How We Ranked Fees
We ranked SoFi Invest’s fee levels as low, average or high based on how they compare to those of all reviewed brokers.
To get things rolling, let’s go over some lingo related to broker fees. What you need to keep an eye on are trading fees, and non-trading fees.
- Trading fees occur when you trade. These can be commissions, spreads, financing rates and conversion fees.
- Non-trading fees include charges not directly related to trading, like withdrawal fees or inactivity fees.
In the sections below, you will find the most relevant fees of SoFi Invest for each asset class. For example, in the case of stock investing the most important fees are commissions.
We also compared SoFi Invest’s fees with those of two similar brokers we selected, Robinhood and Fidelity. This selection is based on objective factors such as products offered, client profile, fee structure, etc. See a more detailed rundown of SoFi Invest alternatives.
To have a clear overview of SoFi Invest, let’s start with the trading fees.
Is Sofi Active Investing Right For You
SoFi Active Investing has attractive features for new investors: commission-free stock and ETF trades, no account minimum, free financial counseling and cutting-edge offerings including fractional shares and cryptocurrency. However, the lack of investment options such as mutual funds and index funds will be a turnoff for long-term investors, and advanced investors will need to go elsewhere for options, forex and futures trading.
Sofi Technologies Stock Highlights
|Sofi Technologies generated a negative expected return over the last 90 days|
|Sofi Technologies has high historical volatility and very poor performance|
|Sofi Technologies has high likelihood to experience some financial distress in the next 2 years|
|The company reported the previous year’s revenue of 867.87 M. Net Loss for the year was with profit before overhead, payroll, taxes, and interest of 386.64 M.|
|Sofi Technologies currently holds about 533.52 M in cash with of positive cash flow from operations. This results in cash-per-share ratio of 0.66.|
|Roughly 22.0% of the company outstanding shares are owned by corporate insiders|
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What Investments Does Sofi Offer
SoFi offers access to the following securities:
- Stocks and ETFs. Buy and sell stocks, ETFs and fractional shares with no commission fees.
- Cryptocurrency. Trade cryptocurrencies like Bitcoin and Ethereum 24 hours a day.
Choose from a self-directed brokerage account, automated investing or an individual retirement account to start investing. SoFi also offers a cash management account that earns 0.25% APY if you have recurring monthly deposits of at least $500.
Is Sofi Invest Legit
Yes, SoFi Invest is a legitimate service. According to its website, the Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor. .
It goes on to say that brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC-registered broker-dealer and member FINRA/SIPC.
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How Does Sofi Invest Make Money
SoFi Invest makes money in a number of ways. With SoFi Active Investing, there are many ways the company makes money. For example, it earns money on un-invested cash. It also earns interest on securities lent to certain institutions.
Another way SoFi Invest makes money is through rebates from market makers through its clearinghouse, Apex Clearing. This is important to know because this is what is known as payment for order flow. In other words, SoFi earns money by selling the order flows of its customers.
Is Sofi Stock A Buy The Bottom Line
Without a doubt, SoFi is a strong Buy at the current time. The firm has both short-term and long-term tailwinds at its back, and, with so many catalysts ready to drive the company forward, its hard to see where SoFi can go wrong.
There are certainly some risks associated with the business, but the momentum behind this ambitious company should be enough to see it through. Buy now and dont sell this one has all the hallmarks to be a multi-bagger.
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Sofi Automated Investing Review Wrap Up
The SoFi robo-advisor could be a good choice for new and small investors. You can open up an account with as little as $1. The $0 account management fees are also beneficial for all investorsmall or large alike.
SoFi also offers social events in large communities. Especially enticing for younger investors is the opportunity to chat with career counselors. Ellevest is the only other robo-advisor with this benefit.
Larger more seasoned investors may want to look elsewhere. While free account management is certainly appealing, the platform currently does not offer tax-loss harvesting. This might be a disadvantage for investors with large positions in taxable investments.
As mentioned in this review, SoFi is also a P2P lending powerhouse. Since student loan refinances are SoFis specialty, this could be a good robo-advisor for recent college graduates with student loans to refinance and those who are looking to begin investing. Additionally, existing SoFi clients seeking a robo advisor might take a look.
We recommend SoFi Invest, but with a bit of caution as it is one of the newer robo-advisors. Additionally, the SEC sanctions, accusing the firm of breaching its fiduciary responsibilities gives us cause for concern. As with any investment decisions, its important to examine your own circumstances, weigh the pros and cons, and make a reasoned decision.
Goal Planning Features Are A Major Plus
SoFi Automated Investing is reaping seriously high marks for goal planning.
With an ultra-low barrier to entry and an encouraging assortment of zero-fee investment options, SoFis robo advisor hits the bulls-eye when appealing to younger capital-poor investors.
This is a major win, especially when you factor in the rapid digital on-boarding process you can have your account set up and activated in a few clicks and voila! You are an investor! This limits new-investor anxiety and back-tracking. Before you know it, the algorithm will go to work to set up your portfolio and allocate your assets. Overall, this is a good thing.
However, because of the self-directed nature of the platform, it will be up to you to reach out to the human advisors who are there to serve you and answer your questions.
Rather than sitting back and scratching your forehead while wondering why is that asset in my portfolio? you will need to remind yourself to take action if you want to see changes in your portfolio allocations.
Interested in learning more about SoFi? See our SoFi Lending review.
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How Sofi Invest Works
SoFi Invest comprises a few different services: active trading, retirement savings, cryptocurrency trading and automated investing. Those interested in the robo-advisor service should choose the automated investing option.
After you opt for an automated investing account, youll then choose whether youd like a tax-advantaged individual retirement account or a taxable investment account. For retirement investors, SoFi offers a choice of a traditional IRA, a Roth IRA or a , the last of which is a nice touch for small business owners and not offered by every robo.
Then SoFi asks you a few basic questions to determine your risk tolerance. This is standard fare for robo-advisors, but SoFis queries left a good deal to be desired.
The platform asks a basic risk-tolerance question: If youre willing to accept lower returns over the long term to minimize any losses, or whether youd prefer the best possible long-term performance even if that meant swallowing short-term losses in exchange for potential better returns later on. This doesnt really help people imagine what they might actually do in the real world. This approach pales in comparison to other robos, such as Vanguard Digital Advisors useful interactive toggles to assess the same query.
Finally, SoFi Invest recommends a portfolio tailored to your particulars. Should you have questions about your situation, you can contact a SoFi financial advisor for help.
Where Sofi Automated Investing Shines
Management and administrative fees: Since 2018, SoFi Automated Investing has charged no management fees. It also charges no advisory or administrative fees.
Broad range of low-cost investments: SoFi clients have a choice of 10 portfolios using a diversified selection of low-cost ETFs.
CFP access: SoFis service includes unlimited access to a team of certified financial planners.
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Sofi Invest Review: What Is Sofi
SoFi was founded by Stanford business school students in 2011. The company is still based in the area, calling San Francisco its home.
In 2012, it introduced student loan refinancing. Since that was initially the only service the company offered, people equated that with its business. But it offers much more than that. SoFi provides a variety of financial products and wants to help its customers reach financial independence.
It expanded its product line in the ensuing years, added several new services:
- In 2014, it added mortgages.
- In 2015, it started offering personal loans.
- In 2019, it launched SoFi Money and SoFi Invest.
As you can see, SoFi Invest is one of its newer products, so it doesnt have a long track record. Dont worrywere going to cover all the details in this review. For now, it suffices to say its Automated Investing has no management fees and its Active Investing has commission-free trading.
Note that all SoFi Invest customers have access to SoFi Money, a high-interest savings account that pays you a regular APY.
SoFi says its core values define the company. They include everything from putting members interests first to embracing diversity. Basically, they want to do everything they can to keep their customers happy.
Sofi Automated Investing Pros
- No tax-loss harvesting for non-retirement accounts.
- No socially responsible ETFs within Automated Investing.
- No week-end phone customer service hours for SoFi Invest.
- The aggressive portfolio is 100% invested in stocks while the conservative portfolio is 100% invested in bonds. The 100% stock aggressive portfolio is too risky for most investors. While the 100% fixed investment portfolio is too conservative for all but relatively short term investors.
- Limited account options. Many robo-advisors offer greater account selection.
*In August 2021, SoFi Wealth was fined $300,000 by the SEC for transferring SoFi automated investing client assets from unaffiliated third party funds into their own proprietary ETFs. This caused taxable capital gains for those clients. When the investigation was opened, SoFi reimbursed affected clients for the additional tax payments that they incurred.
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Sofi Has Growth Optionality
Having started its growth story as solely a student loan refinancing platform, SoFi Technologies has quickly multiplied its growth avenues, creating three distinct business segments:
Despite seeing its student loan origination volume halved by the Cares Act passing in 2020 and later extending in 2021, SoFi expects to post $1 billion in revenue for 2021, compared to $621 million in 2020. This increase represents a 61% growth rate year over year and highlights how remarkably well its personal loans business is growing, with volumes rising an astonishing 167% for the third quarter.
Furthermore, home loan origination volumes have nearly quadrupled when comparing 2018’s totals to the trailing 12 months for SoFi. Once student loan relief potentially ends, the company’s lending unit could truly begin firing on all cylinders.
However, as promising as SoFi’s lending core is to its current operations, its Galileo and Financial Services segments could ultimately be the company’s very long-term growth drivers.
This cross-buying creates a strong flywheel effect, increasing SoFi’s overall membership value and strengthening its community.
Where Sofi Active Investing Shines
Beginner investment platform: SoFi Active Investing, a new offering from SoFi Invest, is squarely aimed at young investors with free trades of stocks and exchange-traded funds, the ability to buy and sell 21 cryptocurrencies such as Bitcoin and Ethereum, and fractional shares of blue-chip companies such as Amazon and Netflix.
Related products: The self-directed brokerage is part of the San Francisco company’s growing line of financial products which includes robo-advisor SoFi Automated Investing and online cash management account SoFi Money and gives members benefits such as free educational seminars and meetings with financial advisors.
Access to financial advisors: All SoFi clients have unlimited access to the company’s financial advisors at no extra charge to help with long-term financial strategy.
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Sofi Is Granted A Coveted Bitlicense
At the end of 2019, the New York Department of Financial Services granted Sofis application for a BitLicense.
Shiny new BitLicense in hand, SoFi now offers customers the option to trade crytocurrency within its SoFiInvest product.
Why is the NYDFS license so important for SoFis public/customer reputation? Only applicants that can demonstrate commitment to uphold a particularly stringent set of security, fraud protection and consumer prevention are approved for a BitLicense. SoFi passed the test with flying colors.
How Do I Sign Up
Whether you want to open an active or automated investing account, the SoFi signup process begins with creating an account:
From your SoFi account dashboard, click Start investing and select the type of account youd like to open.
To open a SoFi active investing account
To open a SoFi automated investing account
The SoFi platform offers basic research, but its charting tools are limited. Youll get:
- Watchlists to browse popular stocks
- Access to the platforms Investing 101 Center filled with tips for beginners, need-to-know terminology and more
- Real-time investing news and data
Technical day traders looking for in-depth stock research and advanced charting tools may want to look elsewhere.
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What Is Sofi Technologies
SoFi, short for Social Finance, is an American online personal finance company. Its financial products include student loan refinancing, mortgages, personal loans, credit cards, investing, and banking through mobile app and desktop interfaces.
The chance for retail investors to invest in SOFI stock came from a Chamath Palihapitiya-backed SPAC deal. In December 2020, blank-check company Social Capital Hedosophia Corp V merged with the fledgling fintech. The hugely hyped IPO valued SoFi at $8.65bn.
Before going public, SoFi raised money from venture capitalists, including Peter Thiel and SoftBank. Its last private valuation was around $5.7bn.
Since the IPO, the SOFI share price has fluctuated wildly, but today sits comfortably around an $11bn market value.
What Differentiates The Sofi Robo
Fee Free Investment Management
SoFi Automated Investing portfolios are managed for free. This is a perfect arrangement for investors who are looking for professional investment management but dont want their investment returns reduced by fees.
Popular independent robo-advisors, such as Betterment and Wealthfront, frequently charge around 0.25% AUM to manage accounts, so SoFi is a competitive alternative for investors who dont want to pay someone to manage their money. In addition, the SoFi robo-advisor has no trading, custodian or commission fees.
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Live Advisors with Personalized Service
Though SoFi Automated Investing is a robo-advisor, they also offer live financial advisors to handle your questions and concerns.
It helps to have a live person to talk to about your portfolio. You can schedule a free 30-minute meeting with a Certified Financial Planner for any investment or money question. This can be particularly important during times of market turbulence and decline. Market drops are perfectly normal events, but sometimes it helps to have someone available to remind you just that.
Although other hybrid robo-advisors offer human financial planner appointments, SoFi is the only digital investment manager with fee-free financial consultants.
Broad Asset Allocation Growth Stocks and High Yield Bonds
SoFi Loan Services
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Is Sofi Invest Trustworthy
SoFi has received an A+ rating with the Better Business Bureau. The BBB uses a grade range of A+ to F when evaluating company trustworthiness and considers a number of factors including customer complaint history, licensing and government actions, and advertising issues when reaching a final rating.
Though SoFi’s A rating indicates that it interacts exceptionally well with clients, it’s also important that you do your own due diligence on the company. The BBB says its ratings don’t guarantee a company’s reliability or performance.
In 2018, the Federal Trade Commission alleged that SoFi provided false information on how much customers saved through its loan options. The FTC approved a Consent Order with SoFi in 2019 that prohibited the company from providing misleading information about its loan refinancing savings. SoFi neither confirmed nor denied the allegations.
SoFi has closed more than 140 complaints in the last 12 months, according to the BBB.
What Is Sofi Invest
Social Finance, better known as SoFi, is an online personal finance company. They specialize in student loan refinancing, mortgages, personal loans, investing, and banking. While that is a lot to take in, for the purposes of this article, we will focus on SoFis investing arm, SoFi Invest.
SoFi Invest refers to a three-pronged platform for young investors ready to get their feet wet in investments. The platform is a relative newcomer to the investment community but has already shown its value to its more than 1 million users.
You can read our full review of SoFi Invest here.
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