SoFi, the digital personal finance platform, has rolled out a new feature that brings automated tax-loss harvesting to its retail investing clients—a tool traditionally reserved for high-net-worth individuals and institutional portfolios. The service is now included with all SoFi Invest accounts, including those using its automated investing product.
Tax-loss harvesting is a technique where underperforming assets are strategically sold to offset capital gains taxes, while maintaining a balanced portfolio. SoFi’s new feature automatically scans user portfolios daily and executes eligible trades while adhering to IRS wash-sale rules—maximizing tax efficiency without requiring client intervention.
According to SoFi, investors with taxable brokerage accounts who use automated tax-loss harvesting could see a 1–2% annual tax alpha, particularly in volatile markets. The firm uses proprietary algorithms to ensure that risk and asset class exposure remain stable even after replacing sold assets with similar alternatives.
Anthony Noto, SoFi CEO, described the update as part of the company’s commitment to democratizing wealth-building tools. “Features like tax-loss harvesting used to require expensive advisors or premium robo-advisor tiers. We’re making this a core benefit for all SoFi Invest members.”
The tool is integrated into the SoFi app and dashboard, allowing users to view harvested losses, estimated tax savings, and year-end summaries. It works across a broad selection of ETFs and diversified portfolios, and can be toggled on or off with a single tap.
This move puts SoFi in direct competition with platforms like Wealthfront, Betterment, and Schwab Intelligent Portfolios, all of which have offered similar features—though often gated behind higher minimums or fees. By offering it for free, SoFi is pushing to attract younger investors focused on long-term portfolio optimization.
📌 Why It Matters:
- Expands access to institutional-grade tax strategies
- Enhances value proposition of SoFi’s investment platform
- Targets Gen Z and millennial investors seeking smarter returns
