With eMoney in its back pocket, Fidelity Investments won't exercise its option to continue Betterment deal as it nears launch of its own robo
The one-year semi-exclusive alliance never caught fire with Fidelity RIAs and the Boston giant will now use eMoney as kindling for a new digital-for-RIA launch
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UBS bets its 'wealth' future on ex-Schwabbie Naureen Hassan, a corporate digital A-lister, who analysts give a fighting chance to transcend PaineWebber's ossified culture
Still a $2-billion cash-flow cow, the Swiss bank's 6,000-broker, US-based wirehouse is milking aging broker relationships with aging investors but needs a new kind of human presence, empathy, mindset and smarts to draw in Gen Z.
July 16, 2022 at 1:35 AM
Fidelity will hire 4,000 staff in first half -- a staggering number but a tapering off from 'unprecedented' rate in 2021-2022 that catapulted it to 68,000 employees
The $10.3 trillion giant explains its hiring -- in a layoff environment -- as an RIA-like goal, namely having the human bandwidth to develop 'lifetime' relationships with its 40 million investors
February 17, 2023 at 2:49 AM
Fidelity Investments loses Kathleen Murphy who largely caught up Fido to Schwab (near $4T) on the retail side by reversing net promoter scores
The 'no whining allowed' leader of the Boston giant's retail business, who oversaw $2 trillion in net new assets, was ready to exit but hung in through a year dominated by COVID-19 challenges
January 23, 2021 at 2:02 AM
Second Betterment exec departs as new CEO Sarah Levy orients to her first month on the job and is confronted by personnel matters
Chief operating officer Dustin Lucien is the latest to leave the New York City robo-advisor, one of at least eight positions open as it prepares a push across multiple business lines to ignite growth.
January 19, 2021 at 6:32 PM
See more related moves
eMoney Advisor LLC
Financial Planning Software
Top Executive: Edward O’Brien
Nexus Strategy
Consulting Firm
Top Executive: Timothy D. Welsh
Betterment, LLC
Financial Planning Software
Top Executive: Jon Stein
Upside
TAMP
Top Executive: Tom Kimberly
Bill Winterberg
Why should RIAs commit assets to Betterment Institutional?
RIAs are fiduciaries.
Betterment Institutional charges, at a minimum, 25bps. RIAs can add, and most often do, a fee on top of that.
Betterment (retail) charges 15bps to 35bps, with 15bps charged on assets over $100k (as of November 20, 2015).
So why would a fiduciary advisor commit assets to BI @ a minimum of 25bps and not recommend clients with >$100k go direct to Betterment retail to pay lower fees?
As I understand, for advisors with <$50 million custodied at BI, there is no material difference in the investment advisory services rendered to the investor. Only above $50 million can advisors begin to offer customized model portfolio allocations to clients in BI.
Please correct me if I’m wrong about “no material difference in the investment advisory services” between Betterment (retail) and BI.
Thank you to Matt @ Saverocity for his thoughts: https://saverocity.com/forum/threads/how-betterment4rias-makes-suckers-out-of-fiduciaries.335343/
Stephen Winks
There are highly advanced technologies here and in Europe which will be priced in the single bps which support “individualized” advice that are directly managed by advisors that preempt the Betterment model. Money managers who desire the use of their investment vehicles by advisors in portfolio construction will give away prudent (fiduciary) process and professional standing (if properly used) for free. We are entering an era of transparency and expert delineation of fiduciary duty which outdates the simple sale of advice products with the advancement of individualized advice in accord with fiduciary duty with an audit path back to statute to prove it. Brokers can no longer just say off hand they are acting in a fiduciary capacity without consequence. There are a lot of brokers whose firms do not acknowledge or support fiduciary duty (and their professional standing), who will be disappointed in their firms inability to support their client’s best interest. RIAs are the solution.
SCW
Stephen Winks
anonymous
Good point Mr. Winterberg and Matt @ Saverocity. I wonder just how many of the 200 RIA’s Betterment serves on the Institutional side (see previous RIABiz article) fall below this $50MM threshold? Looks like a nice regulatory nugget for State and SEC regulators should they become wise to this.
It’s funny, Betterment touts the low fee game to it’s consumers and competitors but it will eat from whatever side of the table the food comes. You can’t have it all! A bit of a moral chink in the armor if you ask me. You see their business model change almost weekly now. It will be interesting to see where this all ends up when the dust settles.
Anybody read… “Where are the Customers Yachts’?” It’s comes to mind here after reading Mr. Winterberg’s comments.
Stephen Winks
Money managers will own the ROBO space. It is like giving away the razor (fiduciary-individualized prudent process) in return for the utilization of their money management services with ETFs being a core holding.
SCW
