Betterment Adds Human Advisors

Posted January 31st 2017


via Fast Company

Betterment pioneered the idea that software could do a better job of managing investments than good old-fashioned humans. But now the robo-advisor is turning to tradition—and wealthier customers—with the introduction of higher-tier products that layer in-house financial advisors on top of portfolio technology.

“This offering appeals to the folks who want a little more hand-holding,” says Jon Stein, founder and CEO. He expects to see a relatively small percentage of Betterment’s 210,000 existing customers, who pay 0.25% in fees, choose to upgrade. Instead, the hybrid plans are designed to appeal to a new category of customer, one that might not otherwise have felt comfortable with Betterment’s software-based approach to investment allocation.


Betterment hopes that the hybrid strategy will increase its average account size, which is currently about $29,000. “The new tiers are also a tacit acknowledgement that robo-advisors and established players are fast-converging, and increasingly competitive,” writes Fast Company’s Ainsley O’Connell. It’s a shifting landscape Betterment has to navigate, as technology is enabling everyone to create offers for both the retail consumer who are looking for cheaper options as well as the larger investor. Betterment’s addition of human advisors does suggest that they are seeing many customers still skeptical about trusting robots to make financial decisions on their behalf.