Betterment is no longer simply a robo-advisor with additional platforms for financial advisors and 401(k) plans. Starting today, Betterment’s retail platform is offering advisory services from certified financial planners and other licensed financial professionals.
Customers can choose between a Betterment Plus account, which provides an annual planning call from a licensed advisor plus monitoring of their accounts throughout the year; a Betterment Premium account, with unlimited access to licensed professionals who advise, plan and monitor accounts throughout the year; or the traditional Betterment Digital service, which does not include any advisory service. Customers choosing one of the two new professional advisory plans have access to an advisor by phone or email and schedule phone calls in advance.
“Betterment can now meet the needs of its customers however customers want to invest and receive advice, whether it’s through the existing digital offering or also working in conjunction with a team of licenses experts,” according to a company statement. “The new plans give customers the best of both worlds — smart technology and access to financial experts.”
They also provide a potential opportunity for financial advisors, who want to join Betterment’s roster of licensed professionals working for the Betterment Plus or Betterment Premium service financial or who are already part of the Betterment for Advisors network and can receive referrals from the new plans.
The Betterment Plus account costs 40 basis points and requires a minimum $100,000 balance; the premium offering costs 50 basis points and has a $250,000 minimum balance. There is no charge for either account after the first $2 million in assets.
Betterment’s traditional Digital plan charges a flat 25 basis points. It had been 10 basis points higher for many customers with less than $10,000 in assets and 10 basis points lower with $100,000 or more in assets. Now all digital customers will be charged the same, and current customers can upgrade to one of two new plans and schedule a call.
Alex Benke, vice president of financial advice and investment at Betterment, told ThinkAdvisor that the new offerings are in part a response to the many “advanced questions” that the firm had been receiving from Gen X and baby boomer clients about their investments, including questions just to confirm a decision that they had already made or planned to make.
More broadly, the new offerings are a part of Betterment’s larger goal to become a “one-stop shop for financial advice,” said Benke. “We get you to the place you need to be and help you transition to a new level advice as your needs change.”
Betterment has hired about a dozen licensed financial professionals to staff the new offerings and will be looking to expand that roster, in line with demand.
“We’ve hired advisors from different experience levels … from firms like Merrill, Vanguard and USAA,” said Benke. “They don’t have to market themselves, or push internal products. It’s a nice situation to be in as an advisor.”
Betterment has $7.3 billion in assets under management from about 200,000 customers. More than 400 advisory firms use its platform, but the firm doesn’t break down how many individual advisors are involved or how many assets they manage.
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