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How Does a Wealth Management Account Work?

December 19, 2018 · 4 minute read

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How Does a Wealth Management Account Work?

Planning for your financial future isn’t just about taking care of your credit score and managing your student loan debt. Investing in the market is an important part of any financial plan. Understanding the market and investing wisely can require a lot of time and self-education.

Some of us may put off investing because we aren’t sure how to get started, or we’re worried that investing requires large sums of money up front. A wealth management account is one way to help simplify investing for those new to the game and for experienced pros.

What Is A Wealth Management Account?

A wealth management account is any account that invests your funds in the stock market. While there are many different types of asset management accounts, historically, many of these accounts have been available only to those with a significant wealth or assets to manage.

If you’ve avoided opening a wealth management account because of high investing minimums, know that there are now more options available than ever to investors of any income bracket.

For example, a SoFi Invest® account has many of the benefits of a traditional wealth management account, without the red tape. At SoFi, you can start investing with as little as $1. You set your financial goals, whether that is saving for a shorter-term goal like a down payment on a home, or a long-term goal like retirement.

Using your preferences, SoFi Invest technology recommends the right investment strategy and level of risk to help you reach your goals on schedule.

Based on your personalized investment strategy, your SoFi Invest account invests your money in ETFs, or exchange-traded funds, which allows you to efficiently invest in a diverse portfolio of stocks and/or bonds. While there is always a risk of devaluation and loss of money with market investments, investing early and leaving your money in the market may help your money grow over time.

Pay a little, invest in a lot.




Distributor, Foreside Fund Services, LLC

Why Invest with a Wealth Management Account?

You might think you’re too young to worry about investing, but whatever your goals are, remember that investing may help you reach them even sooner. Think of it this way: Let’s say you start saving $100 a month at age 25, and you keep that $1,200 per year in a coffee can under your bed. After 40 years of saving, when you retire at 65, you’d have $48,000 in your coffee can.

Now, what would happen if you still saved $100 per month, but instead of stashing it under your bed you invested that money? Putting that $1,200 in the market allows your money to grow and compound. While rates of return cannot be guaranteed, and it is possible that investments will lose money, over time, money tends to grow when left in the market.

Long-term market growth and the magic secret sauce known as compounding interest means that by the time you’re 65, your investments could be worth way more than $48,000. Investing is a way to put your money to work for you. While you’re busy earning paychecks, your money can be hard at work earning compound interest in the market.

How Does Investing with a Wealth Management Account Work?

First a financial planner take a good hard look at your goals. Of course, every good goal needs an action plan to make it happen.

A SoFi Invest advisor will recommend a personalized investment portfolio for you based on things like your age, the amount you wish to invest, your risk tolerance, and your assets.

Don’t worry, though, you always retain ultimate control. You have the power to adjust your risk level and select the plan best for you. SoFi’s goal planner includes a risk simulator, so you always know how both your risk tolerance is factoring into your investment plan.

Once you have an investment plan in place, SoFi Invest builds you a portfolio from a wide selection of ETFs. These ETFs might include things like U.S. stocks, treasury bonds, international stocks, high-yield bonds, and real estate. Your SoFi Invest Account helps you avoid some risk by diversifying the types of investments you own.

Instead of sticking all your money in one asset, SoFi leverages your ETFs over many different asset classes. That means that if one asset tanks, not all your eggs, or all your money, are stuck in that one basket. No investment is risk-free, but diversifying your holdings can undoubtedly help you weather the market.

How Do Financial Planners Help with Wealth Management Accounts?

One significant benefit of a SoFi Invest account? You’re not beholden to a bot. While many robo-investors simply invest your money according to an algorithm, SoFi pairs the best investment technology with something even better: human advisors.

SoFi Invest accounts come with free access to credentialed financial advisors whose job it is to help you plan for a smart financial future. SoFi’s financial planners are registered investment advisor representatives, and we hold them to the highest fiduciary standard, to act in their clients’ best interest.

Investing with SoFi’s easy-to-use Invest account while having access to on-demand to financial planners is a win-win. Easy, manageable ETF investments and real, human input come together to help you on the path to investing.

Ready to make your money work for you? Learn more about how a SoFi Invest account can help you get started investing.


SoFi can’t guarantee future financial performance.
This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Advisory services offered through SoFi Wealth, LLC, a registered investment advisor.
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