SoFi Active Investing Review

Our Take

SoFi is best suited for beginner stock and ETF investors seeking zero commissions, low account minimums, and an easy-to-use mobile app. SoFi may also be a good choice if you want to keep all your finances in one place, as the company offers a wide range of other financial services, including student loan refinancing, credit cards, and mortgages. However, if you would like to invest in anything besides stocks, ETFs, mutual funds, and basic long options positions, like futures, then SoFi is not the broker for you. You'll also want to look elsewhere if you're searching for a broker that offers a robust trading platform.

Introduction

SoFi (Social Finance Inc.) is a San Francisco-based fintech founded in 2011. What started as a solution for student debt-laden millennials has turned into a one-stop personal finance shop. Today, SoFi boasts over 8.1 million "members." The company offers personal loans, home loans, private student loans, student loan refinancing, auto loan refinancing, credit cards, insurance, cash management accounts, robo-advisory services, and brokerage services—aka SoFi Active Investing.

SoFi Active Investing (provided by SoFi Securities LLC) launched in 2019. In early 2021, SoFi went public by merging with Social Capital Hedosophia Corp V, a special-purpose acquisition corporation (SPAC) run by venture capitalist Chamath Palihapitiya. SoFi began trading under its own name and ticker symbol—SOFI—on June 1, 2021, on the Nasdaq stock exchange. The company also announced in 2021 that any SoFi member with an Active Investing account is eligible to participate in IPOs. We’ll look at SoFi Active Investing to help you determine if it is a good fit for your portfolio needs.

Pros & Cons

Pros Explained 

• $0 stock, ETF, and options trades: SoFi, like most brokerages today, offers commission-free trading for online stock and ETF trades (including fractional shares). However, keep in mind that ETFs have management fees that will reduce your returns. Be sure to read your fund's prospectus to understand these fees and how they impact your bottom line.
• Easy-to-use mobile app: The SoFi mobile app is well-designed and easy to navigate. It's worth noting, however, that the app's investing-specific tools are limited—you'll find only basic charts, a few company details, a news feed, and a no-frills order ticket. Still, you can keep track of all your finances in one platform if you participate in other SoFi offerings, such as credit cards and personal loans.
• Free access to financial advisors: All SoFi customers have access to free, customized financial advice from SoFi's team of full-time financial planners. The meetings are virtual and the planners don't actually sell SoFi products. Instead, the planners are non-commissioned employees held to the fiduciary standard, meaning they are legally required to make recommendations with your best interests in mind.

Cons Explained 

• Small selection of investment products: SoFi offers access to U.S. stocks, ETFs, mutual funds, basic long-only one-leg options, and fractional shares. That means if you want to trade anything else—futures, currencies, and so on—you'll have to look elsewhere.
• No-frills investing experience: SoFi's Active Investing platform offers just enough tools to do some light research and place simple trades. There are no advanced order types here and no short sales. The charts SoFi offers are basic and offer few customization options. You won't find much in terms of fundamental analysis, and there are virtually zero technical analysis tools.
• Limited track record: SoFi has been around since 2011, but its brokerage arm launched just a few years ago, in 2019. That could be concerning to some investors who seek a more experienced broker to handle their money.

Usability

It's easy to open a SoFi Invest account online or in the app. You'll find step-by-step instructions on how to get started, and you may need to upload a copy of your driver's license, passport, Social Security card, bank statement, or utility bill if requested to do so. SoFi will email you if it needs any additional information and inform you within a few business days if your account has been approved (or declined). After that, you can fund your account and start investing. Note that only U.S. citizens and green card holders can open an Active Investing account at SoFi.

Once you are set up and ready to trade, you can place stock and ETF trades from SoFi's desktop platform or mobile app. Both offer a no-frills investing experience with few customization options, limited tools, and basic order entry. The platforms are best suited for beginner investors who already know what they want to buy or sell—you won't find much in terms of fundamental or technical analysis. 

The market quotes on SoFI Active Investing are real-time but not streaming, which means you'll have to update your browser or app to view current prices. The smallest chart interval available is one day, which makes it nearly impossible to evaluate intraday price movements.

Trade Experience

The SoFi Invest web trading platform is designed for beginner investors. It is well organized and tidy, but it lacks the features and tools that more experienced investors and traders frequently use. There's not much to customize beyond the chart timeframe (one day to five years). That said, you can create a watchlist that shows symbols, a chart overview, and either the current price or today's change as a dollar or percentage. When it comes to putting in orders, you are limited to market, limit, and stop limit orders. SoFi doesn't support stop, trailing, conditional, or time-limit orders.

Mobile Trade Experience

The SoFi mobile app is available for Android and iOS. The app trade experience is similar to what you'll find on the desktop platform. You can create a watchlist and click on any symbol to view a basic chart, a few company details, and related news. You can also place buy and sell orders from the app watchlist by selecting the stock you are interested in. The app is more useful for investors who have other financial services through SoFi, as they can access non-brokerage SoFi accounts within the same app. 

Range of Offerings

SoFi Active Investing's trading products are limited to U.S. stocks and ETFs, mutual funds, options, and fractional shares. Investing products such as OTC, fixed income, commodities, cryptocurrencies, futures, futures options, and forex are missing from the lineup.

SoFi Active Investing customers can trade:

• Stocks (long trades only)
• ETFs
• Mutual funds (over 6,000 mutual funds will now be offered)
• Options (long trades only)
• Fractional shares (about 4,000 stocks/ETFs are available for the fractional share program)
• Alternative investments (commodities, private equity, real estate, etc.)
• Margin trading

SoFi offers a robo-advisory service called SoFi Automated Investing and added initial public offering (IPO) investing in 2021.

Order Types

Being able to place orders in the market is an essential part of investing. Investors at every level will want a large selection of order types that can be made to satisfy their investing practices, unfortunately, SoFi does not have some of the more advanced order types, like conditional orders, that many sophisticated investors rely on. 

SoFi offers the following order types:

• Market: Order during market hours 
• Limit: Designate the price at which stock is bought or sold 
• Stop-loss limit: Define the price at which the sell order is activated and the minimum price at which it can be executed
• Fractional: Buy fractions of a share, based on the dollar amount 
• Market on open: Orders placed after market hours, executed once the market opens the next trading day

Trading Technology

SoFi did not provide details about its order routing practices or whether it uses sequential or spray technology. A company blog post states that "SoFi Invest routes member orders to deliver an execution that is either at or better than the equivalent price that would be executed by going directly to a major exchange," but it is difficult to evaluate that without more information.  

SoFi Active Investing works through a clearing and custody partner, Apex Clearing, that routes orders to more than eight wholesalers or market markers. SoFi Active Investing had modest payment for order flow, at $0.00102 per share, and a price improvement of $0.0026 per share on average. Having just recently added options trading to its platform, SoFi is not yet able to provide payment for order flow statistics.

Since SoFi Active Investing is geared toward beginner investors, it does not support backtesting or automated trading. These are features found on more robust trading platforms designed for active traders.

Costs

SoFi Active Investing offers commission-free trading on stocks and ETFs. However, if you invest in ETFs through SoFi Invest—either by buying them yourself or investing in them through SoFi Invest's automated investments—these funds will have management fees. These fees are paid by the fund itself rather than directly by you, but like all management fees, they reduce the fund's returns. 

Here's a rundown of SoFi Active Investing's commissions and fees:

• $0 commission to trade stocks, ETFs, and options
• Margin loans are 11%
• $50 for the first sale of an IPO within 120 days of IPO, $5 for each subsequent sale
• $25 for account inactivity for the previous 6 months
• $0 brokerage account closure fee (IRA closing fee $20)
• $100 account transfer fee
• $0 deposit or withdrawal fees
• $0 wire transfer of funds into your account (though your bank or transferring firm might charge a fee)
• $25 wire transfer out
• $0 electronic statements, trade confirmations, prospectuses, and tax forms
• $2 paper confirmations
• $30 returned ACH/insufficient funds
• $50 to participate in voluntary corporate actions
• $22.10 per $1 million of the price of the transaction (sells only), rounded up to the nearest penny: SEC regulatory trading fee
• $0.000119 per share for each equity sell, rounded up to the nearest penny, with a maximum of $5.95 per trade: FINRA Trading Activity Fee (TAF)

How This Broker Makes Money From You and for You

With fewer brokerages charging commissions these days, it's less obvious how they stay in business. Here are some behind-the-scenes ways SoFi Active Investing makes money from you and for you.

• Interest paid on cash: SoFi Active Investing earns interest from uninvested cash held in customer accounts. According to SoFi, "This is done through an FDIC program that also helps keep members' cash safe." Unlike some brokers, SoFi does not share the interest it earns with customers.
• Interest charged for portfolio loans: SoFi Active Investing now offers margin loans at 11%.
• Stock loan programs: SoFi earns revenue by loaning stocks in your account for short sales, but it does not share that income with you. Active Investing members can opt in or out of share lending through their accounts.
• Payment for order flow: Some brokers earn money by accepting payments from market makers for directing equity and options orders to them—a practice called payment for order flow (PFOF). SoFi Active Investing accepts payment for order flow, but it is relatively modest at $0.00102 per share. The company will also receive payment for order flow on options trades, although the statistics are not available yet because it is a new product offering for SoFi.
• Price improvement: SoFi Active Investing reports price improvement of $0.00206 per share.
• Portfolio margining: Portfolio margining computes real-time margin for stock and options trades based on risk instead of fixed percentages. SoFi Active Investing does not offer portfolio margining to its customers.

Account and Research Amenities

SoFi offers a no-frills investing experience and lacks some of the account and research amenities you might expect from a larger broker.

Stock Screener

SoFi Active Investing does not have a stock screener.

ETF and Mutual Fund Screener

SoFi Active Investing does not have an ETF screener. It does not offer a mutual fund screener.

Options Screener

SoFi Active Investing does not offer options trading or an options screener.

Fixed Income Screener

SoFi Active Investing does not offer fixed-income products or a fixed-income screener.

Tools and Calculators

SoFi offers a decent selection of tools, estimators, and calculators, which are gathered on the tools and calculators page. They are intended to help you with general financial planning, from creating a budget to seeing if you're on track for retirement.  However, SoFi does offer several tools, estimators, and calculators for investors to utilize to get a better handle on their financial situation. These include:

• Student loan calculators
• Personal finance calculators
• Investment calculators
• Debt payoff tools and calculators
• Budgeting and saving calculators
• College and scholarship tools
• Mortgage calculators
• Insurance calculators

Trading Idea Generators

While SoFi does not offer a specific trading ideas generator, the SoFi mobile app has a social trading feature that allows you to view other investors' activities. You can follow friends, family, and other SoFi members to see their holdings, watchlists, and how they stack up against the market and other investors. Participation is optional, and you must manually enable it in the mobile app. Social trading is not available for Automated Invest (robo) accounts.

News

SoFi curates news from multiple news outlets. Fresh, relevant headlines appear periodically throughout the trading session, and you can click on any news headline to read the entire story.

Third-Party Research

SoFi does not offer any third-party research.

Charting

Charting is available on the desktop and mobile platforms. In both cases, the charting is very basic compared to what is offered by many other brokers. You can pick a symbol and a chart timeframe (from one day to five years), but that's about it. All charts are displayed as line charts. There are no intraday time frames, so you can't take a closer look at the market—and you won't find any drawing tools, technical indicators, or chart overlays. That all being said, the charts are clean and easy to read, even within the limited space of the app.

Cash Management

SoFi Active Investing offers investors the opportunity to earn interest on their uninvested cash. Once investors have signed up for the brokerage cash sweep program, the uninvested cash is automatically swept into the account. The cash can be withdrawn or invested in new assets at any time.

Fractional Dividend Reinvestment Plan (DRIP)

All Active Investing brokerage and Active IRA accounts at SoFi can participate in DRIP programs (SoFi Automated Investing accounts are not eligible). Once you enable dividend reinvestment, qualified dividends will be reinvested directly into the stock that paid the dividend. The price is determined by the market when the reinvestment is made, typically within three business days of the dividend payment date. SoFi offers fractional shares on eligible stocks, so dividends can be reinvested in fractional shares on these same stocks.

SRI/ESG Research Amenities

SoFi Active Investing does not support screening based on ESG/SRI factors.

Portfolio Analysis

The SoFi desktop and mobile platforms don't provide any portfolio analysis tools. However, SoFi members have free access to financial advisors who can review their portfolios and provide actionable advice. All SoFi Investment Specialists are registered as investment advisor representatives and hold the Series 65 or another qualifying examination or designation. The advisors are held to a fiduciary standard, meaning they have to act in their clients' best interest.

Education

SoFi has a growing library of articles on various financial topics within the SoFi Learn page. You can search articles by subject (investing, financial clarity, budgeting and goals, homeownership, debt payoff, student loans, credit, and life and career) or by life stages (finishing your degree, building your career, starting a family, achieving financial freedom, growing wealth, preparing for retirement, and going to college). Alternatively, you can enter keywords in the search bar to find what you're looking for.

The investing-specific content is suitable for beginners and covers basic concepts like "What Are Cyclical Stocks?" and touches on more in-depth topics such as "A Guide to Options Trading." In addition to educational articles, SoFi offers free educational seminars, meetings with financial advisors, and career counseling. Additional content is available on the SoFi blog, and there's a reasonably comprehensive list of FAQs. SoFi doesn’t offer an investing glossary or any educational videos.

Recently, SoFi launched an educational hub centered around alternative investments—following the addition of alternative investments such as real estate, commodities, private equity, and unicorn IPOs in January 2024. This new alternative investment educational hub gives investors all the resources they need, from alternative investing basics to specific investment information.

Customer Service

• Support is available Monday to Friday from 5 a.m. to 5 p.m. Pacific Time by chat or phone.
• Members can Tweet @SoFiSupport for help via X (formerly Twitter).
• SoFi has no live brokers.
• A virtual assistant is available 24/7 to answer general questions and direct you to specific web pages.
• Customers can search for a topic or find a link in the Help Center.

Security

• SoFi offers two-factor authentication on all platforms.
• Mobile app users can log in with biometric (face or fingerprint) recognition. 
• SoFi has Standard Securities Investor Protection Corporation (SIPC) coverage up to $500,000 and $250,000 for cash. There is no excess SIPC policy.
• There is no security guarantee. Some brokers offer security guarantees that cover 100% of losses due to unauthorized activity, but SoFi does not offer this. 
• The company reported no severe or widespread platform outages.
• There were no reported data breaches.

Transparency

SoFi Active Investing is clear about its trading costs: You can buy and sell stocks, ETFs, mutual funds, options, and fractional shares for $0. The fee disclosure page does a good job of pointing out that, while you won't pay a commission to trade ETFs, you pay management fees that reduce the fund's returns. Other costs, including paper statement fees and SEC regulatory trading fees, are stated clearly on the fee schedule page. SoFi now offers margin trading and publishes the details on a dedicated margin investing page.

SoFi has made headlines over the years for operating unlicensed mortgage servicing and firing former CEO Mike Cagney amid a sexual harassment scandal in 2017. However, FINRA shows the brokerage has a clean record with no disclosures for criminal matters, regulatory actions, civil judicial proceedings, or financial matters.

Available Account Types

SoFi Active Investing has a limited amount of account types:

• Individual or joint taxable accounts
• Traditional individual retirement accounts (IRAs)
• Roth IRAs
• Rollover IRAs
• Simplified employee pension (SEP) IRAs

SoFi Active Investing offers a more limited subset of accounts than the SoFi Automated Investing solution, but most investors will be able to work with the available accounts. The key omission is a custodial account.

The Bottom Line

SoFi wants to play a key role in your life by being a one-stop shop for all your financial needs—from credit cards and cash accounts to home loans and investing. Its desktop and mobile platforms are no-frills by design to appeal to beginners, casual investors, and those who don't want to invest time in a platform with a steep learning curve. You can keep track of all your SoFi accounts in a single SoFi mobile app, which is a plus if you want to spend less time and energy managing your money overall.

Still, that doesn't necessarily mean SoFi's brokerage is right for you. It's not a good choice if you want to trade anything besides stocks, ETFs, mutual funds, and basic options. With SoFi Active Investing, you don't have access to retirement-friendly bonds or other instruments like futures or forex. Moreover, SoFi Active Investing won't work if you want a robust trading platform, customizable charts, or the ability to perform fundamental or technical analysis prior to placing a trade. 

Overall, SoFi Active Investing is best suited for new investors seeking low costs, low account minimums, and an easy-to-use, modern mobile app for on-the-go investing. Active traders and experienced investors will want to look elsewhere.

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