Betterment for Advisors has made two updates to its platform, giving advisors the ability to open paperless trust accounts and cutting fees for clients with more than $2 million.
Trusts are commonly used for inter-generational wealth planning, in which a client sets aside money for an advisor to manage as a trustee on behalf of a third-party, such as a child or grandchild.
‘We’re really focusing on two things right now, the outsourced investment management and the streamlined operation,’ said Cara Reisman, head of Betterment for Advisors. ‘This specific enhancement on the ability to initiate the opening of trusts on behalf of their clients speaks to the effort of streamlining the back office.’
Betterment has been pushing to make its advisor platform competitive in a crowded marketplace. Earlier this month, the company announced plans to integrate RightCapital’s financial planning software into the platform, which already includes paperless account opening, tax management and trading capabilities.
‘We’ve been building out a lot of features, particularly over the last few months,’ Reisman added.
Betterment is also sweetening the deal for advisors' clients on its platform, regulatory filings show. The company disclosed in a form ADV part 2 filed with the Securities and Exchange Commission last week that it is giving a 10 basis point (bps) discount on its management fee for client assets above a $2 million threshold.
A Betterment spokeswoman said the firm used to charge a flat 25bps for all client assets but will now only charge the 25bps fee for client assets up to $2 million and charge 15bps thereafter.
Betterment is best-known for its robo-advisor, which markets directly to consumers. Betterment for Advisors acts as a back-office manager for RIAs, giving them access to tools for portfolio rebalancing, account management, billing and client communication. The platform also gives advisors who want to outsource their portfolio construction and investment management access to a range of model portfolios.
These are: Betterment’s all-ETF portfolio, an SRI variation of the Betterment portfolio, both of which are made up of third-party ETFs, a Vanguard-run portfolio, a Goldman Sachs smart beta portfolio and a BlackRock fixed-income portfolio.
Betterment manages $15 billion across all its business lines and has about 400 RIA firms on the Betterment for Advisors platform. A Betterment spokeswoman declined to comment on the total assets on the Betterment for Advisors platform.