SoFi Invest review: pros and cons, comparison, trading platform, broker account fees/commissions. Is it a good robo advisor?
Overview of SoFi Invest
If you thought SoFi was just for student loans, you should think again. This financial company has developed an investment platform offering a range of valuable services, making it a brokerage firm worth exploring.
SoFi Invest Pricing and Minimum Deposit
| Investments | Commissions |
|---|---|
| Stocks and ETFs | $0 |
| Foreign and OTC Securities | not offered |
| Options | $0 |
| Mutual funds | not offered |
| Treasury Bills, Notes, Municipal and Agency Bonds, Zeros & Strips | not offered |
| Investments | stocks, ETFs, and options | |
| Minimum deposit to open account | $0 | |
| Fees | Sofi fees | |
| Promotion | Sofi promotions | |
Opening and Funding an Account
SoFi provides a user-friendly online form that enables lightning-fast account opening. The form requires minimal information, such as name, email, and password. By clicking the "Invest now" button on the SoFi Invest homepage, you gain access to a variety of visual options.
When you're ready to fund your account, you'll need to provide standard details like your Social Security Number and date of birth. Linking an external bank account is a quick and effortless process. We were able to submit a trade on the same day as our deposit.
Investments and Accounts
SoFi Invest is an ultra-low-cost investment firm, offering a limited list of tradable assets for self-directed customers. Currently, it includes stocks, ETFs, closed-end funds, and options. However, certain stocks, such as foreign stocks, penny stocks, and over-the-counter securities, are not available.
The broker's robo service has an even smaller selection, primarily focusing on a few ETFs, many of which are SoFi funds.
In terms of account types, SoFi offers joint, individual, and retirement accounts (joint accounts are not available for self-directed mode). If you're unsure how to manage these accounts, SoFi provides free financial advice through Certified Financial Planners®. The service is conducted entirely online, and scheduling an appointment on SoFi's website is easy.
Banking Tools
SoFi's SoFi Money program offers a range of useful banking tools. First, there's a debit card, but not just any ordinary one. It's a World Mastercard that comes with a suite of services from Mastercard, including travel services and vacation packages. SoFi itself offers no-fee overdraft coverage and a 0.25% APY, along with a $100 welcome bonus.
Through a partnership with Allpoint, the SoFi Money debit card can be used at approximately 55,000 ATMs across the United States without incurring any fees.
Another notable feature of the SoFi Money card is the round-up function, where purchases are rounded up to the nearest dollar and the spare change is transferred to a cash account.
Aligning with SoFi's no-fee policy, there are no account fees for SoFi Money, and no minimum deposit or balance requirements.
SoFi Money accounts can be divided into vaults, which act as partitions for different purposes. Round-ups can be directed into a vault.
A SoFi Money account can also be linked to a SoFi Invest account, enabling easy fund transfers between the two using the company's software. Both accounts can be accessed with a single login.
The one drawback of SoFi Money is the absence of check-writing capabilities.
However, SoFi does offer a credit card, specifically the World Elite Mastercard. It allows you to earn points on purchases.
Website
SoFi Invest provides a website for its users. However, the platform is relatively basic in its features and functionality.
The website's top section includes links to navigate through various types of accounts offered by the company, such as loans, bank accounts, and investments. Within the brokerage section, the trading tools are minimal. Security profiles display simple charts without any additional features like technical indicators or drawing tools. The charts cannot be displayed in full screen, and there is only one plot style available, which is a line chart.
Asset profiles include a watchlist button for easy bookmarking of investments, but there are no alerts available. The broker's order ticket allows for recurring purchases and offers two other order types: market and limit orders. However, the options for stocks and funds are limited.
Mobile App
Moving on to the mobile app, SoFi offers account alerts through its app, including icon badges and sounds for activities like money transfers. The app also provides various financial themes, such as credit scores, loans, cards, and investing, which can be easily accessed by scrolling and tapping on icons.
However, like the website, the brokerage section of the app lacks extensive features. Charts in asset profiles display up to 5 years of price data, similar to the website. Strangely, horizontal rotation of the charts is not supported.
The app's order ticket mirrors the website's order ticket, offering the same trade types. Unfortunately, the SoFi app lacks certain features that would be beneficial for brokerage customers, such as streaming video news, mobile check deposit, and more advanced charting and trading tools.
Other Software
SoFi Invest does not have any other software platforms, such as a desktop system, browser platform, or smartwatch app.
Customer Support
Regarding customer support, SoFi's emphasis on simplicity extends to its customer service. As there are no branch locations, in-person assistance is not possible. Phone and chat services are available to brokerage customers on weekdays from 5 am to 5 pm PT, with an hour early closure on Fridays. The company does not offer customer support during weekends.
Outside of the customer support hours, SoFi Invest customers can find answers to their questions on the company's Help center website at support.SoFi.com. The Help center includes a comprehensive list of Frequently Asked Questions categorized by topics, including personal loans, credit cards, and a dedicated section for brokerage-related inquiries. However, the logged-in section of the website lacks extensive self-help resources, except for a tax center.
SoFi Invest Pricing
In terms of pricing, SoFi Invest takes pride in its low-cost structure. Self-directed brokerage accounts have no fees (aside from an inactivity fee), minimum balance requirements, or commissions for securities. It is possible to open an account with a zero balance, but funding the account is recommended as SoFi often offers cash bonuses for adding funds or performing transactions.
Some of the fees are: ACATs to another firm ($75), wire transfers out ($25), IRA closing fee ($20), option exercise and assignment fees ($5), returned ACH / insufficient funds ($15). Inactivity fee is $25 per account for every 12 months of inactivity.
Robo accounts have no fees, commissions, or annual percent-based fees. To get started, a minimum of $5 is required.
Security Research and Financial Education
While SoFi's margin service may not offer much, the broker-dealer does provide decent educational materials in the form of articles and videos. As the company originated as a student loan firm, there is a strong emphasis on personal financial education, which can particularly benefit Millennials and young traders.
The available articles and videos cover a range of topics, such as "How Do Student Loans Affect Your Credit Score?", "How Does a Balloon Mortgage Work?", and "Do Student Loans Count as Income?"
However, when it comes to learning resources specifically focused on trading, the options are limited. The SoFi Invest website lacks screeners for stocks and funds, which is a significant oversight.
SoFi does offer groups of securities on its site, such as Trending, Recent Searches, and SoFi ETFs, which can assist with research to some extent. Both securities and digital currencies have icons, making it easy to browse through them.
Unfortunately, once you delve into an asset's profile, the available trading details for stocks or ETFs are limited. Data points like dividend yield, volume, and P/E ratio are provided, but the information is sparse, and company details are even more lacking, typically consisting of only a brief paragraph.
On the positive side, there are news articles available for popular stocks. For instance, we found approximately 30 articles from the past day on Tesla, sourced from reputable outlets such as The Wall Street Journal, Benzinga, and Fool.com.
Securities can be added to a watchlist that synchronizes with the mobile app, allowing access to all the resources available on the website. Additionally, the mobile app provides some information that is not found on the website.
The app features popular SoFi investors, displaying their account positions. Users have the option to follow these traders and view their recent transactions.
Miscellaneous Services
Initial Public Offerings: Not only does SoFi Invest offer early access to upcoming IPOs, it actually promotes this service on its website with banners. IPO fees: $50 for the first sale of a security obtained through an IPO offering within 120 days of IPO; $5 for each subsequent sale.
DRIP Availability: Available free of charge in SoFi self-directed accounts.
Fractional Shares: Stocks and ETFs can be traded in whole dollars or whole shares at SoFi Invest.
Extended Hours Trading: Do you think a broker like SoFi Invest would offer extended-hours trading? Not a chance.
Security Lending: Not offered.
Individual Retirement Accounts: SoFi Invest has Roth, traditional, and SEP accounts. A traditional IRA, but not a Roth, can be rolled over.
Recommendations
Retirement Savers and Long-Term Investors: The SoFi website does have some good tools for long-term investing. These include home loans, a life insurance calculator, a mortgage calculator, and plenty of educational materials on lots of personal financial topics. Nevertheless, other resources are missing, like a 401(k) option, annuities, and target-date mutual funds. But Charles Schwab has all of these and more.
Beginning Investors: SoFi Invest would be a decent choice for new traders. It has a robo program, lots of personal financial tools, educational materials, and user-friendly self-directed accounts, too.
Small Accounts: With few fees, no minimums, and zero commissions, SoFi Invest is a good choice for investors starting out with literally nothing. But watch out for the inactivity fee.
Mutual Funds: As already mentioned, SoFi does not offer access to America’s mutual fund marketplace. Firstrade does, and it has thousands of funds. It would be a good choice.
ETF and Stock Trading: The lack of decent software makes SoFi Invest a poor choice for stock and ETF trading. Webull has excellent software, plus good research tools and fractional-share trading.
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SoFi Invest Review Summary
SoFi has done a good job of building a financial powerhouse with lots of services. We particularly like its banking tools and robo-advisor service. But the company has failed to deliver many tools and resources for traders and investors, and that causes us to balk at this firm as a broker.
About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.
