Betterment Editors

The #1 skill advisors need to help clients navigate the Great Wealth Transfer Jul 9, 2025 1:01:43 PM How your firm can prevent losing business as your clients transfer their wealth. We’ve been hearing about the “Great Wealth Transfer” for years now. There is an estimated $100+ trillion that will pass from baby boomers to Gen X and millennials, but recent data has found that most clients are still not ready for it. The problem? Many families aren’t having essential conversations about how their wealth will be passed down—or who will be responsible for managing it. Here’s how your firm can help. The challenge: Guiding clients through a generational shift Money can be stressful. In Betterment research, we’ve found that 62% of people have moderate to significant anxiety around their finances. Pair together the complexities of financial planning with potentially emotional conversations with loved ones, and many families may feel lost or confused. Recent data shows that many families are underprepared: An RBC Wealth Management–U.S. survey found that only 52% of givers have had conversations about values with their heirs, and just 39% have provided guidelines for what they want to do with their inheritance. Meanwhile, UBS research highlights a gender difference within this gap: 80% of women who inherited wealth from their parents and 83% of widows experienced a “wealth transfer challenge.” UBS found that many widowed women did not have an established wealth transfer plan with their partner, and one in four said they did not know where all their partner’s wealth was before their passing. This lack of preparedness is alarming, but it presents an opportunity for your firm to step up and help your clients, ultimately building long-term relationships. “Advisors can offer a lot of value by helping their clients create an estate plan and navigate conversations with family members. By being a trusted partner in the process, advisors can build stronger relationships not only with current clients but also with the next generation.” – Alison Considine, Director of Betterment Advisor Solutions The opportunity: Become a family’s long-term guide According to the RBC Wealth Management–U.S. survey, the primary driver of feeling unprepared for an inheritance is not tax complexity or investment strategy—it’s a breakdown in or lack of communication. The UBS research found the same issue, with nearly one-third of women who inherited assets from their parents having no prior conversations with them about the wealth transfer. Over the coming years, communication is likely going to be the #1 skill advisors need to help clients manage a wealth transfer. If advisors want to keep financial planning relationships intact across generations, they need to get ahead of and lead these conversations. Here are three guidelines for successful wealth transfer conversations: Educate clients early. Help them understand how to transfer wealth tax-efficiently, preserve family assets, and make sure their wishes are clearly documented. Proactive education builds confidence and prevents costly surprises down the line. Bring the next generation to the table. Sit down with clients and their children or heirs to discuss goals, responsibilities, and expectations to help avoid misunderstandings down the road. Reframe the discussion. Wealth transfer isn’t just a financial transaction—it’s a personal story about family legacy, passions, and future impact. Use open-ended questions to surface values like philanthropy, entrepreneurship, or family tradition—and make those priorities central to the planning process. 10 questions to ask clients and their heirs to help facilitate a smooth wealth transfer Use the following questions as a starting point to begin intergenerational discussions around wealth transfers. As an advisor, you know your clients best, so tailor your conversations to their personal situations. For clients (Wealth givers—often Baby Boomers or Gen X): Have you clearly communicated your intentions for your wealth with your children or heirs? (Start by opening the door to alignment and transparency around values and expectations.) What values or legacy do you hope your wealth will help preserve or promote? (Encourage your client to think beyond dollars and towards impact.) Have you established or updated your estate plan, including wills, trusts, and beneficiary designations? (Identify potential gaps and ensure documents match current intentions.) Would you consider giving a gift to heirs or causes during your lifetime to see the impact of your wealth now? (Spark discussion about strategic giving and potential tax benefits.) Have you talked to your heirs about the responsibilities that come with inheriting wealth? (Emphasize financial literacy and preparedness of the next generation, which can lead to more intergenerational communication.) For heirs (often Gen X or Millennials): Do you understand your parents' or benefactors’ financial values and intentions for passing on their wealth? (Encourage open dialogue and reduce surprises or misunderstandings.) Do you feel prepared to manage or invest inherited assets? If not, what guidance do you need? (Help identify financial education needs or planning opportunities.) Do you have your own estate plan in place to manage future wealth transfers? (Promote proactive planning to help protect assets and preserve family goals.) Do you want to be involved in your own charitable giving or collaborative family philanthropy efforts? (Engages heirs in legacy planning and shared purpose with their parents.) What are your personal financial goals, and how might an inheritance affect those plans? (Show that you are thinking about the heir's personal needs as well.) How Betterment Advisor Solutions can help navigate the Great Wealth Transfer Betterment Advisor Solutions equips advisors with technology and tools that make it easier to communicate and collaborate across generations: Tax-smart technology: Leverage automated tax-loss harvesting, customizable drift-based rebalancing, automated asset location, and more to help clients manage taxes. Streamlined client portal: Offer your clients a white-labeled client portal, where they can easily see their full financial picture, with your branding on their statements and tax forms. Goals-based framework: Create customized goal names to create a personal feel for each client’s cash, investments, or held-away accounts.

The convergence of wealth & retirement: A $40 trillion market for advisors Jul 2, 2025 9:00:00 AM See how integrating wealth management and retirement planning can help your firm tap into a $40 trillion market opportunity. If you’re looking to grow your wealth management firm’s client base, serving retirement plan participants might just be the key to unlocking greater growth potential. The opportunity by the numbers: According to the most recent Betterment Retirement Readiness Report, 79% of employees say their employer offers a 401(k) plan. Valued at $40 trillion, retirement assets are 32% of all U.S. household financial assets, according to the ICI. The National Association of Plan Advisors reported that 74% of 401(k) participants would welcome professional help managing their accounts. The opportunity is clear for growth-minded advisors: A multi-trillion-dollar market of consumers is actively seeking professional financial guidance. In this article, we explore this growth opportunity along with how to overcome the challenges that come with it. Key benefits for advisors: Integrating wealth management and retirement planning The convergence of wealth management and retirement planning offers two benefits. Benefit 1: Use retirement planning as a growth engine for your firm Many plan participants are eager to work with financial advisors. According to a 2024 study by American Century Investments, over half use a financial advisor, and among those who don’t, 39% plan to do so in the future. At Betterment, we found in our Retirement Readiness Report that 21% would consider switching jobs to one that offers access to a live financial advisor. Engaging with retirement plan participants can be a powerful way for advisors to expand their client base. A 2024 Capital Group study found that high-growth wealth managers were: More likely to have 25% or more of their AUM in defined contribution plans 23% more likely to have a strategy for transitioning plan participants into prospects for their practice. Additionally, the study found that advisors can uncover a $1 million prospect for every 10 meetings they have with participants in medium to large plans. If you’re not already serving retirement plans, restructuring your firm to do so can be a gateway to growth. Plan participants have complex financial lives, and many will welcome advice on how to manage their overall wealth. Benefit 2: Manage clients’ full financial picture On the wealth management side of your business, clients look for holistic advice. Their retirement nest egg is part of their wealth, after all. Your current wealth management clients likely have sizable assets in their retirement plans and could benefit from your advice on portfolio allocation and management. Whether they’re switching jobs, starting a business, or reallocating funds, you can help them make informed decisions across their entire financial life. Vanguard’s “How America Saves 2025” report found that average plan participant account balances increased by 10% in 2024, reaching an all-time high of $148,153. CNBC reported that about two-thirds of rollover investors hold cash unintentionally because the funds are initially placed in a cash account. You have the opportunity to position your firm as a one-stop resource for financial wellness, retaining clients by helping them manage their entire financial life. How to overcome the challenges of managing wealth and retirement clients Serving wealth and retirement plans usually requires restructuring your firm. Below are three potential obstacles and how our team at Betterment can help you overcome them. Challenge 1: Provide holistic financial planning at scale The challenge: Serving multiple retirement plans simultaneously, each with dozens or even hundreds of participants, can make retirement planning at scale overwhelming for your firm without the right platform. How Betterment helps: Receive dedicated support from day one to streamline plan management—so you can focus on growing your business. A Senior 401(k) Onboarding Associate will be your dedicated point of contact to help you onboard new clients and offer ongoing support. You’ll also be assigned a 401(k) Client Success Manager, who will be your go-to contact for any questions, along with helping you set goals, manage plan changes, navigate Form 5500 filings, and create tailored education for plan participants. Challenge 2: Staying on top of regulatory compliance The challenge: Staying compliant takes work—and plenty of time. You’ll not only need to stay on top of legislative and regulatory changes related to retirement plans, but also your firm’s compliance and legal policies. How Betterment helps: We are your 3(16) administrator, handling compliance testing, taking on time-intensive work, and preparing audit packages and 5500s. We have a team of compliance experts with ASPPA, NAPA, and IRS designations, plus 50+ years of combined compliance experience. Challenge 3: Managing technologies to serve retirement plans The challenge: Serving retirement plans will require your firm to adopt new technologies to automate planning, compliance, and communications at scale. Trying to piece a tech stack together by yourself can take your valuable time away from serving clients. How Betterment helps: Our all-in-one dashboard helps you track plan metrics, generate custom reports, and get participant-level data with just a few clicks. Use our tools and technology to easily convert participants to new clients, building relationships to offer holistic financial planning to meet their evolving needs. Plus, for self-employed clients, we offer a streamlined, all-digital solo 401(k). And our mobile app lets your clients see their full financial picture on the go, branded with your firm’s logo, reinforcing your value between meetings. Grow your firm with a 401(k) solution built for advisors An easy-to-use platform with customizable investment options and white glove support for you and your clients. Flexible, customizable plan design and investment options Dedicated advisor and client support for administrative needs An all-in-one platform to service clients across retirement and wealth

What’s new from Betterment Advisor Solutions Jun 30, 2025 6:06:27 PM Discover the latest products and features launched in Q2 2025, designed to give advisors more control, flexibility, and transparency. Table of Contents Portfolio management Billing SBLOCs Advisor experience New Advisor Exchange episode We’re continuously building out new tools and enhancements to help you work smarter not harder. In Q2, we introduced a wave of powerful updates—including a major acquisition and new portfolio management features designed to give you greater control and customization with less manual effort. Expanded support for legacy and concentrated positions Build custom models with ETFs, mutual funds, and now single stocks. Our latest update gives you more control without adding complexity and helps you: Bring legacy and held-away assets into a long-term strategy—powered by TLH, rebalancing, and smart withdrawals that minimize the tax impact. Use sell-only substitutes with ETFs, mutual funds, and single stocks to unwind concentrated positions gradually. You can leverage sell-only substitutes when incorporating your clients' legacy positions into your target model's asset allocation, without buying additional shares during rebalancing. Here’s what’s changed: More control over rebalancing: This functionality allows you to add additional tickers to your security groups for greater control over rebalancing behavior in your custom model portfolios. Tax-efficient exposure: Betterment will help reduce exposure over time according to your instructions with our tax-efficient algorithms. Read more about sell-only substitutes. The future of portfolio management Our recent acquisition of Rowboat Advisors, a portfolio optimization software, paves the way for direct indexing capabilities on the platform. Over the coming months, we’ll be introducing new features that deliver more customization, intelligent automation, and enhanced flexibility to support your firm’s unique needs. Be on the lookout for: Tools for more transparent trading: Run sophisticated simulations and use critical data to better understand trade impacts and make more informed decisions. Expanded portfolio options: Create and edit portfolios with a wider range of options that work seamlessly with rebalancing, tax-loss harvesting, tax-smart portfolio transitions, asset location and intelligent withdrawals. Watch our latest webinar to learn more about what’s to come in 2026, including UMAs and direct indexing. Reduced ACH payment timelines Big news: We’ve shortened our payment processing time from 12 days down to just 5 business days. You’ll get paid sooner, with more transparency. With billing and fee tracking fully integrated into the platform, it’s easy to see exactly what you’re owed each cycle—no spreadsheets, no guesswork. The result: a cleaner more efficient, billing experience that helps you stay compliant, minimize error, and save time. Upgraded mutual fund transactions Give your clients the clarity and confidence they expect when moving assets, with updates that: Eliminate withdrawal discrepancies due to fluctuating Net Asset Value (NAV). Improve fee-assessment precision, reducing the risk of over/undercharges and aligning with regulatory expectations. Simplify tax reporting for clients by ensuring the amount withdrawn matches the amount received. A faster lending solution Securities Backed Lines of Credit (SBLOCs) with Betterment Advisor Solutions give your clients access to the value of their Betterment assets as lines of credit without liquidating investments. Fast and flexible for your clients: It’s a simple, automated application process, giving your clients immediate access to their credit line after approval. Streamlined for your firm: Leverage an integrated borrowing solution that complements your investment management practice. Register for our webinar to learn more and explore how SBLOCs can become a valuable tool for serving high net-worth clients. Save your seat Securities-Backed Lines of Credit (SBLOCs) are offered by The Bancorp Bank, N.A., Member FDIC, to Betterment clients. Betterment is not a bank. See more in disclosures. Guided client tours for winning new plans Win prospects and onboard with confidence with our new Clients Tours tab. This highly requested update enables you to give plan sponsor clients a guided demo around our platform. Access client tours in the left rail of your advisor dashboard. Planning strategies for the equity-rich and cash-constrained Client. Views may not be representative. See reviews at G2. In our latest episode of The Advisor Exchange, Natalie Taylor, CFP®, founder of the Goodland Group, discusses how she maximizes planning for an underserved segment: mid-career tech professionals with complex equity compensation packages. From navigating RSUs and AMT to rethinking the AUM model and scaling with values-based planning, Natalie shares the strategies, tech, and mindset that have shaped her fast-growing firm. Watch now. It’s been a busy year—see what we launched in Q1, or get in touch with our team to learn more. Book a demo.

5 practical ways to help clients during market volatility Jun 12, 2025 1:22:38 PM Markets can be unpredictable, but with these five tips, your client’s investing strategy doesn’t have to be. During volatile markets, clients look to their advisors for more than just financial expertise. They’re looking for reassurance and perspective. Below are five ways you can help your clients keep their financial plans on track, balancing the stresses of short-term volatility and long-term goals. 1. Assess your client’s goals Volatility provides an ideal moment to review your client’s financial plan and confirm it still reflects their goals, risk tolerance, and time horizon. Recent changes in your clients’ lives, paired with market changes, can put your clients at risk of not reaching their goals. By conducting an assessment of each client’s goals, you can plan to make adjustments if needed to align assets with a client’s financial needs. For example, making sure they have enough lower-risk assets (cash or bonds) to cover shorter-term needs. You can use this opportunity to stress-test a client’s portfolio and remind them that their plan is built to weather periods like this. Tools within Betterment Advisor Solutions allow you to update risk preferences, adjust allocations, and communicate clearly how changes may affect long-term projections. 2. Use auto deposits to maintain consistent investments A simple and effective way to help clients stick to their plan is by encouraging automated deposits. When markets decline, many investors are tempted to stop making contributions, which means they could lose out on potential market gains when the market rebounds. Setting up recurring auto deposits into investment accounts can help clients stay committed to their goals regardless of market swings. Auto deposits also enable dollar-cost averaging, which spreads out purchase prices over time and helps manage downside risk. The key is consistency, and automation makes that easier to maintain. Here’s an easy explainer on dollar-cost averaging for your clients. 3. Use Cash Reserve to build a buffer Financial confidence during downturns often comes from knowing there’s money set aside for unexpected expenses. Without a cash buffer, Without a cash buffer, clients might feel pressured (or forced) to sell investments at a loss to cover unexpected expenses. Clients also risk having to tap into 401(k)s and other retirement accounts, which can come with consequences. Clients should aim to set aside 3–6 months’ (or more!) worth of expenses in a high-yield cash account and earn a competitive interest while maintaining ease of access to their funds. Using a Cash Reserve account from Betterment not only enhances liquidity but also ensures their investment strategy stays intact during market volatility. Here are tips for your clients on how to level-up their emergency fund. 4. Set up a gains allowance Market volatility often fuels the urge to “take profits” or, potentially worse, miss the opportunity altogether. Rather than managing volatility on the fly, an automated gains allowance allows you to maintain more granular control over capital gains while optimizing your client’s tax impact. Without a gains allowance, clients may struggle with the fact that they haven’t realized any profits, leading to one-off decisions. With Betterment Advisor Solutions’ tax management tools, advisors can set an annual capital gains allowance for each taxpayer in a household. With our automated tech, capital gains realized from all taxable events will contribute to the gains allowance, while all realized capital losses in taxable accounts will offset realized gains and free up room in the gains allowance. When the allowance is reached, trading will cease selling assets with unrealized capital gains but will continue selling assets at a loss. With Betterment, you can edit this allowance at any time for your clients. 5. Communicate proactively In times of uncertainty, silence can create fear. Advisors should lean into proactive communication, offering perspective, context, and empathy. Without communication, clients may lose trust in your ability to serve them and likely go elsewhere to have their questions answered. By consistently checking in with clients, you can build deeper relationships. It’s also an opportunity to build more trust by using data and historical trends to reframe market dips as opportunities, like buying at a discount, rebalancing portfolios, or optimizing taxes. Betterment’s platform offers advisors communication and planning tools to connect 1:1 with clients. Grow your RIA, even in turbulent times Betterment Advisor Solutions is the all-in-one custodial platform for independent RIAs. Get the technology and support to serve more clients, more efficiently, across investing, retirement, and cash.

SECURE 2.0 deadlines for 2025: What advisors need to know to support their clients May 22, 2025 10:57:37 AM Savvy financial advisors can leverage their knowledge of SECURE 2.0 to increase client loyalty and serve workplace plans. Here’s how. The SECURE 2.0 Act was passed in 2022, but its provisions are still being implemented. Designed to encourage more employees to save for retirement in a workplace-sponsored plan, the legislation makes it easier for employees to build emergency savings and also pay down student loans. Why is SECURE 2.0 important for advisors? Many of your clients could benefit from the SECURE 2.0 provisions, but they may need help navigating multiple decisions. In the 2024 Betterment at Work Retirement Readiness Annual Report, we found that 37% of respondents reported not having an emergency fund 41% of respondents report they are currently managing student debt With provisions that address both emergency savings and student loans, as an advisor, you can be a trusted guide for clients looking to manage a stressful financial life. SECURE 2.0 provisions that may impact your clients Whether you’re advising an entire retirement plan for a workplace or serving individual clients, the following provides you with an overview of some of the most important SECURE 2.0 provisions that may impact your clients’ financial plans. Student loan matching contributions Effective date: January 1, 2024 (new IRS guidance issued for January 2025) What’s changing: Employers can treat an employee's qualified student loan payments as elective deferrals for the purpose of making matching contributions to retirement plans, such as 401(k), 403(b), SIMPLE IRA, and governmental 457(b) plans. Purpose: This optional provision aims to assist employees who prioritize student loan repayments over retirement savings, enabling them to receive employer matching contributions even if they are not contributing directly to their retirement plan. How you can help clients: Not all employers will offer this provision. If you’re advising plan administrators, you can coach them through launching a student-loan match and help them educate their employees. For individual clients, you can help them find the right balance between retirement savings and student loan payments. Automatic enrollment for new retirement plans Effective date: January 1, 2025 What’s changing: New 401(k) and 403(b) plans established after December 29, 2022, must automatically enroll eligible employees. The initial default contribution rate must be at least 3%, increasing by 1% annually until it reaches at least 10%, but not more than 15%. Exemptions: Businesses with 10 or fewer employees, those in operation for less than three years, church plans, and governmental plans are exempt from this requirement. How you can help clients: Help your clients calculate how much they need to save. The default contribution may be appropriate for some, but not all. Additionally, you can ensure your clients are considering their workplace plan assets along with their other savings to build a healthy, holistic portfolio. Catch-up contributions (enhanced for ages 60–63) Effective date: January 1, 2025 What’s changing: Individuals aged 60 to 63 can make higher catch-up contributions to 401(k), 403(b), and governmental 457(b) plans. The limit increases to the greater of $10,000 or 150% of the standard catch-up amount, which is projected to be $11,250 in 2025. Additional notes: This enhanced limit is available only to qualified individuals who are 60 to 63. Upon reaching age 64, the standard catch-up limit applies. How you can help clients: Given the detailed nuances of this provision, you can prepare clients who are in their late 50s or early 60s plan for it. You can help them do the math and determine the right amount of catch-up contribution for them. Emergency savings accounts linked to retirement plans Effective date: January 1, 2025 What’s changing: Employers may offer pension-linked emergency savings accounts (PLESAs) to non-highly compensated employees. Employees can contribute up to $2,500 to these accounts on an after-tax basis, with the ability to make penalty-free withdrawals. Employer matching: Employers may offer matching contributions on these emergency savings, similar to standard retirement contributions. How you can help clients: It may seem simple, but some of your clients, especially if you advise workplace plans, may not have emergency savings. Or if they do, there is a good chance many don’t know how much to save. You can provide advice to ensure these clients set aside adequate savings for the unexpected. How SECURE 2.0 creates growth opportunities for financial advisors Given the need for education around SECURE 2.0, financial advisors are well-positioned to capitalize on two growth opportunities: Build client loyalty Advisors are in a position to help individual clients navigate retirement saving decisions related to their workplace plans. For example, clients may benefit from being advised on the following provisions: Catch-up contributions: Individuals aged 60 to 63 can make higher catch-up contributions, but there are IRS guidelines that your clients need to follow. Student loan matching contributions: If your clients’ employers offer student loan matching, you can help clients determine how much they should pay towards their student loans versus funding their retirement plans. Increase retirement plan business SECURE 2.0 makes it easier for workplaces to offer plans and increase participation, creating growth opportunities for advisors who serve retirement plans. Here are two ways your firm may benefit from SECURE 2.0 while advising plans: Increased plan participation: Automatic enrollment under SECURE 2.0 means more employees saving for retirement—creating more opportunities to engage, educate, and support participants with long-term financial planning. Build loyalty with plan administrators: The legislation comes with many new provisions for plan administrators to track. Advisors who are well-versed in SECURE 2.0 can establish a reputation as a trusted expert for workplace plan administrators, helping them and their employees understand the legislation. We’re here to help your firm grow Helping you grow your RIA your way. Betterment Advisor Solutions is the all-in-one custodial platform purpose-built for independent RIAs. To learn more about our digital platform, get in touch with a member of our team. Looking for knowledge to grow your business? From understanding SECURE 2.0 legislation to the latest advisor tech and everything in between, our experts at Betterment have resources to help you grow your firm. See all free advisor resources. Don’t serve retirement plans yet? Read our blog on the convergence of wealth management and retirement planning.

How to build high-net worth client relationships with an SBLOC Apr 22, 2025 9:00:00 AM Learn 5 benefits of offering an SBLOC for your firm, and how clients can leverage this modern borrowing tool to keep their investments working for them. Securities-Backed-Lines of Credit (SBLOCs) are offered by The Bancorp to Betterment clients. Betterment is not a bank. See more below. High-net worth clients often face the problem of needing liquidity, but not wanting to compromise their long-term portfolios and interrupt their wealth management plans. You can provide the solution to this problem. Offering an SBLOC allows your firm to meet clients’ liquidity needs. 5 benefits of offering an SBLOC for your firm Incorporating SBLOCs into your advisory practice shows your commitment to providing innovative and client-centric financial solutions. Many prospective or current clients may not be aware of what an SBLOC is, allowing your firm to leverage its benefits to: Attract high-net worth clients: Use the SBLOC in your marketing materials and in conversations with prospective clients. The flexibility to borrow against a portfolio without disrupting investment gains can be a strong selling point to high-net worth clients. Deepen client trust and increase retention: As you learn about your client’s financial and life goals, you can offer the SBLOC as part of financial planning conversations. Because of its flexibility, an SBLOC is a powerful planning tool that can be used to benefit a client in many situations (more on that below). Retain investment strategies: By providing liquidity without requiring your clients to sell their investments, an SBLOC allows your firm to stick to long-term strategies. This means you can maintain asset allocation for clients, ultimately helping you preserve their portfolios. Add debt management and liquidity into your planning: With an SBLOC, you can proactively help clients incorporate debt into their financial planning. But an SBLOC also gives clients immediate access to funds when unexpected opportunities or needs arise. The ability to use an SBLOC proactively or reactively adds an extra layer of flexibility to your overall wealth management planning tools. Manage both sides of a client’s balance sheet: Offering an SBLOC enables you to address both the asset and liability sides of a client’s financial picture. While clients continue growing their investment portfolios, the SBLOC provides a structured way to manage liabilities, creating a more holistic and balanced financial strategy. Common ways clients use an SBLOC Although not for purchasing securities, clients can use an SBLOC for many purposes—it’s really based on their needs and goals. Here are several practical use cases that you can share with clients: Purchase or renovate a home Clients looking to invest in real estate might not want to disturb their investment portfolios. An SBLOC can provide the funds needed for a down payment or for home renovations, allowing clients to secure or enhance a property while keeping their portfolio intact. It can also serve as a smart bridge loan for buyers, purchasing a new home while their current one is still on the market. Pay inheritance, estate, or income taxes Large tax bills from inheritance, estate planning, or income taxes can strain liquidity. With an SBLOC, clients can cover these obligations without the need to liquidate investments at inopportune times, preserving both their tax strategy and long-term growth potential. Finance business expenses Entrepreneurs and business owners often require flexible financing to cover operational expenses, expansion initiatives, or unforeseen costs. An SBLOC offers a non-disruptive way to access capital, letting them invest in their business while maintaining their personal portfolio strategy. Pay college tuition For clients planning for higher education, an SBLOC can help cover college tuition and related expenses. This solution provides immediate funds, enabling clients to meet educational needs without having to sell investments that could be yielding returns over time. Manage medical bills Unexpected medical expenses can be financially straining. An SBLOC offers a ready source of liquidity to manage high medical bills, ensuring clients can address their healthcare needs promptly while continuing to benefit from a long-term investment portfolio. Pay for a wedding Weddings can be one of life’s most memorable—and costly—events. Instead of disrupting their investment strategy, clients can use an SBLOC to cover wedding expenses, enjoying their big day without sacrificing future financial growth. The Betterment SBLOC process Betterment Advisor Solutions, in partnership with The Bancorp, has streamlined the SBLOC process to ensure a swift and efficient experience for both advisors and clients. Automated application: Clients benefit from a simple, automated application process that can be completed quickly, ensuring access to liquidity when needed. Collateral pledge: Eligible securities held in Betterment taxable legal accounts—including individual, joint, and trust accounts—are pledged as collateral. This protects the client’s portfolio while securing the credit line. Establishing the credit line: The Bancorp assesses the portfolio’s value to determine the credit line. Typically, clients can borrow between 50% and 95%* of the value of their pledged assets, depending on the nature and stability of the investments. Accessing and repaying funds: Once established, the credit line is available for draws as needed. Clients pay only interest on the outstanding balance each month, with the flexibility to repay the principal at any time. Interest rates are variable, tied to the WSJ Prime Rate plus a margin, keeping the financing competitive. Maintaining collateral value: In the event that the value of the pledged securities falls below a required threshold, a maintenance call is issued. This may require a reallocation of the portfolio to obtain higher borrowing power, the deposit of additional funds or securities, or partial repayment of the loan, to ensure the collateral remains sufficient.

What's new from Betterment Advisor Solutions Apr 4, 2025 9:35:50 AM Discover the latest products and features launched in Q1 2025, designed to enhance user experience, drive innovation, and meet the needs of financial advisors. Table of Contents Solo 401(k)s Billing Plan advisor improvements Account aggregation Advisor Exchange We’re excited to share a range of powerful platform updates, designed to help improve and streamline your client-management tasks. From a new solo 401(k) built for the self-employed to flexible billing options and improved account aggregation, check out all the latest upgrades. And, don’t miss our new video series Advisor Exchange, hosted by Tom Moore (more on that below). A better solo 401(k) is here We’re excited to share that solo 401(k)s are now available on our platform. With higher contribution limits (compared to SEP and SIMPLE IRAs) and no income restrictions, solo 401(k)s can help you maximize retirement savings for your self-employed clients. Offering solos can help you: Expand your service offering. Attract clients with self-employment income and solo business owners. Streamline wealth management. Consolidate clients’ accounts in one place, fostering more holistic planning. Strengthen client relationships. Provide diverse, tax-efficient retirement solutions and long-term planning. The Betterment solo 401(k) features: Fast, paperless account opening and e-Signature on plan agreements Digital funding for both employer and employee contributions (ACH or bank deposit) Spouse participation at no additional cost Roth and traditional tax strategies Record-keeping services provided by Betterment. –See the new solo 401(k)– Easy fee billing from Cash Reserve We’ve expanded our billing options. Now, you can assess fees directly from clients’ Cash Reserve accounts, increasing flexibility and efficiency in fee management. This can help: Improve cash flow management: You can help clients avoid liquidating investments to cover advisory fees, reducing potential tax implications. Create a seamless client experience: Ensure fee payments are handled smoothly from available Cash Reserve balances, which lets clients maintain their investment strategy without interruption. Customize billing plans: Tailor the fee structures to client preferences, and 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. * Get greater visibility into plan-level information We understand that every advisor has a unique approach to plan management. Whether you manage investments yourself or rely on Betterment’s 3(38) services, our 401(k) solution gives you the flexibility you need. With our latest unlock—the “Investment Options” tab—you’ll get access to different investment details depending on who holds the 3(38) role. 3(38) advisors: View the active fund menu for each plan, select fund details and view more information like expense ratios, fund performance, benchmark performance and prospectuses. You can download your active fund menu and aforementioned details to a .CSV file as well. Betterment 3(38) / sub-advisory role: See all available model portfolio strategies (with Core as the default QDIA investment), and select a portfolio to view its performance history, projections and holdings based on an example allocation or risk. This clear, centralized view of fund menus and portfolio options helps improve decision-making and streamline plan management. Unlock faster, actionable data with 20 new reports We know you often need to access plan data quickly ahead of client meetings. That’s why we’ve added 20 new reports—now available directly in the advisor experience on the Betterment platform. These include both participant-level details, like deferral rate history and inactive participants, and plan-level insights, such as unallocated funds and investment activity over time. With time-based metrics and a deeper view into plan performance, these reports equip you to lead more informed, impactful client conversations. –Explore our 401(k) solution– Link external accounts to joint and trust accounts We’re happy to announce this once sought-after feature is now a reality: Clients can now connect external accounts with their joint and trust accounts. Using Betterment’s advanced aggregation features, you can: Get visibility into your clients’ held-away assets so you can craft more informed investment strategies. Move money faster, now that clients have even more ways to fund their investments and manage trust distributions without the hassle of manual transfers. Tune into our brand new video series Hosted by Tom Moore, Head of Betterment Advisor Solutions, Advisor Exchange will feature financial advisors and innovators across the industry, unpacking their success stories: highs, lows, and lessons learned along the way. Because no one understands the unique challenges and opportunities of financial advising as those living it. –Tune in– And, you can always suggest a topic or nominate an advisor who has inspired you. We’ve had a jam-packed quarter, and there are even more upgrades planned for Q2. Stay tuned. If you’d like to learn more about Betterment Advisor Solutions, book a demo.

An advisor’s guide to the benefits of solo 401(k)s Feb 27, 2025 8:00:00 AM As you work with self-employed clients, here are five big reasons why a solo 401(k) may be right for them (and your firm). A solo 401(k) might just be the biggest retirement savings growth hack for your self-employed clients — and you can help them navigate it. As more people shift toward freelance work, consulting, and small business ownership, RIAs are increasingly asked about retirement planning by clients who don’t fit the traditional W-2 profile. Enter the solo 401(k): A lesser-known retirement account that just might be the ultimate savings vehicle for self-employed clients of RIAs. However, many advisors overlook the solo 401(k) or assume it’s too complex. In reality, it can be a straightforward, flexible, and powerful option for those who have no full-time employees beyond themselves (and possibly a spouse). The basics: What exactly is a solo 401(k)? A solo 401(k) is a one-participant 401(k) plan for self-employed individuals of owner-only businesses. It works similarly to a standard 401(k)—with employee and employer contribution components—but is designed specifically for businesses that do not have full-time employees other than a spouse. It’s different from SEP IRAs (which only allow employer contributions) and SIMPLE IRAs (with lower contribution limits). For many advisors (and their clients) who are less familiar with solo 401(k)s, two misconceptions commonly get in the way of using one for savings: “Solo 401(k)s are too complicated.” Some solo 401(k) providers (like Betterment Advisor Solutions) offer streamlined setup and modern digital account management. This makes it simple to manage. Once the plan is established, annual maintenance is often minimal—though advisors and participants should be mindful of certain administrative requirements, such as filing Form 5500 once the plan balance exceeds $250,000. “They’re only for high-income earners.” Contribution limits are high (we’ll cover more on that in a minute), but that doesn’t mean a lower-income entrepreneur can’t benefit. Contributions are flexible each year, so clients can scale up or down depending on business performance. Solo 401(k)s are really a simple way for self-employed individuals to save for retirement. And, they offer some added financial benefits that savers can’t get through other plans. Top 5 benefits of solo 401(k)s for your clients As you work with self-employed clients, here are five big reasons why a solo 401(k) may be right for them (and your firm). Benefit 1: solo 401(k)s are tailored for solo entrepreneurs Sole proprietors, consultants, and gig workers have unique needs. They’re juggling business expenses, unpredictable income streams, and personal financial goals. A solo 401(k) allows them to save aggressively in profitable years, and dial back contributions if cash flow tightens. Solo 401(k)s also have the added benefit of allowing spousal contributions. If a spouse is also on the payroll, he or she can contribute just like the primary business owner. This effectively doubles the family’s retirement savings potential and can significantly reduce household taxable income if making pre-tax contributions. What does this mean for advisors? More opportunity. The rise of online platforms, remote work, and freelance marketplaces means self-employment is only becoming more popular. In fact, conservative figures estimate that there are 16 million self-employed Americans. By offering guidance on solo 401(k)s, you can expand your practice to a growing client segment that often has questions about retirement planning but limited employer-sponsored options. Your firm can offer an opportunity they may not have realized they had. Benefit 2: High contribution limits One of the biggest draws of the solo 401(k) is the dual role contribution approach: Employee contribution: In 2025, individuals can contribute up to 100% of compensation or $23,500 (or $31,000 if age 50 or over). Employer contribution: As the business owner, they can also contribute up to 25% of net self-employment income (20% for sole proprietors/partnerships). Total contributions to a participant’s account, not counting catch-up contributions for those age 50 and over, cannot exceed $70,000 for tax year 2025. Combined, dual-role contributions can lead to substantially larger total contributions than are available through SEP IRAs or SIMPLE IRAs. For instance, a SEP IRA lacks the employee deferral option, so having both an employee and employer bucket in a solo 401(k) can help maximize tax-advantaged savings. Benefit 3: Tax advantages The tax benefits are very real when it comes to solo 401(k)s. By helping clients understand these benefits, you can have a significant impact on their tax burden, both now and in retirement. Pre-tax contributions: Similar to a traditional 401(k), clients who want immediate tax relief can fund their solo 401(k) with pre-tax dollars, reducing their current taxable income. This is particularly appealing to self-employed individuals, looking to lower their overall tax burden in years of high income. Roth contributions: Many solo 401(k) providers now allow Roth contributions. This means after-tax money goes in, but withdrawals in retirement are generally tax free. Offering both pre-tax and Roth options gives clients flexibility in managing their present and future tax situations. SECURE 2.0 Automatic Enrollment Tax Credit: Many miss this one, but under the SECURE 2.0 Act, if an eligible solo 401(k) adds an auto-enrollment feature to their plan, they can claim a tax credit of $500 per year for 3 years. Benefit 4: No income restrictions on contributions Unlike Roth IRAs, which have strict income limits, solo 401(k)s do not cap your ability to make Roth contributions based on income. High earners who would be locked out of a Roth IRA can still enjoy the potential for tax-free growth through a Roth solo 401(k). And let’s not forget about catch-up contributions: For clients over 50, an additional $7,500 (as of 2024) can be contributed to the employee deferral portion. This “catch-up” feature allows those who got a late start on saving to accelerate their retirement funding. Benefit 5: Prior year contributions for new plans The SECURE Act 2.0 introduced a key benefit for solo 401(k) plans: Business owners can establish a solo 401(k) by the previous year's tax filing deadline (including extensions). Employer contributions for the prior calendar year can be made up until the business’s tax filing deadline. Example: How prior contributions work If your client sets up a new solo 401(k) in March 2024, it can still count as a 2023 plan. Your client can make 2023 employer contributions until April 15, 2024 (or October 15 if they file an extension). This is a powerful opportunity for clients to catch up on retirement savings they might have overlooked during a busy year. Adding value: The advisor's role in a client’s solo 401(k) Although solo 401(k)s can be self-directed by a client, you have an opportunity to add value by guiding your client to the right plan for their overall retirement needs. Here are four ways your firm can help clients navigate solo 401(k)s: Contribution strategy: Help clients determine whether pre-tax or Roth contributions (or a mix) best suit their goals. Timing contributions strategically—especially near tax deadlines—can optimize tax savings and cash flow. Investment guidance: solo 401(k)s often offer a wide range of investment options. Advisors can provide asset allocation and diversification strategies based on each client’s risk tolerance and timeline. IRS rules and compliance: While solo 401(k)s are relatively straightforward, there are filing requirements (e.g., Form 5500 for account balances above $250,000) and rules about loans from the plan. Advisors can help keep clients on track. Long-term retirement planning: A solo 401(k) should be one part of a holistic retirement strategy. Advisors can integrate Social Security planning, insurance, and estate considerations to round out a client’s financial picture. Tips for getting started: Choosing a solo 401(k) provider When recommending or setting up a plan for your clients, look for a provider that offers transparent fees, an intuitive digital experience, and proven knowledge in compliance and recordkeeping. Also, consider the breadth of services a provider offers. Some providers also offer tools for RIAs, like custodial services or portfolio management, which can streamline your overall practice management. Introducing the Betterment solo 401(k) The Betterment solo 401(k) integrates smoothly with our all-in-one custodial platform purpose-built for independent RIAs. Modern, digital-first experience: Simplify plan set-up and ongoing management with a 100% digital process. We eliminate the administrative burden traditionally associated with solo 401(k)s by digitally opening and funding accounts with no paperwork required. Seamless ongoing management: We provide compliance support for your firm with no need to manually track contributions. Cost-effective plans: Minimize costs while maximizing savings potential for your self-employed clients. Give clients access to low-cost investments paired with the high contribution limits of a solo 401(k). Plus, clients can include spouses at no additional cost. Roth solo 401(k) option: Give your clients the flexibility to optimize their taxes by using a traditional solo 401(k) or a Roth, whatever is best for their situation.