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Since they began in 2011, this San Francisco-based company has helped millions of people with student loans, banking needs, and has even gotten them involved with the stock market. Their trading platform SoFi Invest gives users an easy-to-use and low-cost way to trade securities.
However, the industry is quickly filling with competitors who also have lots of tools and features which may be better suited to some clientele.
Some of the top SoFi stock market Investing alternatives are Robinhood and M1 Finance. While there will be many similarities, some of these other trading apps will have benefits over SoFi that can make them more useful to certain investors.
In this post, we'll look at five other popular trading platforms and compare them to SoFi. For each, we’ll highlight the main differences and help you to decide for yourself if you'd prefer to use one of these SoFi Invest alternatives.
SoFi Stock Investing Alternatives
It’s easy to see why SoFi (short for its original name “Social Finance”) has been a disruptor in the financial services industry. They have an umbrella of products helping people to refinance their student loans and mortgages, open an online bank account, and even get a new credit card.
In terms of investing, SoFi has made a name for itself over the years as one of the best robo-advisors in this industry. Why? Because they offer something that most other robo-advisors can't: unlimited access to real-world financial advisors who can provide you with expert advice and guidance.
Naturally, this also led SoFi to open their Invest platform where active traders who want to be more hands-on would also have a place to do so.
While the SoFi Invest has lots of great features like commission-free trades and no account minimums, it doesn't offer everything that active investors expect from a stock exchange.
For this reason, some traders may prefer to look elsewhere for features that they may deem as more value-added to their investment experience.
1. Robinhood – Best For Newbies With Room For Growth
Best for: Younger people who are new to investing but want room to expand into more advanced strategies.
Robinhood may be well known as the brokerage that changed the investment industry forever when it pioneered commission-free trades.
However, this securities exchange from Menlo Park, California has gathered a lot of notoriety over the years – mainly because of its ease of use.
In fact, this combination of low cost and simplicity is what many people argue fueled the meme stock craze of 2021 when companies like GameStop and AMC Theaters dramatically rose in value.
Like SoFi, Robinhood doesn’t charge for trading U.S. stocks, ETFs (exchange-traded funds), and select crypto. They also don’t have account minimums or charge maintenance fees. However, Robinhood does offer several features that are more attractive to advanced investors:
- In addition to stocks, Robinhood users can also trade options if they wish
- Robinhood gives its users twice the instant buying power that SoFi gives ($1,000 vs $500). If you have a Robinhood Gold account, that buying power can even go as high as $50,000
Two drawbacks to Robinhood relative to SoFi are that you don’t have access to a margin account or the ability to set up a retirement account such as a Roth or traditional IRA.
To get a margin account on Robinhood, you need to upgrade to Robinhood Gold. IRAs are a feature the company has been working towards and claims they will have available soon.
Simplicity With Room To Grow
Although Robinhood’s streamlined platform is friendly to beginners, those who become comfortable trading and want to get into more advanced investment strategies will find there’s plenty of room to grow. This is especially true with the features and tools available in Robinhood Gold.
Also, if you’re into cryptocurrencies, Robinhood’s future seems to be gravitating towards this industry given the release of their new crypto wallet and plans to expand into the world of smart contracts and DeFi.
2. M1 Finance – Best For Long-Term Investors
Best for: Long-term investors who want to maintain proper asset allocation.
When someone joins M1 Finance, they don’t just “buy” stocks. The platform works by identifying which securities they’d like to own and then constructing a “pie”. This is just M1’s name for asset allocation – deciding how much weight you’d like to give to each of your assets or slices of pie. For instance,
- 20 percent to an individual stock A
- 20 percent to an individual stock B
- 20 percent to ETF C
- 20 percent to ETF D
- 20 percent to REIT E
From there, your initial investment plus any future contributions will be divided according to this pie designation. If any of your assets earn dividends or capital gains distributions, those will also be reinvested according to your pie.
This helps ensure that your assets stay in proportion to the percentages you’ve assigned and will help to build better long-term wealth.
This is a stark contrast to the classic process of investing through other brokerages.
For instance, someone using SoFi would have to know how much they’d like to spend on each security and then maintain this balance with each new contribution – that could be a lot of manual work on the part of the investor.
With M1, you could think of it like starting with the end goal in mind, which is a brilliant way to approach investing.
Easy-Made Asset Allocation
M1 Finance’s focus on asset allocation makes them a better option for long-term investing. Users who make future contributions and reallocate distributions back into their pies will be more disciplined and likely to see healthier returns over time.
Overall, both SoFi and M1 Finance are incredibly user-friendly and great for beginners.
However, investors who are more focused on their long-term goals will find M1 to be more helpful. Even newbies who know nothing about asset allocation will find that constructing and balancing their portfolios to be as easy as “pie” (… yes, pun intended).
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3. Ally Invest – Best For Customer Service
Best for: People who want 24/7 support and a one-stop-shop for investing, banking, and loans.
While SoFi and many of the other companies on this list may be barely ten years old, you might take some comfort in working with a company that’s been around for much longer.
Though most people think of Ally as one of the first major online banks with high-interest savings accounts and low-cost auto loans, the truth is that they’re a financial institution that’s existed for over 100 years now.
Ally Financial (the parent company of Ally Invest) was originally named GMAC (General Motors Acceptance Corporation) and created way back in 1919 to be the financial arm of the automobile manufacturer GM.
Like SoFi, Ally offers commission-free trades on U.S. stocks and ETFs, no account minimums, and margin accounts. They don’t offer instant buying power, crypto, or fractional shares. However, compared to SoFi, Ally does offer low-cost options trading ($0.50 per contract) and forex for more experienced investors. They also give users access to more advanced charts, research, customized watchlists, etc.
24/7 Support And One-Stop Shopping
While most digital trading apps have tried their best to remove the human element from trading, Ally embraces it and is well known for providing superior customer support. Investors who have a question or aren’t sure about something can call or chat with an Ally representative 24/7.
Like SoFi, Ally is best for people who want it all: Investing, banking, and loans. Users will not only be able to trade equities like pros through the Invest platform, but they’ll also have the ability to earn a decent interest rate on their savings and potentially refinance their mortgage and auto loan.
4. Fidelity Investments – Best All Around
Best for: People who want the guidance and support of a full-service brokerage.
While companies like SoFi and Robinhood may have been industry disruptors, who says you can’t teach an old dog new tricks?
Fidelity Investments, a name that’s become synonymous with wealth management and trading stocks since 1946 has taken steps to compete with this new generation of investment apps by also eliminating the majority of its fees.
Like SoFi, account owners with Fidelity will be able to trade stocks and ETFs (whole and fractional shares) for free. More advanced investors will also be able to trade options as well as forex. However, unlike SoFi, they won’t be able to make direct purchases of crypto or have instant buying power.
Fidelity’s major advantage over basically every other company on this list is its size. The company is a full-service brokerage that goes light-years beyond just stock trading. You can find everything from mutual funds to annuities, life insurance, and even one-on-one wealth management.
Because of their size and network, another benefit to account owners is that Fidelity can offer superior customer service. Members who have a question about anything with their accounts can call up customer service and speak to a representative in minutes.
Or if you prefer, you can visit one of their nearest brick-and-mortar locations.
Active traders will find more information and tools than they could ever want in Fidelity’s dashboard. The company provides its users with comprehensive stock research from more than 30 third-party providers. Additionally, they’ll also find expert recommendations, the latest news, and can even set custom alerts.
Everything A Full Service Brokerage Can Offer
When asking yourself “Why choose Fidelity over SoFi?” or any other competitor on this list, a better question may be “why not”?
With commissions and account minimums on par with the competition, Fidelity can offer its users far more products, services, and support. People who use Fidelity know they’re working with experience and may never need to look anywhere else ever again.
Fidelity will make a great fit for anyone from beginner to expert. Investors who prefer the option of human interaction as well as take comfort in a brokerage’s experience will find Fidelity to have a proven track record that blows away the competition.
Should You Use A SoFi Alternative For Investing?
Although SoFi has rightfully earned its place among the best in the personal finance services industry, investors and active traders have plenty of alternatives.
Nearly every company on this list offers commission-free trading. However, investors who want that little bit extra like the ability to also trade options or deep dive into market analysis may find one of these other choices better suited.
Like SoFi, Robinhood and M1 Finance will be great choices for beginners. Those who are investing for the first time or only dabble will find both platforms to be streamlined and simple. M1 Finance will be an even better choice for those investors who have a long-term mindset and want to maintain good asset allocation.
Investors who are advanced or want to work with longer-established companies should consider sage companies like Ally or Fidelity.
In summary, it all comes down to what features matter the most to you. Although each app gives you the ability to trade stocks, some may be better suited to your niche and long-term needs.
Be sure to consider the pros and cons of each company, and choose the one you feel the most comfortable to manage your money.
