited for your immediate desires and future vision.
- Investment advice from certified investment planners (CFPs)
- A wide, diverse range of predetermined portfolios. Members are able to choose from 10 different portfolios from 13 different asset classes. This makes it so virtually all “types” can find the investment choice they need.
SoFi “Active” Investing, on the other hand, is marketed towards members who want more control over their investments. We garner that SoFi Active is best suited for “intermediate” investors who are chasing the buccaneering thrill of “day trading”. What’s more, SoFi Active Invest allows for a variety of investments, from fractional shares to the latest rage, crypto-currencies.
Here are some of the perks one gets when they hop on SoFi’s more advanced platform:
- SoFi Active Invest is an active trading platform. This means that it functions like a basic brokerage account, letting you buy and trade different types of investments (individual stocks, ETFs, crypto-currencies, stock bits).
- SoFi Active Invest allows members to buy IPOs. This is quite unique, as it gives one the opportunity to buy into companies before they hit the market proper.
- Like its passive counterpart, SoFi Active has no account minimums and commission free trading. In other words, it is cheap.
- Members also have access to certified financial planners.
SoFi Makes Investing Easy
SoFi makes investing easy. Maybe too easy! What makes the platform so accessible is a combination of things. First, you only need $5 to invest. This democratizes investing, making it available for someone who is working for minimal-wage. There are simply no more excuses.
What’s more, there is so little upkeep. You don’t have to worry about account minimums or hidden fees; you simply invest a little here and there, sit back, and enjoy. Forget about the paltry returns of traditional banking institutions, get your “piece of the pie”, let your money accumulate, think about the future – this could be the new motto of SoFi Investing.
Are There Any Cons?
SoFi Investing is not perfect. There are many great robo-advisors on the market (consider M1 Finance), but each of them have a particular profile. Our advice is to do a little research and choose the service that best fits your needs.
That said, we think it best to highlight some of the things that SoFi is obviously lacking.
- First and foremost: SoFi Invest offers no tax-loss harvesting. While this may not impact the beginner, it could result in complications long-term. Tax-loss harvesting allows investors to offset taxes on income and capital gains.
- SoFi Active does not allow for the purchase of index and mutual funds. It also lacks some of the more advanced features of its competitors, like stop-loss orders.
A Simple Product
All in all, SoFi Invest is a simple product that will appeal to beginner and intermediate investors. Due to its lack of fees, frills, and hassle, it is easier than ever to jump into the world of investing with SoFi’s automated platform.
Do you have a few extra dollars in your wallet? No time is better than now: as the saying goes, “stop being horizontal, and start getting vertical”.