Betterment clients can now buy one-time access to human financial advisers

For a flat fee, users can receive guidance on major life events without paying for Betterment Premium

Sep 12, 2018 @ 11:42 am

By Ryan W. Neal

Betterment is making its team of human financial advisers more accessible to clients with smaller accounts.

The digital advice platform now offers "advice packages" to investors looking for one-time guidance for a flat fee. Any investor can purchase a package — which includes an actionable financial plan, educational content and a call with an adviser — effectively opening up Betterment's certified financial planners to clients who either don't meet the investment minimum for Betterment Premium or don't want to pay the additional fee.

The packages are themed around common events in an investor's financial life: getting started, financial checkup, college planning, marriage planning and retirement planning.

Price varies per package, with the New York Times reporting the "getting started" package costs $149, while retirement planning will run $399. A Betterment spokesperson told InvestmentNews those prices aren't set in stone yet, and Betterment senior financial planner Nick Holeman said the company will consider launching more packages in the future based on customer demand.

"We've given our customers access to our team of advisers for quite some time now, and what we realized was that for most customers, what triggers the need to speak to an adviser is a life event, a big change," Mr. Holeman said.

(More:Robo-advisers and human advisers adopt each others' biggest advantages)

He denied that the robo-adviser is struggling to attract clients to Betterment Premium, which charges 40 basis points (compared with 25 for the basic digital service) and requires a $100,000 minimum balance for advice on held-away assets and unlimited access to advisers.

But the average Betterment client is a 37 year old with $40,000 invested who still wants or needs advice on occasion, Mr. Holeman said.

The packages also give Betterment an opportunity to introduce its financial advice services to customers on its 401(k) platform, Betterment for Business. Instead of just offering a retirement savings account, employers could offer help in other areas, such as student loan repayment or buying a house.

Plan participants could buy an advice package at any time, but Mr. Holeman said Betterment is exploring the possibility of letting employers buy a certain number of packages as a benefit to employees. In addition to exposing more people to Betterment's range of services, Mr. Holeman said it makes the overall adviser more valuable.

"You can't look at retirement in just a vacuum," he said. "No single goal is really a bubble. You have to look at everything together."

While Betterment is the first among the major robo-advisers to offer human financial advice for a flat fee, other startups are also adopting the idea. Facet Wealth, a digital adviser that announced $33 million in funding on Monday, will offer a menu of financial planning services for a flat subscription fee.

Some human advisers also have introduced the idea of providing financial planning services for a one-time fee in addition to charging an AUM fee for asset management, especially firms targeting younger clients.

Stash Wealth, an RIA in New York City (not to be confused with the mobile micro-investing app, Stash) offers "Stash Plans" to High Earner Not Right Yet (HENRY) clients. The firm will review the client's situation and create a custom plan that includes account optimization, automated saving to build wealth and an investment plan. Stash Wealth charges individuals and couples a one-time fee of $997, and entrepreneurs $1,597 for a deeper dive into business strategies.

(More: Advisers home in on HENRYs overlooked by banks, retirement-plan providers)

Clients can take the plan and execute it on their own, or hire Stash Wealth to implement the plan and manage assets for them.

"We think everyone should have the opportunity to 'get a financial plan without marrying a financial adviser,'" Priya Malani, co-founder and partner at Stash Wealth, said in an email. "It's about time the financial services industry begins to innovate instead of trying to offer a one-size-fits-all approach."

XY Planning Network co-founder Alan Moore said some of his group's members also provide one-time services for a price similar to Betterment's, but most focus on "comprehensive planning and tend to have ongoing relationships with clients."

(More: XY Planning Network payment tool now available for all fee-based planners)

Mr. Moore said there is a huge need for what he calls "level one planning," and he said he is excited to see more firms provide entry-level services to clients.

"Not everyone needs, wants [or] can afford an ongoing relationship with an adviser, so this is a great place to start," he said. "I might be concerned as an adviser leveraging [Betterment's] TAMP, as they are now in direct competition with them, but the advisers I've talked to understand they provide a much more comprehensive service, so they aren't worried about Betterment taking their clients."


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