Betterment vs Charles Schwab
Business model, scale, and a side-by-side Litmus framework score — which model wins, and for whom.
Schwab's robo is "free" but monetizes cash drag; Betterment charges a transparent fee and avoids the conflict.
At a glance
| Metric | Betterment | Charles Schwab |
|---|---|---|
| Revenue | ~$350M (2025 est.) | ~$23.9B (FY2025 actual) |
| Profit | Profitable (EBITDA positive) | ~$8.9B (FY2025 net income: $8.852B actual) |
| Active users | 1,000,000+ customers | 39.1M Active Brokerage Accounts (Q1 2026) |
| Employees | ~625-716 (varies by source/date; e.g. ~716 as of Dec 2025 per Revelio Labs, ~625-640 as of April 2026 per LeadIQ/Unify) | 33,500 (Q1 2026, up 4% YoY) |
| Founded | 2008 | 1971 |
| HQ | New York, NY | Westlake, TX |
LLitmus Framework Score
Overall: Betterment 89 · Charles Schwab 93
Customer Segment
92
97
Value Proposition
95
96
Marketing Channel
88
92
Engagement
84
89
Income Source
90
98
Asset Validation
93
94
Core Operations
87
90
Strategic Alliance
85
87
Expense Validation
89
93
Betterment leads 0 modules, Charles Schwab leads 9. Overall edge: Charles Schwab.
Head to head
| Dimension | Betterment | Charles Schwab |
|---|---|---|
| Headline fee | 0.25% transparent | 0% (Intelligent Portfolios) |
| How it earns | AUM advisory fee | Forced cash allocation / float |
| Scale | $70B robo AUM | $70B+ robo AUM, vast brokerage |
| Positioning | Conflict-free fiduciary | Cross-sell of broader franchise |
FAQ
Is Betterment or Charles Schwab a better business?
Schwab's robo is "free" but monetizes cash drag; Betterment charges a transparent fee and avoids the conflict. It depends on what you optimise for — see the module-by-module breakdown above.
What is the difference between Betterment and Charles Schwab's business model?
Betterment operates in Fintech (The smart way to invest and save), while Charles Schwab is Fintech / Banking (Own your tomorrow). Their revenue, scale and Litmus scores are compared in detail above.
Which is more profitable, Betterment or Charles Schwab?
Betterment: Profitable (EBITDA positive). Charles Schwab: ~$8.9B (FY2025 net income: $8.852B actual).