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 20 cryptocurrencies such as Bitcoin and Ethereum, and fractional shares of blue-chip companies such as Amazon and Netflix.
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.
SoFi Active Investing is best for:
Active traders.
ETF investors.
Fractional shares.
Cryptocurrency.
SoFi Active Investing features
Commission-free trades: SoFi Active Investing came out of the gate as a competitor to Robinhood, offering free stock and ETF trades (unlike many other brokers, SoFi does not offer options trading). However, toward the end of 2019, free trades became the industry standard at online brokers, causing the offerings from SoFi and Robinhood to lose their edge.
No account minimum: While, of course, you will need cash to trade, SoFi has no account minimum to open your account and begin buying and selling stocks and ETFs.
Fractional shares: SoFi Active Investing was among the first brokerages to offer fractional shares — buying a piece of a share rather than shelling out the full share price. That is an increasingly attractive option as the market has led to sky-high stock prices, and it offers new investors a cost-effective way to build a diversified portfolio. SoFi investors can buy commission-free fractional shares across a broad range of stocks and ETFs.
SoFi may have been an early leader here, but competitors are fast on its trail: Robinhood, Charles Schwab, Fidelity Investments and Interactive Brokers also offer fractional shares.
Cryptocurrency: The brokerage launched SoFi Crypto in 2019, which allowed users to buy and trade three cryptocurrencies — Bitcoin, Ethereum and Litecoin. In May 2021, the brokerage expanded their coin offerings to 20. However, there are not any free trades here: SoFi adds a 1.25% charge based on the amount of each cryptocurrency trade. Competitor Robinhood offers commission-free crypto trades.
Free financial counseling: All SoFi clients have unlimited access to the company’s financial advisors at no extra charge to help with long-term financial strategy. Advisors are certified financial planners with the Series 65 designation (or similar), which requires them to operate in your best interest. An important note: While SoFi Automated Investing customers are given direct investment advice, the advisors will not give SoFi Invest brokerage customers specific suggestions on stock trades.
SoFi also offers free career counseling and access to educational events for brokerage users.
Tradable securities: SoFi Active Investing may be leading the way with fractional shares and cryptocurrency offerings, but the brokerage is behind the curve on other investment options. Want to buy mutual funds, index funds and bonds — bedrock investments in most retirement accounts — or more advanced strategies such as options, forex and futures? Look elsewhere.
Limited track record: While SoFi, which made its name with student loans, has been around since 2011, SoFi Active Investing is a relative newcomer with its February 2019 launch. Some investors may prefer a more seasoned brokerage.
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.
Pros
Commission-free stock and ETF trades.
Cryptocurrency trading.
Fractional shares available.
No account minimum.
Free financial counseling.
Cons
Small selection of tradable securities.
Limited track record.
SoFi Active Investing’s $0 trading commission and $0 account minimum is attractive to new investors, but a lack of investment choices such as mutual funds and bonds is a drawback for those saving for retirement.
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