XY Planning Brings Betterment Institutional to Next-Gen Clients

New partnership with XY Planning Network and Betterment Institutional will provide investment-related services to smaller accounts

In an effort to bring investment-related services to the younger generations of clients – who often hold smaller accounts – XY Planning Network has partnered with Betterment Institutional, an end-to-end digital solution for RIAs.

“Providing investment related services to smaller accounts is incredibly time consuming, and forces many advisors to focus on high-net-worth clients,” said Alan Moore, co-founder of XYPN, in a statement. “Betterment Institutional brings investment management services to an entirely new generation of client.”

XYPN, an organization founded in 2014 of fee-only financial advisors who specialize in working with Generation X and Generation Y clients for a monthly fee of about $100 to $250 a month, provides its advisors with turnkey support to start, run and grow their practices.

As part of its turnkey solutions, XYPN will promote Betterment Institutional as a preferred provider of portfolio automation services.

By the end of its inaugural year, XYPN’s membership had grown to more than 60 members.

Betterment Institutional, which was launched in October, provides advisors with a self-branded, automated platform to serve existing clients and attract new clients with Betterment’s investing, tax harvesting and automated rebalancing offerings.

As XYPN co-founder Michael Kitces sees it, Betterment Institutional will provide XYPN with “a powerful all-in-one alternative to traditional custodial platforms for the financial-planning-centric advisor, at a very appealing cost.”

“It’s difficult for younger advisors serving their peers to work with a traditional custodian, given custodial minimums for advisory firms, the transaction costs on small accounts, and the expense of supporting technology that advisors must bear to serve clients efficiently,”  Kitces said in a statement.

Betterment Institutional offers a globally diversified portfolio of ETFs, designed to provide advisors with the best possible expected returns for helping clients achieve their long-term objectives.

The Betterment Institutional platform provides the advisor with a dashboard that allows the advisor to view and manage existing clients and their assets on the platform. The advisor can also use the dashboard to invite prospects to sign up for the platform.

Betterment provides the engine for the platform, but everything the client sees is branded with the advisor’s name and logo.

Betterment also takes care of the billing and collection of fees from clients. Betterment itself charges a 25 basis-point fee, but advisors using the platform are free to set their own fees, based on the specific services they offer to individual clients.

Steve Lockshin, a partner at Betterment Institutional, is enthusiastic about the new partnership with XYPN.

“XYPN is a pioneer in connecting advisors of all asset levels with industry-leading resources, technology and support," Lockshin said in a statement. "I look forward to bringing Betterment’s technology to a wider range of advisors and supporting those advisors as they grow.”

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