In brief
Betterment’s core investing service charges for ongoing automated advice and portfolio management. Fidelity’s standard brokerage lets the customer choose and maintain investments without an account-level advisory fee, while separate Fidelity managed services have their own terms.
I would compare Betterment when automatic allocation, rebalancing, and advice are services I deliberately want to buy. I would compare a self-directed Fidelity account when I can maintain a simple portfolio and want to avoid a recurring advisory charge. The comparison is service versus service, not app versus app.
Cost and responsibility
Betterment says its Digital plan costs 0.25% annually or $5 per month. The $5 tier applies under the conditions stated on its current fee page; qualifying balances or recurring deposits can move a household to percentage pricing. Underlying fund expenses remain separate.
Fidelity states $0 commissions for online U.S. stock and ETF trades and no fee to open its retail brokerage account. A self-directed investor still bears fund expenses, spreads, taxes, and any charges for other products or services.
At a static $1,000 balance, $5 monthly equals $60 per year, or 6% of that example balance. This is fee arithmetic, not a return estimate. At larger balances, 0.25% pricing may be less dramatic, but the fee compounds and should be compared with the value of the service received.
What automation actually buys
Betterment describes portfolio selection, trading, rebalancing, and tax-related features within its advisory service. Those features can reduce maintenance and behavior errors. They cannot guarantee superior performance or eliminate taxes and market losses.
Fidelity supports recurring investments in eligible stocks and ETFs, which automates contributions and purchases but does not choose the allocation or rebalance the portfolio. Automation of a transaction is different from automated advice.
Tax-loss harvesting is not a universal rebate
Tax-loss harvesting can defer tax by realizing losses and maintaining exposure with a replacement investment. Its value depends on available losses, future gains, tax rates, account coordination, wash-sale avoidance, and what happens when the replacement asset is eventually sold.
An investor holding similar funds at another broker, IRA, or spouse’s account can create wash-sale complications that one platform cannot see. Do not assume an advertised average tax benefit applies to an individual household.
Which questions decide the choice
- Do I want to delegate the portfolio or only automate deposits?
- Will a flat monthly fee consume a large share of a small balance?
- Can I maintain one to three broad funds without trading around news?
- Are tax-management features relevant in this account type and tax situation?
- Would access to a human adviser require a different service tier?
Bottom line
Betterment is the more direct fit when you want portfolio management bundled into the service and accept an ongoing advisory fee. Fidelity is the stronger fit when you want broader self-directed control and can maintain the plan yourself. The right comparison is the complete service you will use—not a robo-adviser fee against a brokerage feature you do not need.