Betterment Expands and Reaches for More Advisor


In an effort to broaden its client and advisor base, robo-advisor platform Betterment recently announced that it is going to start offering additional investment options to its advisor offering starting in October. The Betterment Institutional platform will also be renamed Betterment for Advisors. Tom Kimberly, the managing director of Betterment, told ThinkAdvisor that the change of name is designed to provide “more clarity to the market about what we do and who we partner with.” The new name is designed to clarify the fact that Betterment is working only with independent advisors and not brokers or advisors in the institutional or retail channels.

A recent press release by Betterment states that the increased array of investment offerings comes in response to “consistent feedback about the need for greater portfolio flexibility.” Kimberly told ThinkAdvisor that “this is the first step we’re taking to create that flexibility on that platform. We intend to work with more partners to make additional investment strategies available.”

The new additions to the investment platform include exchange-traded funds (ETFs) managed by Vanguard and Goldman Sachs Asset Management. The latter group of ETFs were chosen to provide advisors with the option of exposing their clients to core stocks and bonds as well as emerging markets and REITs. Advisors can use the Vanguard strategic model portfolios to put their clients in both domestic and international holdings at a low cost in addition to global investment grade bonds. These will be offered in addition to Betterment’s current portfolio of 12 ETFs. Advisors will be able to choose investment models that match their clients’ risk tolerances and investment objectives.

Kimberly described the new offerings as only the next step in the company’s development of its advisor platform. He anticipates that the company will be announcing further additions to its lineup before the end of the year. Betterment currently has nearly $6 billion in AUM with a network of more than 350 advisors. (For related reading, see: Betterment Review 2016: Fees and Investment Facts.)