Betterment

[gcgang]

http://mebfaber.com

Here's a link to a recent Meb Faber blog on the different robo advisors.

Seems to say while each has a little different allocation, all get to the same place. He's very enthusiastic that these robos are a great improvement over current financial advisor model, and will help, especially inexperienced investors.




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[Chuckanut]

It seems that Betterment is shifting gears and raising some fees:

https://www.kitces.com/blog/betterme...5c3d2-57089725

Quote:

Specifically, while Betterment will still maintain a 25bps advisory fee for its core digital business, the company announced that for accounts over $100,000, fees are being increased from 15bps to 25bps (a whopping 66% price increase for large accounts paying the “old” rates!), and large accounts will also have the opportunity to use Betterment Plus (offering an annual meeting with a CFP professional) for 40bps, or Betterment Premium (offering year-round access to a team of CFP professionals) for 50bps, or can be referred to the new Betterment Advisor Network (at whatever rate the outside advisor charges, plus the 25bps Betterment for Advisors platform fee).

Hmm.... this is not where I thought so called Robo-advising would be going. I'll stick with my own advising and a relatively simple portfolio of USA stocks/Int stocks/USA Bonds/Cash.

[RobLJ]

I saw the same or similar article; however, I think the raise in fees seems largely to allow person to person advising (which does entail costs, obviously).

I suspect Betterment/robo advising offers a good way for those starting out to invest at a low cost; the value-added for their additional services once you hit the 100k level and above remains to be seen.

Quote:

Originally Posted by Chuckanut It seems that Betterment is shifting gears and raising some fees: https://www.kitces.com/blog/betterme...5c3d2-57089725 Hmm.... this is not where I thought so called Robo-advising would be going. I'll stick with my own advising and a relatively simple portfolio of USA stocks/Int stocks/USA Bonds/Cash.

[DrRoy]

Quote:

Also, Betterment doesn't call me offering me ideas or bug me about anything. It just grows. I think a Vanguard Target Date fund is probably the same so it's possible I'm just being an idiot falling for clever marketing. So... I'm doing a bit of a comparison to see which type of thing I like more. I do like their fund selection process and I like their approach quite a bit.

Keep in mind that these two options are not trying to do exactly the same thing - there is a bit of apples and oranges between them. Betterment charges a lower fee than a human FA to establish and maintain a particular AA over time. It is done by a computer and you do not get the same degree of hand holding that a FA gives, but do not pay for that either. A Target Date fund also automatically manages the AA, but it further reduces the equity portion over time under the concept that you want less exposure to equity risk as you approach retirement.