What A Human Advisor Can Do At A Robo Shop

February 06, 2017

In a quest to become a one-stop-shop financial advice solution, Betterment has expanded its all-digital offering to include two new services centered on human advisors. As a Betterment client, you now can get automated portfolio management in an all-digital platform, or you can pick up the phone and talk to an actual advisor. Alex Benke, VP of financial advice and planning at Betterment, tells us why the well-known robo advisor with some $7 billion in assets is now going the human route.c

ETF.com: What drove Betterment to add human advisors to its lineup of services? Is this about doing what advisors do, but better? Or does this decision have anything to do with meeting fiduciary duty under the DoL rule?

Alex Benke: Since the beginning of Betterment, we have offered consultations with customers of high-enough balances. This was just to deal with the questions they had above and beyond the advice we gave through our digital tools. The new offerings are basically a version of that, with lower balance requirements, so anyone can get access to an additional helping hand if they want.

This had nothing to do with the fiduciary rule. All of our plans, whether they’re digital or advice from a person, are fiduciary advice and qualify under the rule. That's always been the case.

ETF.com: Walk me through details of these “Plus” and “Premium” plans. They’ll have account minimums of $100,000 and $250,000, and cost 0.40% and 0.50%, respectively. That compares to 0.25% for the all-digital platform, right?

Benke: That's right. Anyone can get access to our digital tools. The advice provided through those tools handles most situations. Unlike competitors that just provide a portfolio, we also provide financial-planning-type advice.

For example, RetireGuide will take a look at all of the accounts you have—both at Betterment and outside—and make recommendations as to how much you should be saving across those accounts, and in which accounts you should be saving in, in order to have the best tax outcome. It's personalized advice that takes in that full picture.

The additional plans are for people who either have more advanced questions they can't get answers to, or there's someone who really just needs confirmation from a person that they're doing the right thing and acting in the right way.


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