Our annual review of investment firms is completed and the results are in. This year, seven firms passed initial screening and were evaluated across five categories.
Overall, Betterment placed first; Vanguard, a strong second. The chart below sums up the full analysis.
Overall, Betterment placed first; Vanguard, a strong second. The chart below sums up the full analysis.
Within categories, different firms had different strengths. The highlights are listed below. For full reviews of each individual firm, see Best Firms 2016, on the Investing menu above.
- For services, Vanguard took top honors, scoring Excellent or Good for each of the component areas. Betterment was a close second, with strong scores on all components except college savings.
- On portfolios, Betterment and Wealthfront were tied at the top, because both offer well designed, indexed solutions, with best-in-class rebalancing, and at least some element of factor investing.
- Fees were rated best at Betterment and Wealthfront, thanks to their low-cost funds, fully transparent expenses, and automated advisory tools. Vanguard lagged slightly because their recently introduced advisory fees, while low compared to traditional financial advisers, are higher than the costs for comparable advice at automated firms.
- All investors, new and experienced, whether they seek to make their own decisions or get guidance, are well served at Vanguard. Betterment was next best in this category.
- For online content, including articles, graphics, and calculators, three firms achieved perfect scores: TIAA, Vanguard, and Betterment. Their websites are excellent places to find sensible ideas on a wide variety of personal financial goals and concerns.
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