Advisor Resources

"What Do You Do?": Compelling Value Propositions for Financial Advisors Aug 4, 2022 1:04:31 PM As your advisory practice grows, you will find yourself having more and more conversations about what it is you do. These conversations are key to growing your network, your client base, and ultimately your business, so it’s important that you can describe your practice clearly, confidently, and concisely. If you can articulate the value you bring to the table, and if you can do so in a way that differentiates you from your competition, these conversations become much easier. Plus, it makes your marketing efforts more effective, from designing your business cards to writing your website copy. In this guide, we will look at examples of how to articulate your value proposition as a financial advisor (answering the question, “What do you do?”), as well as how to form your unique selling proposition (answering the question, “Why should I work with you, specifically?”). Value propositions for financial advisors A value proposition is a simple statement of what you provide to your clients. Most companies have a generic value proposition built into their business category. For example: Grocery stores provide value to consumers by giving them a single place to buy different types of packaged goods in consumer quantities. (Otherwise, people would have to create relationships with dairies, produce providers, and large CPG brands themselves.) Dentists provide value to patients by cleaning and inspecting mouths in ways that consumers wouldn’t otherwise have the means, equipment, and expertise to do. Law offices provide value to clients by renting out their knowledge of law and policy, saving clients the time and effort of learning to practice law (and avoiding the costs of accidentally handling things illegally). Likewise, in the financial advice space, the value you provide to your clients comes from several generic sources. These sources fall into two major buckets: financial value and extra-financial value. Financial value vs. extra-financial value Financial value is the most straightforward benefit you provide. It simply refers to the ROI that your clients realize through working with you. This includes generating returns, avoiding losses, managing and optimizing deposit limits, etc. Extra-financial value is more expansive. This refers to all the “extra” benefits that someone enjoys besides the ROI—it’s what some financial advisors have begun to refer to as ROL, or “return on life.” This includes value sources such as: Planning: objectively envisioning what your clients can accomplish. Your clients can be inspired to change their investing, spending, and saving habits simply because you helped them set a vision and make a plan to realize it. This can create feelings of confidence and security that could be difficult to come by otherwise. Organization: helping your clients know if they’re on track. By organizing your clients’ financial lives, you give them the assurance that at any point in time, they can quickly check in to see if they’re on track to meet their goals. You also make it much easier for them to access information they need for tax reporting, estate planning, and other wealth management activities. Accountability: keeping your clients on track. Just like a personal trainer holds their clients accountable for reaching their fitness goals, you’re the voice that reminds and encourages your clients to work toward their financial goals. Expertise: educating and counseling your clients. You’re the financial expert, so your clients don’t need to stay abreast of the stock market, monetary policy, fiscal policy, inflation, and the like if they don’t want to. Instead, you keep them informed on what they need to know, and you’re available to educate them on what they want to know. Almost every financial advisory practice will provide value through a blend of what we’ve listed above. However, that blend will vary from advisor to advisor. Some advisors will be stronger at building tailored plans, while others will focus more on client education. So while all advisors more or less provide value from the same sources, individual value propositions will vary from practice to practice. How to write your value proposition Writing a value proposition should be a simple process. The statement doesn’t need to be fancy, and it can be as long or brief as you want. But some criteria separate a useful value proposition from a useless one: It should be easy for your audience to understand. Unless your target market is the extremely financially literate, you should avoid technical in-speak. It should be easy for you to remember. Although you can use your value proposition for multiple marketing purposes (more on that later), your value proposition will help you most if it can simply answer the question, “What do you do?” As an RIA, you don’t want to come up with a new answer to that question every time someone asks it. Your value proposition should be your immediate, go-to response. It should sound natural. Don’t treat your value proposition like a composition assignment. Use words that you would use in a regular conversation. Instead of “I optimize and organize my clients’ portfolios so as to maximize return on investment and realize their financial goals,” you might try, “I help people set financial goals, get their finances in order, and keep them on track for reaching their goals.” It should be verifiable. If someone asks you if you have examples or if they ask how your offerings work, you should be able to naturally bring up real-life scenarios that explain or illustrate the value you provide. Example value propositions for financial advisors Your value proposition needs to communicate the benefit you provide to your clients and how you provide that value. Here are some example value propositions: “I help people get their financial lives in order: I manage their investments so that their money is working toward their long-term goals without them needing to worry about it.” “I’m like a counselor, but I focus on people’s finances. I keep my clients educated on how the market works and help them make objective decisions with their money.” “I keep people on track with their financial goals: my clients and I work together to set expectations and milestones, and I help them keep their eye on the long-term.” Ways to use your value proposition As we’ve discussed, your value proposition can be helpful primarily when describing what you do in conversations—especially in the early years of your practice. However, your value proposition will come in handy when: Creating marketing collateral. Your business cards, your letterhead, your email signature, bios and descriptions for community events and sponsorships, your Google My Business description—all the little bits of text you may need to write to describe your business become easier to create when you’ve already articulated what you do. Crafting your social profiles. Your LinkedIn profile, Facebook page, Instagram account—all the places where you describe yourself can benefit from already having articulated your value proposition. Onboarding clients. When you bring a new client in for that first meeting, your value proposition can function as an outline for the ground you need to cover. This will help you set expectations for your client and make sure they are aware of all the services you provide. Organizing your website. If you have articulated what you do, then deciding what pages and content you need on your website becomes much easier. A comprehensive value proposition can be a good starting point for mapping out the content and navigation for your website. Onboarding employees. If you’re ready to hire new talent, your value proposition can be a vital tool for giving new employees an idea of your firm’s goals and what they will be helping your clients accomplish. (Plus, it will help them answer the question, “What do you do?” when it comes up—amplifying your word-of-mouth marketing efforts.) Articulating a unique selling proposition. You’re not the only financial advisor in your market, and knowing what you do is the starting point for explaining why someone should choose to hire you instead of the competition. This last part is important, because a value proposition is just a start when it comes to communicating your value as a financial advisor. Once you have your value proposition articulated, you will want to move on to writing your unique selling proposition. Unique selling propositions for financial advisors While a value proposition describes how your practice creates value, the unique selling proposition makes the case for why you’re the right advisor for your target market. Value propositions are descriptive; unique selling propositions are persuasive. The unique selling proposition (which marketers usually shorten to “USP”) is typically a one-or two-sentence statement that should accomplish the following: Resonate with your target market’s emotions. The USP should involve an emotional appeal: you want to tap into how your most satisfied clients feel (or how you want your future clients to feel). Differentiate you from “the rest” of the financial advisors. This doesn’t need to be a unique product offering. But your unique flavor should be evident when people read or hear your USP. If you focus on helping… people in a certain profession (e.g., medical professionals), or people from a certain background (e.g., first- and second-generation immigrants), or people with certain like-minded values or practices (e.g., homeschooling families), or people facing certain challenges (e.g., newly divorced parents) … … then this should be evident in your USP. It could even come down to a different tone or energy that you bring to your client meetings (e.g., you might be the humorous, nerdy, and/or outdoorsy FA in your city). Plainly state how you help your clients. Your USP should highlight the value you bring to your target audience. This is much easier to do after you have developed your general value proposition. How to use your unique selling proposition Developing your USP can be beneficial for fleshing out your marketing strategy. It bridges the gap between what you do and why people choose to work with you. Once your USP is written, you can use it in various ways: Website homepage copy. It can be tough to figure out exactly what to say on the homepage of your website—but if you have already articulated your unique selling proposition, most of the work is done. Your website homepage is the perfect place for your USP to live: it immediately tells your website visitors who you serve, what they can expect, and why they should choose you. Networking with competitors. Unless you are the only financial advisor in your community, you will likely find yourself at networking events with other advisors. If you know what separates you from the rest of the pack, then networking becomes a bit easier. Not only can you naturally differentiate yourself from the other advisors, but you can also differentiate yourself to the other advisors. It’s easier to converse with and learn from other people in your field if they know you’re not chasing their target audience. Advertising copy. Should you start spending money on ads, your USP will help you target your spending on the right audience. It can also increase your return on ad spend, as you won’t be advertising generic services—you’ll be promoting something uniquely appealing. Grow your advisory business with Betterment Your value proposition and USP are two key tools you can use to grow your business. By articulating what you do and why people should choose you, you give yourself an advantage in both your everyday conversations and your marketing efforts. But this degree of intentionality can take time. And processing the demand that comes with effective communication takes even more time. One way to optimize your time as you grow your advisory practice is to invest in tools that reduce hours spent on investment management and back-office admin. If you’re looking for a better way to grow your business, Betterment Advisor Solutions can help. Our platform helps you deliver personalized model portfolios to your clients and manage your entire practice—which means you can spend more time crafting your message, building relationships, and bringing in new clients.

Client Agreement Automation Apr 28, 2026 9:15:00 AM Everything you need to know about this great feature. Scroll down to learn more and read our legal disclosures. The Betterment Advisor Solutions Client Agreement Automation function will make onboarding your new clients fast, easy, and completely paperless. By permitting your clients to execute your firm’s advisory agreement as part of the white-labeled Betterment Advisor Solutions signup experience, you automate a manual process, giving you more time to focus on your business while providing your clients with a better experience. How to get started You may need to update your Form ADV Part 2A and most likely your Client Agreement to reflect the incorporation of Betterment Advisor Solutions into your practice, including (among other things) how your firm uses Betterment’s sub-advisory and brokerage services, and Betterment’s fees. Since each situation is unique, please consult with your attorney or compliance officer. About the Client Agreement Automation function The Client Agreement Automation function gives you the option to have your clients electronically execute your firm’s advisory agreement as part of the white-labeled onboarding experience. It also will permit you to provide your Form ADV Part 2A, Form CRS, and privacy policy to your clients at the time of onboarding. Additionally, each advisor on the platform may supply their Form ADV Part 2B if they choose to do so. This will be presented to their clients at the time of onboarding alongside the other documents that may be supplied at the firm level. Provision of the Form ADV Part 2B is optional, and can be implemented even if your firm does not supply any of the other agreements or disclosures. Use of the Client Agreement Automation function is optional. If you choose not to use the function or to provide only a subset of your firm documents, you will need to separately execute your agreements between your firm and your clients and deliver firm disclosures in a manner determined by you outside of the Betterment Advisor Solutions platform. The Client Agreement Automation function is only intended to assist firms in presenting agreements and disclosures associated with account openings. Subsequent updates to these documents are not re-delivered to existing clients; the firm must make their own arrangements to deliver any such updates. Note that firm admins may upload a revised Form CRS outside of the account opening process, which will prompt a confirmation modal for client acknowledgment; however, no such capability exists for other agreement types. For all other document updates, the firm retains sole responsibility for arranging delivery to existing clients through appropriate means outside of this function. Contact us with questions at support@bettermentadvisorsolutions.com. How Client Agreement Automation works Overview: The Client Agreement Automation allows your firm to provide a form advisor agreement, Form ADV Part 2A, Form ADV Part 2B, Form CRS and privacy policy to Betterment, which Betterment will then host. As part of the Betterment Advisor Solutions client signup, Betterment will electronically deliver these documents to your clients. For your firm’s Client Agreement, you have the option to enable DocuSign to collect a visible electronic signature from your client—including their name and date — which will also appear on the downloaded PDF. Your Form ADV Part 2A, Form ADV Part 2B, Form CRS, and privacy policy will use checkbox consent, which permits your clients to click a checkbox indicating their consent. DocuSign is only supported for Client Agreements. You have the option of providing only a subset of the documents listed above, though you must provide an advisory agreement to use this function. Only those documents which you upload to your firm dashboard will be provided to clients. Signup: As part of the Betterment Advisor Solutions electronic signup process, your clients are presented with agreements between them and Betterment, and acknowledge receipt of Betterment’s disclosure documents. If you elect to use the Client Agreement Automation function, your clients are also presented with your firm’s advisory agreement and any disclosure documents you have uploaded as of the date each client signs up. If you have enabled DocuSign, your client will electronically sign and date your Client Agreement, which will be visible on the downloaded PDF. If DocuSign is not enabled, your client will need to consent to the terms of your Client Agreement electronically, by checking a box and clicking a button to agree to create their account. Please note, Betterment does not collect traditional handwritten signatures for your agreement or the Betterment Advisor Solutions agreements. Instead, consent is indicated electronically, and the date and time of such consent is recorded and stored. For all other firm documents—Form ADV, Form CRS, and privacy policy—clients indicate consent via checkbox. This flow applies during the initial client onboarding and when a client opens a new legal account, provided they have not already signed the most recent version of your firm’s agreement. Records: In the advisor dashboard, under the “Agreements” tab, you can access the "Client packages" window to view which clients executed your firm’s agreement electronically, the date and time at which they did so, and a digital copy of the version they executed (along with the versions of the firm’s Form ADV Part 2A, Form CRS and privacy policy, and the advisor’s Form ADV Part 2B, provided these documents were uploaded at the time the client was onboarded). You can also download all client packages in bulk. Each agreement package includes your firm’s Client Agreement—with a visible DocuSign signature if you have DocuSign enabled—along with any firm disclosure documents you have uploaded, such as your Form ADV, Form CRS, and privacy policy, which reflect checkbox consent. Note that Betterment’s own agreements are not included in these packages. The most up-to-date version of Betterment’s Client Agreement is available here and other disclosures are here. Important considerations for your firm Please review these items carefully before deciding whether or not to use the Client Agreement Automation function. The Client Agreement Automation function supports one of each disclosure document type per firm at a time—one Form ADV Part 2A, one Form CRS, and one privacy policy. You may update these at any time by having a firm admin upload a new copy via the Agreements section of the portal. Once updated, the new version will be presented to all new clients going forward, but will not be redistributed to existing clients. If you choose to enable DocuSign for your Client Agreement, it will apply to all clients you bring onto Betterment going forward. Your Form ADV, Form CRS, and privacy policy will continue to use checkbox consent and are not affected by DocuSign enablement. Form ADV Part 2B: Each individual advisor on the platform may upload their own ADV Part 2B if they choose or if their firm directs them to do so. If a Form ADV Part 2B is present when a client signs up, a record of the acknowledgement of receipt of the Form ADV Part 2B and a copy thereof will be presented on the Agreements page as well as in the Compliance view, alongside firm-level agreements (if supplied). Form CRS: When present, the Firm’s Form CRS will be shown as the first disclosure alongside the other documents and disclosures during client onboarding that are a part of the Client Agreement Automation function. In addition to client onboarding, the Firm’s Form CRS is presented to clients when adding additional services, including when the client opens a new type of account, on the client consent form when the advisor initiates the opening of a new type of account, when a rollover is initiated by a client, on the client consent form when the advisor initiates a rollover, on quarterly statement notifications, and when a user logs in for the first time since the Firm has uploaded or updated their Form CRS. Examples of opening a new type of account include when a client with a taxable investing account opens an individual retirement account or when a client with an individual retirement account opens a joint account. Fee changes: When considering whether to use the Client Agreement Automation function, you should take into account that advisors have the ability to change the fees they charge specific clients in the advisor dashboard (subject to available Billing Plans, which can only be created by firm admins.) Before using the function, you should determine how, if at all, this impacts the structure of your agreements. Always on: If you decide to use the Client Agreement Automation function, it will be turned on for all clients you bring to Betterment Advisor Solutions. Please note, however, that DocuSign is not available for clients transitioning to your firm from Betterment's retail or 401(k) platforms. Clients moving from these platforms will instead execute your firm's advisory agreement via checkbox consent through the Client Agreement Automation function. Multiple signatories: Currently, the Client Agreement Automation function does not support accounts with multiple signatories, such as trusts with multiple trustees and joint accounts. With joint accounts, each individual account holder will sign their own separate agreements. Agreement amendments: While agreements can be updated and will go live for future client onboarding, we do not support amendments to your agreements with existing clients on our system. If you would like to amend your agreement with some of your clients, you will need to do so yourself, using whatever non-Betterment mechanism and recordkeeping system you deem appropriate. Form ADV Part 2A, Form CRS, and privacy disclosure updates: While Form ADV Part 2A and privacy disclosures can be updated and will go live for subsequent client onboarding, we will not send any updates to your Form ADV Part 2A or privacy disclosures to your existing clients. You are responsible for complying with SEC rules governing when and how to deliver any required disclosures and amendments to these documents to your clients.

How portfolio rebalancing works to manage risk for your clients Dec 20, 2024 12:00:00 AM Portfolio rebalancing, when done effectively, can help manage risk and keep your clients on track to pursue the expected returns desired to meet their goals. What is rebalancing? Rebalancing is a Betterment feature that seeks to reduce drift in your client portfolios. Betterment performs two types of rebalancing on your clients’ behalf. First, in response to cash flows such as deposits, withdrawals, and dividend reinvestments, Betterment buys underweight holdings and sells overweight holdings. Second, if cash flows are not sufficient to keep a client’s portfolio within its applicable drift tolerance, automated rebalancing sells overweight holdings in order to buy underweight ones, aligning the portfolio more closely with its target allocation. Measuring portfolio drift Over time, the value of various holdings within a diversified portfolio moves up and down, drifting away from the target weights that help achieve proper diversification. Over the long term, stocks generally rise faster than bonds, so the stock portion of your client's portfolio will likely go up relative to the bond portion—except when you rebalance the client’s portfolio to target the original allocation. Clients may also transfer in assets from outside Betterment that are not part of the target portfolio strategy and/or allocation. The difference between the target allocation for your client's portfolio and the actual weights in your client's current portfolio (e.g. their actual allocation) is called portfolio drift. Betterment and partner portfolios For Betterment constructed portfolios (excluding Betterment’s Crypto ETF portfolio*), we broadly define portfolio drift as the total deviation of each “super” asset class (put in positive terms) from its target allocation weight, divided by two. These six super asset classes are US Bonds, International Bonds, Emerging Markets Bonds, US Stocks, International Stocks, and Emerging Markets Stocks. Here’s a simplified example, with only four assets: Target Current Deviation (±) U.S. Bonds 25% 30% 5% International Bonds 25% 20% 5% U.S. Stocks 25% 30% 5% International Stocks 25% 20% 5% Total 20% Total ÷ 2 10% A high drift may expose your client to more (or less) risk than you intended when you set the target allocation. Drift for advisor-built custom model portfolios Your firm may elect to construct a custom Model Portfolio on our platform. If so, drift for these portfolios is evaluated on the security group level, rather than at the super asset class level as described above for Betterment constructed portfolios. Betterment will calculate drift at the security group level for custom model portfolios even if the security group(s) used are pre-populated options provided by Betterment in the interface. Advisors can also set customized drift tolerance thresholds for their client’s portfolio. For reference, security groups are groupings of ETFs that include a primary ticker, and may include secondary and/or IRA secondary tickers designed to help reduce wash sales and allow for tax-loss harvesting opportunities. This means that for custom model portfolios, drift is calculated as the total deviation of each security group (put in positive terms) from its target allocation weight, divided by two. *Please note: As of the date of the publication of this article, Betterment’s default drift tolerance threshold is generally 3% for stock and bond ETF portfolios, as well as portfolios containing mutual funds, and 7% for Crypto ETF portfolios. For custom model portfolios, advisors can set a custom drift tolerance threshold. Betterment may change the default drift thresholds without notice. Rebalancing Betterment automatically takes actions to reduce drift for your client through reactive-flow rebalancing and proactive rebalancing, depending on the circumstances, and with an eye on tax efficiency. If you choose to take advantage of Betterment’s tax-smart transition features, we will aim to respect the customized drift tolerance and gains allowance that you’ve set when rebalancing your clients’ goals. A gains allowance can reduce eligible opportunities to reduce drift through rebalancing, because Betterment will not initiate rebalancing transactions (or will only initiate partial rebalancing transactions) in a client goal with gains in overweight securities above the gains allowance. Learn more. Reactive rebalancing This method involves buying or selling when cash flows into or out of the portfolio happen. Cash flows (such as deposits, dividend reinvestments or withdrawals) can be used to rebalance your client's portfolio. Fractional shares allow us to allocate these cash flows with precision. Inflows: When a client makes a deposit or receives a dividend, we use the inflow to buy holdings that are currently underweight, reducing their drift. The result is that the need to sell in order to rebalance is reduced. Whenever client drift is higher than normal, we calculate the deposit required to reduce the client's drift to zero, and make it easy for them to make the deposit. Although we show the deposit amount needed to bring drift back to 0%, smaller deposits also help reduce drift. Outflows: Withdrawals (and other outflows) are also used to rebalance, by prioritizing selling holdings that are overweight. Proactive rebalancing When cash flows are not sufficient to keep your client's portfolio’s drift within its applicable drift tolerance (such parameters as disclosed in Betterment’s Form ADV), Betterment seeks to rebalance client portfolios by selling and buying assets, aligning the portfolio more closely with its target allocation. Rebalancing requires a minimum portfolio balance (advisors can review the estimated balance at www.betterment.com/legal/portfolio-minimum). The rebalancing algorithm is also calibrated to avoid frequent small rebalance transactions and to seek tax efficient outcomes, such as reducing wash sales and minimizing short-term capital gains. As with any sell trade, our tax minimization algorithm seeks to select the lowest tax impact lots for rebalancing transactions. Since short-term capital gains are taxed at a higher rate than long-term capital gains, we can achieve higher after-tax outcomes by simply waiting for those lots to become long-term before rebalancing, if it's still necessary at that point. As a result, it’s possible for your client's portfolio to experience higher levels of drift without rebalancing if we have no long-term lots to sell. Generally this is because the account is less than a year old, or a substantial portion of the account’s holdings have been purchased within a year. A client account with a gains allowance can also experience higher drift, since rebalancing will not recognize any gains above the gains allowance. And large positions transferred in via ACATs with embedded gains can also lead to higher drift and delay proactive rebalancing. If you’d like to turn off automated proactive rebalancing in a client’s account (so that Betterment only rebalances client’s accounts in response to cash flows), you can do so in the clients tab of your advisor dashboard. Betterment has discretion to limit or postpone rebalancing in order to prioritize other trading activity on any given day, including days where extreme market conditions produce a higher volume of trading. To learn more about rebalancing, see our rebalancing disclosures. Allocation-change rebalancing Changing your client's target allocation by moving the allocation slider and confirming the change could also cause a rebalance. When you update a client's portfolio strategy and/or asset allocation, Betterment will give you the option to select one of our three tax-aware migration strategies. Depending on which option you select, this could result in selling securities and could possibly realize capital gains. As with all sell trades, we will utilize our tax minimization algorithm to help reduce the tax impact. Additionally, before confirming the allocation change, you can review the potential tax impact of the change with Tax Impact Preview. *The Betterment Crypto ETF portfolio is composed of two ETFs that are market weighted in the portfolio, and as such, do not have geographic and stock to bond super asset classifications. See disclosures for more information. Transaction Timelines

Tax-aware migration strategies Aug 5, 2025 10:30:00 AM Advisors have three options when migrating a client to a different portfolio or changing their allocation -- each with its own tax-optimization strategy. A tax-aware approach that may reduce short-term gains and limit wash sales When this strategy is selected, the client’s goal will be migrated in a tax-optimized way. For taxable accounts, we’ll seek to sell tax lots that are at a loss or have experienced long-term capital gains, but will continue to hold, when possible, tax lots with short-term gains until they either become long-term gains or become losses. For tax-advantaged accounts, we will migrate without regard to embedded capital gains. Regardless of account type, we will prioritize reducing wash sales that could lead to permanently disallowed losses for securities held at Betterment. For this strategy, it is important to remember that the account may have high drift in the short run, but if rebalancing is on Betterment’s algorithms will typically rebalance available losses or long-term gains as they arise (subject to any customized drift settings or gains allowance on your client’s account), as long as the security sales involved will not cause any disallowed losses. Set Target Only Selecting this migration strategy will disable automated rebalancing in client taxable and tax coordinated goals assigned to the portfolio. While rebalancing is off, the client’s goal will be transitioned to the new target portfolio by buying underweight securities with cash deposits and dividend reinvestments, while selling overweight securities to fund withdrawals. This election will often result in high drift, especially if the portfolio or allocation change involves a significant change in composition of the portfolio’s holdings. You can re-enable automated rebalancing from your client’s household page or by contacting us at support@bettermentadvisorsolutions.com. If you wish to further manage tax impact, you can also set a gains allowance for your client’s goal prior to re-enabling rebalancing. To learn more about how a gains allowance operates in client accounts, please review our smart transitions disclosure. Rebalance with no tax-impact constraints For this migration strategy, the client’s goal will be rebalanced as soon as possible to the target portfolio. Betterment will perform this rebalance in a tax-optimized way to the extent possible, but we will not delay selling shares even if doing so could lead to a more optimal tax outcome. Choosing this option could lead to the realization of wash sales for securities that have been recently sold. After trading is complete on the change, the account will typically be 100% in balance with the target portfolio. For each of these migration strategy options, Betterment’s Tax-Impact Preview feature is available in the individual client goal migration flow so that the advisor may see an estimation of the effects of the selection. Note that Tax-Impact Preview is not available for bulk portfolio updates.

Betterment Advisor Solutions Case Study Q&A: How Ritholtz reaches a new client segment Nov 16, 2022 4:45:36 PM Matt Lohrius oversees the Liftoff platform at Ritholtz Wealth Management, which began leveraging Betterment’s platform more recently. Ritholtz is located in New York City and manages more than $2.7 billion in assets. Dan: Tell us about how the sort of robo-advisor aspect of things works within Ritholtz Liftoff. How do you guys organize it and think about it? Matt: As you probably know, our core business was focused on high net worth households, people that were staring down retirement or leading up to it. And we put out a lot of content—whether it's blogs or The Compound (our YouTube channel)—so a lot of people are following us and telling us they’d like to become clients. But many of them didn’t fit our traditional high net worth, pre-retirement customer profile. But clearly there was a demand, and we wanted to help these people. So that's why we created Liftoff, which we’ve continued to improve over the years. But it really blossomed once we started working with automated platforms like Betterment. There’s no minimum, so it’s great for people in their twenties or thirties who are maybe just starting to invest. Dan: Tell us a little bit more about Liftoff’s ideal client profile. Matt: There are a couple of different types. One would be someone who's on the younger side and who is in the accumulation stage base. They may not yet be married or have a family, but they’re starting to make money and they want to save in a smart way. This type of investor also wants access to an advisor for questions that do arise: around what they should be doing differently when they do get married or start having kids. I also love talking to people who have just graduated college, because they’re such enthusiastic followers of ours. We’re happy to accommodate them. Dan: This is obviously a big potential for growth. How do you think about growing Liftoff? Matt: I think we want to grow it as big as we possibly can and take it as far as we can. And that's kind of my mindset: I get on the phone with everyone who wants to chat. Hopefully we do get to the point where we need to bring more of me to oversee twice or three times as many Liftoff clients as we have right now. Dan: What have been the biggest hurdles to growth so far? Matt: One hurdle is that there's always going to be people out there that would rather just do it themselves and that's fine. We totally understand that. But there are still plenty of other people out there who don't even know where to start. And so we're looking to reach that group of people. Dan: Do you find that there is a catalyst that brings the self-directed types to you? Matt: Yeah, it could be a year like this one that we're in right now where people who have been investing on their own for a while reach out because of all the uncertainty. They are looking to get a little more advice. Dan: Talk a bit about the culture within Ritholtz to new technologies. Matt: We're all about it. Outside of the Liftoff channel, Ritholtz is looking at technology to onboard clients more quickly and smoothly. We know it’s possible—with Betterment and Liftoff, you can open an account like that. So we want to be able to expand that kind of capability throughout our entire firm. And that really just involves us looking at all the technology we currently have to streamline the client experience. Dan: Can you talk a little bit about the difference that an automated platform like Betterment makes in your day? Matt: For Liftoff, it’s just huge from a technology standpoint: opening accounts, transferring money from other custodians, depositing money, linking a bank account. Everything is so easy and intuitive for the client. And that saves us a lot of time: we’re not having to help a client with the logistics of opening an account and can spend our time with them focusing on advice. That's where platforms like Betterment really excel, with the operational efficiencies. I think a lot of advisors hear “robo-advisor” and sometimes get a little turned off, but who doesn't want operational efficiency? And that’s on both sides of the equation to clients and advisors. Dan: What if you go back, what initially sparked the interest in convincing you to start using a robo-advisor as a partner? Matt: It’s kind of just set it and forget it. It's easy. You have a durable, long-term portfolio. You're going to invest in it just to keep saving. That's the work that you need to do, is constantly save. And outside of that, you don't need to do a whole lot. It's helpful for a lot of people. And when we do have a client ask “Can I do my own thing?"—because there’s often that temptation—we tell them “No, you can't.” That's the whole purpose and benefit of this. You can go somewhere else and do that. But if you want a concrete long-term plan, this is where you're going to get it, and it's very likely to work. Dan: What would you tell advisors who are skeptical about using a robo-advisor? How would you help them to understand how well it's worked for you and your clients? Matt: People who are skeptical need to realize that this is a hybrid platform. Yes, the portfolios and operations are automated, but you have access to an entire firm. Because if you have access to me, you have access to all the resources that I have access to. And that can be powerful. Dan: Last question. Does using an automated platform like Betterment mean that you, as a CFP®, as an advisor, get to spend more time on bigger issue questions like planning? Matt: Yes, one hundred percent. That is the whole reason Liftoff switched to Betterment. With the custodians we had been using previously, there were a lot more operational emergencies that needed our time and attention. But with a platform like Betterment, all of that is taken care of so that we at Liftoff can focus solely on providing quality advice. That's all we want to do here. Automation (through Betterment’s platform) is allowing us to do that now, which is why I'm confident that Liftoff will continue to grow. Ritholtz Wealth Management is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Ritholtz Wealth Management and its representatives are properly licensed or exempt from licensure. This website is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Ritholtz Wealth Management unless a client service agreement is in place.

FAQ: Custom Portfolios for Advisors Sep 3, 2025 11:15:00 AM Build your own custom model portfolios while leveraging all of Betterment’s sophisticated portfolio management features. What are custom model portfolios? The Betterment Advisor Solutions platform allows advisors to customize portfolios ETFs, single stocks, and mutual funds, while maintaining access to Betterment’s suite of automated features including: automated rebalancing tax-loss harvesting asset location / tax coordinated portfolios tax-optimized sales for withdrawals How do I create custom model portfolios for my clients? To get started, log into your dashboard and navigate to Portfolios > Create a portfolio > Custom portfolio. Follow the prompts in the module to create securities groups, determine risk levels for your portfolio, and more. What are the program requirements? There are no asset minimums or additional fees required to build custom portfolios. I have more questions - who can I talk to and where can I learn more? Please fill out this form, and our team will follow up with you. Security Selection: What securities are supported? At this time, we support ETFs, mutual funds, and single stocks. What ETFs are supported? Almost all ETFs are supported, as long as there is sufficient liquidity and trading volume. How many different asset allocations can be included in one portfolio? For each custom portfolio, firms can define anywhere from 1 to 25 asset allocations. Betterment Automated Features: What is Tax Loss Harvesting (TLH)? How does this feature work with custom model portfolios? Tax loss harvesting is the practice of selling a security that has experienced a loss—and then buying a similar asset to replace it. The switch does two things: it allows the investor to realize, or “harvest”, a valuable loss while keeping the portfolio balanced at the desired allocation. Capital losses can lower your clients’ tax bill by offsetting gains and reducing ordinary taxable income up to $3000 per year. The custom model portfolios program allows firms to designate a primary, secondary, and IRA secondary ETF ticker for each asset class to be used for TLH. How does Tax Coordination work? Tax Coordination is designed for investors who are saving for retirement in more than one type of account, including taxable accounts, traditional IRAs, or Roth IRAs generally with the same time horizon. Once you set it up, Betterment will look across all of the accounts grouped under retirement and automatically reorganize which assets are held in which accounts. Of these three types of accounts, each are taxed differently: (1) taxable accounts, (2) traditional IRAs or 401(k)s, and (3) Roth IRAs or 401(k)s. With Tax-Coordination, the assets are then arranged (unequally) across all coordinated accounts to help maximize the after-tax performance of the overall portfolio. We do this in a way that keeps the overall allocation the same while boosting after-tax returns. We've outlined the potential benefits of Tax Coordination and some reasons you may not want to use it here. For more information on our estimates and Tax Coordination generally, see full disclosure here. How does Betterment rebalance client portfolios? How does automated rebalancing work? More information about Betterment's automated rebalancing feature is available here. What capital market assumptions are used for balance and spending power projections? Firms can input their own capital market assumptions, or Betterment's team can provide assumptions.