Betterment will begin offering a "premium" plan that will combine human advice from financial advisors alongside its automated service for 50bps of AUM. The 50bps plan will feature unlimited financial advice and require a $250k minimum balance. With 50 Bps the economics start to make more sense, also likely the average Aum per client will go up. Looks like a smart move
Betterment LLC will begin offering recommendations from certified financial planners and other experts alongside its computer-driven service, which aims to build investment portfolios for a fraction of the fees charged by traditional brokers. The human touch will cost 50 basis points of clients’ assets for a “premium” plan allowing unlimited advice from financial planners, roughly double the charge for the company’s digital service, depending on the account size. The move marks an evolution for robo-advisers as they add more services in an attempt to win high net worth individuals and compete against traditional asset managers. Citigroup Inc., whose venture capital arm has participated in at least two funding rounds for Betterment, previously said wealthier clients wouldn’t move a larger chunk of assets to robo-advisers.
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