Advisor Resources

AI-driven markets and what advisors should watch in 2026 Jan 9, 2026 9:13:18 AM Key market trends advisors should keep an eye on in 2026, including AI-driven valuations, monetary policy shifts, and macro risks affecting stocks and bonds. U.S. markets closed out 2025 with strong headline returns, driven largely by continued enthusiasm around artificial intelligence and a small group of mega-cap technology companies. At the same time, familiar late-cycle questions resurfaced: Are valuations running ahead of fundamentals? And how much patience will markets have for profits that remain more theoretical than realized? Below, we look at what impacted performance in the fourth quarter of 2025 and what financial advisors should be watching in 2026. We cover elevated AI valuations, evolving monetary policy expectations, and the key macro risks that could reshape the outlook for both equities and bonds. AI-driven returns dominated markets in Q4 Stocks rallied in 2025, driven largely by Big Tech companies racing to develop transformative AI. However, that enthusiasm increasingly reflects expectations about future profitability rather than earnings today. And all of those businesses’ investments in AI infrastructure have turned up the volume on talks of an emerging AI bubble. Valuations highlight growing reliance on future AI profits One of the clearest signals of elevated market expectations is the price-to-earnings (P/E) ratio, which compares current prices to current profits. How much are people paying to own the market, in other words, relative to its current profits? If this ratio gets high enough, investors start to ask themselves whether such a steep cost is worth it for a piece of those earnings. Sometimes investors seek out better relative value—one reason international stocks outperformed in 2025—and sometimes they continue paying a premium for growth. But that dynamic becomes increasingly pinned on hopes of hypothetically larger profits down the road, not the earnings generated today. So just how big are those AI hopes right now, and how relatively expensive is it for a share of the U.S. stock market’s earnings? We’re not at dot-com bubble levels, but we’re getting close. AI investment spending is reshaping market leadership Companies are committing enormous capital to expand their computing capacity, betting that scale and infrastructure will be critical to realizing AI’s long-term potential. As those investments have played out, the market has begun to highlight certain players, rewarding firms seen as better positioned to translate spending into durable earnings while penalizing those facing execution challenges. In the fourth quarter, shares of Google rose by nearly 30%, while Oracle and Meta declined by roughly 30% and 10%, respectively. While AI dynamics explain much of recent equity performance, monetary policy remains a critical backdrop for markets in 2026. Easing monetary policy could support markets in 2026 As labor market conditions and inflation have slowed, gradually easing interest rates may help cushion the market. The Federal Reserve cut its policy rate by 0.25% in December, and may do so again in 2026. The chart below illustrates the expected path of the federal funds rate based on both the median projection of members of the Federal Open Market Committee and rates implied by the pricing of market futures contracts. Beyond rate policy, the Fed has also taken steps to support market liquidity. In December, the Fed announced that it will purchase short-term securities to ensure bank reserves are ample, supporting the smooth functioning of the financial system. Kevin Hassett, Director of the National Economic Council, appears likely to be tapped soon as Chair Jerome Powell’s replacement. Hassett would likely lean into a monetary policy accommodative to the economy and markets. Why the macro backdrop remains constructive—but fragile An outlook of continued economic growth, incrementally more accommodative financial conditions, and resilient corporate earnings offer a favorable backdrop for stocks in the first half of 2026. While valuations appear stretched in certain parts of the market, the last quarter has seen overall price action cool off, potentially setting the stage for further gains. The impact of tariffs will likely continue to fade as we approach the one-year anniversary of “Liberation Day.” The Trump administration will take a more cautious approach to instigating surprises in the trade war in 2026, fearful of worsening affordability and market volatility in a midterm election year. Geopolitical developments involving President Maduro of Venezuela have already injected geopolitical uncertainty this year, yet we would expect the market impact to be muted overall, with effects, if any, showing up in oil prices. Key risks that could disrupt the market in 2026 Despite a constructive baseline outlook, several downside risks warrant close attention. The main risk for markets lies in currently weak but stable job growth deteriorating significantly. A sharp rise in the unemployment rate would bring with it a downturn in consumer spending and a vicious cycle of more anemic demand leading to further job cuts. A second, related risk involves financial conditions tightening rather than easing. A higher cost of borrowing and increased rates on safer securities could undermine the prices of riskier financial assets.

2026 portfolio updates: What financial advisors need to know Jan 5, 2026 10:15:00 AM Updates to the Betterment managed strategies are coming soon. As part of Betterment’s investment oversight, our Investing team regularly reviews and updates our portfolio strategies to align with changing market conditions. In our 2026 portfolio updates, we are implementing strategic adjustments across multiple portfolios, guided by updated capital market assumptions, the expected risk and return profiles of asset classes. Portfolios refreshed by the 2026 strategy changes: Core portfolio Value Tilt portfolio Innovative Technology portfolio All Socially Responsible Investing (SRI) portfolios: Broad, Social, and Climate Impact Crypto ETF portfolio Key investment shifts: equities, bonds, and crypto Equities: We are modestly increasing our exposure to U.S. large-caps, while reducing exposure to U.S. mid-caps, for nearly all portfolios. This better aligns our portfolios with benchmarks while maintaining strong diversification. Fixed Income: This year, we’re introducing an additional actively managed bond fund to our non-SRI portfolios. Unlike traditional passive bond strategies, which tend to overweight U.S. Treasuries, active management gives us the ability to be more flexible and seek opportunities across broader areas of the bond market. This added flexibility helps portfolios stay aligned with shifting market conditions. In a declining interest rate environment, segments like securitized products and high-yield bonds may offer more attractive risk-adjusted return potential. At select risk levels across our portfolios (including all three of our SRI portfolios), we’re also adjusting short-term bond allocations by slightly increasing exposure to short-term Treasuries. These changes help smooth the glide path used in our auto-adjust feature, which de-risks clients as they approach their goal’s target date. Betterment Crypto ETF portfolio: We are increasing our bitcoin and decreasing our ethereum allocation to align with its market capitalization weight. Further changes include obtaining these exposures through lower-cost funds, which reduces the portfolio’s weighted average expense ratio of the portfolio by 0.10%. How these updates affect your clients’ portfolios Similar to last year’s updates, we plan to update allocations for newly funded portfolios towards the end of January 2026. For existing goals, our automated rebalancing feature will transition client portfolios to the new target portfolio weights, using clients’ dividends, deposits, and withdrawals and sell/buy rebalancing to manage the transition tax-efficiently. Funds that are no longer in the target allocation may be retained to help reduce potential tax impact, while future cash flows will be directed toward the new primary holdings. Rebalancing will respect any gains allowance, or other rebalancing settings that you’ve set for your clients’ goals. You can log into the Advisor Dashboard to review and update your client gains allowances, or disable system rebalancing if you prefer to rely on only cash flows to reduce drift in your client accounts. You’ll want to adjust settings before the end of January to ensure they're in effect before portfolio updates are made. Learn more about Betterment’s investment approach If you’d like to find out more about Betterment’s approach to investing, you can check out these articles: Portfolio Construction Process: Core, Value, Innovative Technology ETF Selection Methodology

What’s new from Betterment Advisor Solutions Dec 19, 2025 9:18:01 AM Explore the latest updates designed to give you more control, transparency, and efficiency across your workflows. Table of contents Portfolio management NEW: Tax impact preview when you adjust rebalancing and drift settings The 2026 T3/Inside Information Software Survey Position-level trading Advisor experience Enhanced client management Retirement Improved plan reporting The state of retirement readiness in 2025 Top content Generational approaches to modern advisory services Scaling tax efficiency for every household in 2026 See the tax impact before you act Evaluate the tax impact of portfolio changes before rebalancing—now integrated into more actions than ever. In addition to showing up after a triggered rebalance, the rebalancing preview gives you a clear view of how adjusting rebalancing or drift thresholds may affect clients’ realized gains or losses, so you can act with confidence. The preview screen lets you view: Estimated short- and long-term gains Wash-sale warnings Projected trades Shape the future of advisor technology The annual T3/Inside Information Software Survey is live, and Betterment Advisor Solutions has been included in the trading, rebalancing, and tax-loss harvesting software category. This year, we’ve made tax efficiency even simpler for you and your clients—and we’d love to hear your thoughts. Share your thoughts Coming soon: Trade exact positions with ease Quickly buy or sell specific stocks, ETFs, or mutual funds right from the platform to maintain alignment with each client’s long-term strategy. Trade positions to streamline transitions, offload legacy holdings, and move clients into investments that better fit your model. It’s a fast, efficient way to keep portfolios consistent, clean, and easy to manage at scale. To come in 2026: Direct Indexing and UMAs, along with additional capabilities. We heard your feedback, and have refreshed the advisor dashboard to make client management faster, clearer, and more aligned with how you work. Take a look: Enhanced Household page: Get a consolidated view of all accounts and household performance. No more toggling or scrolling—just faster visibility across every relationship. NEW: Account Overview page: Access deeper insight with a single click. You can now view a detailed breakdown of holdings, allocation, drift, and other portfolio insights directly from your dashboard. Together, these updates make it easier to manage portfolios at the household level, helping you move quickly from insight to client action. Explore your dashboard Deliver more meaningful plan insights with improved reporting Spend less time interpreting reports and more time advising. With improved navigation, expanded data fields, and faster access to trade information, it’s easier to provide the clarity sponsors expect. These improvements can help you keep every plan stakeholder aligned, reduce back-and-forth, and provide reports that are simpler to interpret at a glance. Discover all available reports The state of retirement readiness in 2025 This year’s Retirement Readiness Report uncovers a striking contrast: Employees feel more financially stressed, yet more “retirement ready” than before—a disconnect that shapes how they show up at work. The report highlights 11 key insights about how workers save, spend, and engage with benefits. Advisors can use these findings to help plan sponsors strengthen both long-term retirement readiness and short-term financial wellness. Read the report Generational approaches to modern advisory services Our latest Advisor Survey highlights how RIAs are adapting to a rapidly changing landscape. Gen Z, Millennial, Gen X, and Baby Boomer clients all bring different expectations around communication, technology, and financial guidance. You’ll find insights on shifting workflows and the rise of tech-forward advisory models, as firms blend automation, AI, and personalized service to meet clients where they are. Check out the survey Your 2026 tax game plan: From optimization to scale In our upcoming webinar, Betterment thought leaders discuss how leading firms are systematizing tax efficiency at scale. Get practical ways to extend after-tax value across every household using Betterment’s automated portfolio management tools. Register today Log in to explore what’s new, or reach out to your relationship manager if you’d like to take a closer look at any of these features. If you’d like to take a look around with someone from our team, book a demo.

The solo 401(k): An overlooked tool for your high-income clients Nov 10, 2025 1:49:08 PM Solo 401(k)s can create new planning opportunities for advisors. Key takeaways: Solo 401(k)s aren’t just for freelancers—many of your high-income clients may qualify. Your clients can save up to $70,000 (or more with catch-ups). Help your clients combine pre-tax and Roth strategies for flexible tax planning. Identifying side income helps deepen client relationships and provide holistic financial planning. Betterment makes Solo 401(k)s simple with 100% digital setup and funding. When you think of a solo 401(k), you might picture a full-time freelancer or sole proprietor. But the reality is much broader… If your high-income clients with full-time jobs (doctors, attorneys, executives, etc) also have self-employment income, a solo 401(k) can offer powerful financial planning opportunities. For financial advisors, this opens the door to serve a wider range of clients using solo 401(k)s—from a corporate VP who consults on the side, to a physician with hourly contract income, to a creative executive with a side LLC for freelance work. Solo 401(k) value for clients: High contribution limits and tax flexibility A solo 401(k) allows both employee and employer contributions, resulting in higher total limits than traditional IRAs or even many workplace 401(k)s. For 2025, contribution limits for eligible participants are: Employee contribution: Up to $23,500, and if your client is over 50, they can make "catch-up" contributions of up to $7,500 for ages 50-59 and over age 64, and “super-catch-up” contributions of up to $11,250 for ages 60-63. Employer contribution: As the business owner, your client can contribute up to 25% of their net self-employment income (20% for sole proprietors and partnerships). Advisors can guide clients in using a solo 401(k) along with other retirement plans to: Lower taxable income for the current year using a traditional solo 401(k) Build long-term tax diversification through a Roth solo 401(k) Or combine both approaches based on each year’s tax outlook This flexibility makes the solo 401(k) particularly appealing for high earners who’ve already maxed out other retirement vehicles. Solo 401(k) value for advisors: Deeper relationships with high-income clients As a financial advisor, identifying clients with self-employment or side-business income can create deeper, long-term client-advisor relationships. And offering a solo-401(k) is a natural opportunity to ask if a client has side income. By introducing a solo 401(k) , advisors can: Show clients that you offer proactive planning solutions Differentiate your practice by uncovering overlooked retirement opportunities Demonstrate your ability to coordinate tax and investment strategies If a client is interested, you are in a position to guide them through determining eligibility, selecting contribution levels, and coordinating with tax professionals to help them get the most from their solo 401(k). What about enrollment? Betterment has you covered Setting up a solo 401(k) requires some administrative steps—such as adopting a plan document, establishing a trust account, and filing Form 5500-EZ once plan assets exceed $250,000. However, these requirements are straightforward with the right support. Betterment’s advisor platform helps streamline solo 401(k) account setup and administration, providing you an all-digital solo 401(k) designed to help you deliver exceptional value to your self-employed clients. Digital account opening: Skip the hassle with fully digital account creation, including e-signature on plan adoption agreements. Your clients can set up or convert an existing plan quickly, with zero fees for plan establishment. Digital contributions: Fund in-platform—no more mailing in checks. We accommodate ACH and internal transfers for employee and employer contributions, and contributions are automatically tracked to simplify tax season. Plus, new accounts can enjoy up to a $1,500 tax credit over three years with auto-enrollment. Roth and traditional tax strategies: Offer both Roth and traditional contribution options, giving your clients the flexibility to choose tax-free growth or immediate tax savings—whichever approach is best for their retirement. See how to offer Betterment’s solo 401(k) to your clients today.

AI, high valuations, and market risks: What investors should know Oct 6, 2025 9:30:00 AM AI opportunity: Market insights for the third quarter of 2025. Key takeaways U.S. stocks are expensive but not at dotcom levels. AI spending is boosting valuations, though expectations are tamer. An AI slowdown could weigh on markets, making diversification key. Shifting some stock exposure to bonds can reduce risk. *Valuations don’t predict near-term moves—stay balanced. Despite signs of a slowing US economy, client portfolios have rallied, thanks to a historic bull market. Yet a sense of unease permeates much of investors’ discourse. Inevitable comparisons to past bull runs that ended in crashes are top of mind, leaving investors to ponder the age-old question: Will this time be different?” And specifically: Is the hype around AI just another speculative market bubble? The Shiller Cyclically Adjusted Price-to-Earnings (CAPE) ratio serves as a popular gauge of frothiness in the valuations of stocks. Developed by Yale economist Robert Shiller, the indicator divides the S&P 500’s price by its companies’ inflation-adjusted earnings averaged over the past 10 years, showing how cheap or expensive the market looks while smoothing out short-term fluctuations. U.S. large-cap stocks are about as expensive as they were at peak pandemic recovery levels in 2021, though still below dotcom heights. Bullishness, largely on the back of the AI investment boom, has pushed valuations into expensive territory, so investors should temper their expected returns. However, it doesn’t necessarily mean that the market will not rally further, or that a selloff is imminent. Goldman Sachs Global Investment Research notes that long-term earnings growth expectations, implied by market pricing, are still below 2021 and dotcom-era levels, which might indicate that investor expectations have not over-extended themselves as much as before. Goldman also highlights an important difference: The average P/E ratio of the 10 largest tech, media, and telecom stocks today is 31x—compared with 41x, at the height of the dotcom bubble, in December 1999. Still, a slowdown in AI investment seems inevitable, likely placing downward pressure on stock prices. This risk underscores the importance of portfolio diversification, both across asset classes and geographies. As we often note, stock valuations outside the U.S. look less elevated, even after year-to-date rallies in international developed and emerging markets that have outpaced the U.S. The market is also contending with fresh tariff announcements, along with the lingering effects of those imposed earlier in the summer. Higher import costs have added pressure to goods prices, but inflation has remained low enough for the Federal Reserve to cut rates in September in a bid to support the labor market. More accommodative monetary policy should support economic growth and portfolio performance, though it carries risks of higher inflation and financial instability. These developments ultimately outweigh the significance of yet another short government shutdown in the eyes of the market. For investors with shorter time horizons and lower risk tolerances, shifting slightly from stocks to bonds can align a portfolio with a waning risk appetite. Lower volatility in inflation and interest rates can now potentially support risk-adjusted returns in fixed income as well. However, we are loath to suggest ever completely giving up on stocks. Price-to-earnings ratios have climbed, but these metrics have a poor track record of predicting near-term market moves, and investors should balance their portfolios for both downside and upside risks. AI is a powerful force reshaping markets, but it shouldn’t dominate portfolio decisions on its own. The task is to keep portfolios anchored to long-term goals, weighing transformative innovations like AI alongside broader risks and opportunities—not reacting to headlines.

What’s new from Betterment Advisor Solutions Oct 2, 2025 4:11:04 PM Discover the latest products and features launched in Q3 2025, designed to give advisors more control, flexibility, and transparency. Table of Contents Rebalancing Billing Integrations Advisor experience Retirement Explore our newest updates, featuring enhanced portfolio management, smarter billing, and a smoother experience. This upgrade is designed to help you gain more control and transparency for delivering efficient, tax-smart outcomes to your clients. Preview the tax impact before you rebalance No surprises. No blind spots. Just a clear view into the expected tax impact–down to the position level and how it factors into each client’s capital gains allowance. Now you can see what happens when you trigger an immediate portfolio rebalance. And soon, you’ll be able to preview the tax impact when you: Turn on/off rebalancing or change the drift threshold Initiate a portfolio migration The preview screen also provides insights into wash sale warnings, short- and long-term gains and losses, post-trade weights, and more. We're making it easier to evaluate tax implications and make more informed decisions aligned with your clients’ goals. Take an interactive tour Streamline fees with cash-first billing Now when you choose cash-first billing, you can opt into a strategic fee structure that draws funds from Cash Reserve, then taxable investing accounts, and lastly, retirement accounts to better preserve tax-advantaged dollars. With cash-first billing, you can: Improve cash flow management: Avoid liquidating investments to cover advisory fees, reducing potential tax implications. Create a seamless client experience: Ensure fee payments are handled smoothly from Cash Reserve balances, so clients can stay fully invested without interruption. Tailor your approach: Choose a fee structure that suits your needs, and lets you provide a more personalized approach to portfolio management. Cash Reserve offered by Betterment LLC and requires a Betterment Securities brokerage account. Betterment is not a bank. FDIC insurance provided by Program Banks, subject to certain conditions. Learn more. Adjust fees with flexible sharing Now you can fully cover (or share) Betterment fees out of the overall fee you charge clients, giving you greater flexibility in how platform costs are managed. This option lets you absorb, share, or pass along fees based on your business model, creating a more transparent experience that aligns with your practice. Learn more Streamline reporting with the Capitect integration Now you can view Betterment accounts alongside other custodians in Capitect, a robust reporting and billing platform. Our latest integration lets you access client data and run performance reports—all in one place—so you can manage more with less effort. Learn more Access robust transaction reporting faster With our refreshed Client Activity Page, you can see recent transactions, trade-level details, and allocation changes all in one place. With easier access to client data, you can respond to clients quicker, with clearer information. Gain more flexibility in account setup You now have greater control over how you plan and organize client accounts. Instead of being required to assign a goal, you can set up accounts with or without them—giving you the flexibility to structure accounts that align with your workflow. Make solo 401(k)s simpler and more rewarding Your self-employed clients may now be eligible for up to $1,500 in tax credits—$500 per year for three years—when they open a solo 401(k) with auto-enrollment. As part of our fully digital solo 401(k) solution, auto-enrollment helps further maximize client savings by streamlining contribution setup and eliminating manual steps. Accounts default to a 3% contribution rate to ensure eligibility, with the flexibility to adjust and integrate seamlessly with our tax-smart tools to maximize efficiency. You and your clients can also choose the funding approach that works best for you, lowering barriers to entry so clients can start saving sooner and stay on track. And with upcoming Roth enhancements, including mega backdoor Roth conversions, your clients will have even more ways to boost retirement savings. Learn more Unlock greater plan onboarding oversight Plan advisors can now view detailed onboarding progress with estimated launch dates and key details for every plan: Onboarding tasks: Review what’s in progress, not ready, or complete, so you always know where each plan stands. Launch milestones: Stay on top of key dates like document signing, employee setup, and payroll approval to ensure a smooth plan launch. Plan details: Quickly access plan type, payroll provider, and your Betterment onboarding contact to manage every plan with confidence. If you missed the last update, see all the new features in Q2 of 2025. And, if you’re ready to talk to someone on our team, book a demo today.