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Webull vs Betterment 2020: Best Investing Platform?

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Written by Matthew Cerminaro
Updated on July 27, 2020

Realistically, there's no perfect investment platform, or a "one size fits all." But that's a good thing! It means you can shop around and explore what's out there and make smart decisions about getting the best bang for your hard-earned buck.

Every investor has their own specific plan, and there are plenty of online investing apps to get you where you want to go.

We're here to help you do that comparison shopping. Today, we are going to be looking at two platforms and the diverse services they offer. They are Webull and Betterment.

While Webull and Betterment fall under the same category for what they offer, they are actually quite unique to one another.

In this article, we are going to break down the key features, fees, pros, and cons of both Webull and Betterment. This will give you a broader picture and better understanding of which platform may be a good fit for you.  

Summary: Webull vs Betterment

  • Both Betterment and Webull have no account minimums
  • Betterment charges a 0.25-0.40% fee for investment management and financial planning
  • If you sign up with Webull, you will get a free stock!
  • Webull is a commission-free brokerage trading platform
  • Betterment has great financial planning features
  • Webull features paper trading and other features designed for more active trading 
  • Both platforms support retirement accounts
  • Webull offers a better platform for active traders
  • Betterment is best for those who need investment management and/or financial advice
  • You can trade individual stocks, ETFs and options on Webull
  • You can only invest in prebuilt portfolios on Betterment
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Webull Review 2020: Best Free Investing App?

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Betterment Review 2020: Is This The Best Robo Advisor?

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What Is Webull?

Webull is a new player in the field. Launched in 2018, the platform follows in the footsteps of discount brokers like Robinhood by specializing in commission-free trades and a decidedly user-friendly trading platform.

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Webull offers a great layout whether you're a beginner or a seasoned investor. The platform has more advanced tools compared to other discount brokerages. However, complete beginners could be overwhelmed by the information overload and lose their focus.

Some of their specialties include advanced trading charts, real time market data, and technical and fundamental data. 

Although Webull is relatively new, the platform already has a user base of over 9 million. The company primarily uses its mobile app as its interface, but does offer a web and desktop application as well. 

How Does Webull Work?

It really couldn’t be much easier to create an account with Webull. The whole process took us under 5 minutes, and you can complete the task directly from the mobile app.

You’ll have to put in a bit of your info (just like any other service), such as your personal information and social security number for tax reasons. After you do, there will not be a prompt to deposit any cash as there is no minimum balance that Webull requires in order to start an account with them. 

If you wanted to stop here and just take advantage of all their tools and features you could. You wouldn’t be making a bad decision either. They really do offer a large menu of industrial-scale technology.

But if you want to start investing on their platform, you can make a deposit. Their superb user interface makes it simple to look up stocks and learn just about anything you want to know in a matter of minutes. 

And the best part is, if you use the link below you will get a free stock when you open and fund the account!

Webull Features

Because Webull has such a variety of features on its online brokerage platform, we are going to help you  with an overview of the most important ones if you're a newbie to using Webull. Let's take a look at some of the most singular features.

Tools and Analytics

We can't overstate this: Webull has some excellent tools that you can access completely free. These tools and graphs can be a bit dizzying to a completely new investor, but people with experience will really appreciate these features. 

Webull lets you view data such as analyst recommendations, insider trades, earnings, revenue, and historical earnings per share and the list just keeps ongoing. This research is found on four separate pages of the Webull mobile app. Though the app is their primary mode, it is somewhat simpler to navigate the desktop and web platforms in order to really take advantage of all the tools. 

Options  

Webull’s options feature has very recently been released and investors couldn’t be more excited. 

To start using options, you first require approval from Webull. They will ask you how much options trading experience you have and will give you a trading level of 1-6. This is an enormous help to ferret out what strategies they will let you get into. 

If at any time you feel you're ready for the next steps in options trading, then you can ask to have your account reevaluated to be bumped up to higher levels in their system. 

Just like the rest of the Webull platform, there is no fee for trading options.

Paper Trading

One of our favorite features on the Webull platform is the paper trading tool. This gives you $1,000,000 in fake money to test out your investing strategies, all risk-free! 

We know, you won’t earn anything from this. But for a new investor, it can be a great way to learn the ropes without risking your hard-earned money. 

With paper trading, you can test out all of Webull’s other features as well to learn a wide variety of their tools. This will (hopefully) make it a much less painful learning experience once you start investing real money

Webull IRAs

Webull recently added IRA accounts to its menu. One great benefit to using an IRA through Webull is that they will not charge an annual fee to manage the account. You can open a Roth, Traditional or Rollover IRA. The process is just as simple as creating a Webull account and just takes a few minutes. 

Webull Fees

Webull's fees come primarily from the margin that it can provide you. Margin, in Webull's case, is money lent to you from the broker that you can use to invest. This money does not come free, however, and I will break down some of the costs that you will incur if you decide to use this feature.

Marginal Interest

At a traditional bank, loaned money is accessed at a certain interest rate. This is the same for Webull. Below is a table showing the different interest rates scalable on the amount of margin accessed.

Short Selling Fees

While there are no fees associated with buying stocks on Webull, there are some short-selling fees to be aware of. Short selling is when you bet against a company and profit off of negative fluctuations in the stock price. Fees equate to $0.0000221 x total $ trade amount. So, for example, you sell 100,000 dollars of shares short of Apple, that trade will cost $2.21. Obviously this is a very small fee for a very large trade, but this is consistent with Webull's goal to keep costs low!

Webull Pros

  • No minimum deposit
  • Zero Commission
  • No extra fees
  • Paper Trading
  • Excellent Tools and Analytics
  • Access to IRAs
  • Get a free stock for signing up!

Webull Cons

  • No mutual funds 
  • No direct bond investing (only through ETFs)
  • Limited customer support
  • No prebuilt portfolios/guidance of any kind

What Is Betterment?

Betterment has been building its reputation of saving you money since 2008.

And since then, it has become a true leader in the world of the robo-advisor. They are different from brokerages like Webull in that they let their algorithm call the shots to get you from where you are to where you want to be in your financial future. 

The process is coming along swimmingly for the company who now has over $22 billion in total assets managed from all of its users. Betterment offers a wide array of financial advice and caters to both brand new and more experienced investors. Their goal is to make the investing process as hands-off as possible. 

 

How Does Betterment Work?

The Betterment platform's signup process is about the same compared to other online brokers.

All you have to do is provide your name, address, SSN, and other personal information. The process is unique, however, in parts of its questionnaire that you will need to fill out. This is consistent with the company's goal of holding a fiduciary standard to all of its users.

Fiduciary means that Betterment wants to assess your risks, goals, and time horizon before you get started to meet your hopeful destination.

Betterment Features

Betterment has several features that make it divergent from typical online brokers. At the heart of its business operations is its built-in Robo-Advising service. This is just one feature within Betterment's services that makes it stand out.

Betterment Robo-Advisor

When you sign up for a Betterment account, you will fill out a questionnaire giving info about yourself and your short and longer-term investment goals. Betterment takes these details and decides where to automatically invest your money to reach these milestones.  This is what is called a Robo-Advisor, and Betterment is one of the few online brokers in the industry that offers a Robo-Advisor with no account minimums. This makes it a great option for those who are looking for a more passive approach to investing.

Financial Advice

Betterment offers access to a CERTIFIED FINANCIAL PLANNER™ (CFP) if you have questions about your investments or even finances in general. This service is entirely free if you have Betterment Premium. If not, you will have to buy into an advice package starting at $199. There are different packages for you, all dependent on what you want out of your phone call with the CFP, so give some thought to what kind of advice and discussion you're looking for.

Betterment Bank Account Management

With Betterment, you can open a high-yield savings account called Betterment Cash Reserve that boasts an interest rate higher than most banks. This account doesn't even require a minimum balance and holds $1,000,000* of FDIC insurance coverage. However, *$1,000,000 in FDIC insurance is a goal and not a guarantee.

Betterment uses four member banks to hold cash deposits. Each bank covers $250,000 in FDIC insurance, but it's not guaranteed your account will be spread across these four banks proportionately.

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They make the process of using this account as easy as possible with a couple of automation features such as smart deposit and two-way sweep.

Smart Deposit

Smart Deposit allows you to automate the transfers between your checking account and the Betterment Savings Account. You link those two accounts and give Betterment a set amount of money you want to hold in your checking account. 

Any money that is over that set threshold is automatically transferred, free of charge, to the Betterment Savings account. This means you don’t have to think about how much you need to deposit every month.  If you prefer, you can send your money to your brokerage account to invest with this feature as well. 

Two-Way Sweep

Two Way Sweep offers is a similar function but in the opposite direction. If the money in your checking account dips below that threshold you supplied them, Betterment will automatically transfer the funds to bring it back up to where you want it. 

Betterment Fees

Digital Plan 

Betterment Digital Plan costs 0.25% of your total account value per year and gives you access to its revolutionary tools such as a: Robo-advisor, tax-efficient investing tools, cash management features, and more.

Premium Plan

How can there be a step up from Betterment's Digital Plan? What else can Betterment offer? Well, for 0.40% per year, you can access calls from CFPs and other financial profs with extraordinary expertise in the investment and personal finance field. This type of account also requires a minimum balance of $100,000.

Betterment Pros

  • Full-scale investment management
  • Access to human advisors
  • Wide variety of financial planning features
  • No account minimum
  • Passive, hands-off investing made easy

Betterment Cons

  • Annual fee based on assets
  • No direct indexing or investing in individual securities
  • Limited to stocks and bonds using ETFs
  • No individual stock or asset purchasing, portfolios only

Betterment vs Webull: The Final Verdict

Choosing between these two investment platforms is entirely going to come down to which is closest to your ideal and seems steer you in the right direction on your path to financial wealth.

They offer two very unique approaches to investing and will likely attract investors who are wildly different in their strategies. If you have a more active investment style, then you are likely going to lean towards Webull. The free trades and tools they offer make them one of the best to trade on in this capacity. If you want to be an active stock trader, Webull accommodates this. 

However, if you want to try out a passive stance, then Betterment is going to be a good choice for you. They have excellent automation for their users and there is almost nothing you'll need to do once your account is completely set up. 

Betterment also offers financial planning and access to real-life advisors for a small fee.

Betterment is also a standout if you have a longer-term investment approach, since they offer many different retirement accounts. However, Webull did earn points here when they debuted their new IRAs. Ultimately, you may want to test drive accounts in both platforms to see how they fit and move you along getting closer to  your goals.

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