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Betterment, the leading independent robo advice platform, is adding a human touch to its offerings, and by doing so, acknowledging it is directly competing against the biggest wealth management firms.
"When we launched in 2010, we said that if we were successful that all of the incumbents would look to replicate our platform," says Betterment CEO Jon Stein. "We've long considered Schwab and Fidelity to be our primary competition and have anticipated over time that we would inevitably become even more competitive with them."
Betterment announced on Tuesday it is launching hybrid advice tiers that will exist alongside its base automated advice offering and its RIA platform: one that allows clients a yearly check-in call with in-house CFPs out of its Manhattan offices; a second that offers unlimited access to Betterment's in-house CFP team, and a third that puts clients into a direct adviser relationship, through its Advisor Network.
The first new tier, Betterment Plus, has a fee of 40 basis points and an account minimum of $100,000. The second tier, Betterment Premium, charges 50 basis points and account minimums of $250,000. Dedicated Advisor is the name of its third offering, and advisers it makes referrals to will set their own pricing.
"In our Advisor Network, we are working with CFPs — most of whom are members of the FPA who we have a relationship with," Stein says. "We do also have XY Planning Network firms in the network as a result of our partnership. We are excited about deepening those relationships."
Betterment will not get any fee for these referrals, Stein says, nor will firms have to pay to be part of the network. The firm does do some additional vetting before accepting advisers into the network, and there is already a...