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Betterment for Advisors Now Lets Advisors Choose the Investments

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What You Need to Know

  • Advisors can choose the ETFs they want to use on the platform.
  • They are no longer limited to using ETFs that Betterment offered.
  • Advisors can also incorporate their own capital market assumptions used for planning and advice.

Betterment for Advisors has expanded its investment flexibility to include advisors’ own model portfolios of ETFs on the platform as well as their own capital market assumptions used for financial planning, advice and performance projections provided to clients.

“We want to make sure firms are truly interested in using the platform,” said Jon Mauney, general manager of Betterment for Advisors. ”We’re coming for Schwab and Fidelity, though we’re obviously much smaller.”

Before the launch of Custom Model Portfolios, as the new offering is called, advisors on the   Betterment for Advisors platform could only use a fixed set of asset classes defined by Betterment and they had no input with respect to fund selection. Now they can choose any ETFs to build their portfolios as well as different asset allocations and for no additional fee, according to Mauney.

“Our main priority in 2021 is getting down what advisors need to run their practices more efficiently,” Mauney said.

In addition to the new, expanded investment flexibility, Betterment for Advisors offers  automated rebalancing, tax loss harvesting, asset location (such as tax-free assets in taxable accounts), tax-optimized sales for withdrawals and glide path rebalancing for retirement funds.

As part of its expanded offering, Betterment for Advisors is planning to expand its workforce this year, hiring for products, sales, relationship management, support and software engineering positions.

Currently, 600 advisory firms use the Betterment for Advisors platform, and in 2020 their asset levels on the platform grew three times as fast as previously, Mauney said. He wouldn’t disclose the assets under management on the platform. The parent company has about $27 billion in AUM.

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