Common Questions about Billing Your Clients

Common Questions about Billing Your Clients Sep 23, 2022 12:00:00 AM Get answers to your key questions about billing clients. What billing options are available to my firm? The Betterment for Advisors platform includes a “Billing” page visible to the admin(s) of your firm. This page offers three billing options: Asset-Based Billing, Fixed Fee Billing, Tiered Billing. Learn more about each in our article. How often are my clients billed? Firm admins can select whether to bill clients on a monthly or a quarterly basis. Any changes made will take effect at the start of the next quarter, though a pending change can be cancelled or modified up until that date. All advisors of the firm will be sent a reminder that their firm’s billing frequency is about to change about one week before it goes into effect. How often does Betterment pay me the fees collected on my behalf? Betterment will remit payment to your firm on the same frequency that we collect from your clients, per your discretion. If your firm has elected to bill clients monthly, Betterment will send payment in the first two weeks of each month. If your firm has elected to bill clients quarterly, Betterment will send payment in the first two weeks of each quarter. Firm admins must supply bank account information in Firm settings to receive payments. How are billing plans created? Any admin(s) of your firm will be able to create a new billing plan by following the steps below: Log onto the advisor dashboard Click Client Billing, located in the menu on the left In the top right, select “Create a billing plan” Enter a unique name for the new billing plan and select the billing plan type. (See below for specific billing plan types) How are billing plans applied? The advisor of a household will be able to do this by following the steps below: Log onto the advisor dashboard Click Clients, located in the menu on the left Search for and click the name of the household whose pricing should be updated Select Settings and click the “Edit” button corresponding to “Household Billing Plan” Choose one plan from the list displayed and click Update Plan If a different pricing plan is needed, contact an admin of the firm so they may create it How is the default billing plan of the firm updated? Any admin(s) of your firm will be able to update the default billing plan of the firm by following the steps below: Log onto the advisor dashboard Click Billing, located in the menu on the left The current default billing plan will be at the top of the list, click Edit to make changes If needed, modify the name for the plan and select the billing plan type. (See below for specific billing plan types) How to create or edit Tiered Billing Plans: Once on the “Tiered billing plan” page, use the “Firm fee” column and click on “Asset based” or “Fixed” to switch between the two. Enter the number of basis points (bps) or dollars that should be charged for the first tier of invested assets. If more than one tier is needed, click “+ Add tier” then enter the high range value for the previous tier. Repeat these steps for each tier needed. If this is not a new billing plan, the next page will display the households that will be impacted. Scroll to the bottom to click “Update billing plan.” How to create or edit Fixed Billing Plans: Once on the “Fixed Billing Plan” page, use the “Firm fee” field to type in the dollar value you’d like this plan to assess on client accounts annually. No need to type in a dollar sign, only enter the digits and a decimal if you will be charging in cents as well. If this is not a new billing plan, the next page will display the households that will be impacted. Scroll to the bottom to click “Update billing plan.” How to create or edit Asset Based Billing Plans: Once on the “Edit Asset Based Billing Plan” page, use the “Spread bps” field to type in the number of basis points you’d like charged by this billing plan. For example, for a fee of %0.50 type in 50. When satisfied with the new spread, click Save changes. If this is not a new billing plan, the next page will display the households that will be impacted. Scroll to the bottom to click “Update billing plan.” How to change the Billing Plan for groups of clients: The Client Billing page, accessible to admins of your firm, will display one row per existing billing plan. The row includes an “Assigned to” column. This displays the numbers of clients on this billing plan. To adjust the billing plan applicable to this group of clients the admin of your firm will be able to follow the steps below: Click Edit to make changes If needed, modify the name for the plan and select the billing plan type then click continue. How do I update a client's fees? To edit the fee for any existing clients advisors will need to follow the steps below: Log onto the Advisor Dashboard Select "Clients", on the left side of the window Locate the client and click their name Select "Settings" Locate and click the "Edit" button corresponding to the Fee column Select the billing plan you'd like to apply then click "Update plan" The new billing plan will appear under "Household Billing Plan" Please keep in mind, if a new billing plan needs to be created, the admin(s) of the firm will need to create the plan before you are able to apply it to any clients' household. How do I get paid for the client accounts that I manage on the platform? Betterment for Advisors operates a fee-only platform. Firm admins may create multiple billing plans using Asset Based Billing, Fixed Billing, or Tiered Billing. The billing plan applied to a client's household will, by default, include Betterment's platform fee. Aggregate fees are billed automatically by Betterment from the client’s account quarterly or monthly in arrears, and Betterment subsequently remits the advisor’s fee to the Firm bank account on file. Can I set custom level fees for individual households? Yes, you may utilize Billing Plans to set custom fees for a client's household. If any of the available Billing Plans do not fit your needs, an admin of your firm may create a new customized billing plan that is either Asset Based, Fixed, or Tiered. How are the fees calculated? We accrue fees beginning one day before the end of the prior quarter or month and the accrual of fees ends two days prior to the end of the current quarter or month. The fee is calculated pursuant to the formula [sum of the following for each day in the preceding billing period: (the balance in a client’s account at the end of the day) * (advisory fee applicable on that day)] and will be deducted from the account three days after the transaction date, following the settlement of the trade(s) made to fund the fee. Fees are billed in arrears and the advisor’s portion of the fee is sent to the advisory firm shortly after the end of the quarter or month via ACH. Are fee tiers supported? Yes, we do support fee tiers. Anyone with admin level access to the advisor dashboard may create new billing plan types, including Tiered Billing. Once the plan is created you may apply it at the household level. How are fees reported to my clients? Your clients see the total fee (platform fee + billing plan applied to the household) in their client portal on the “Activity” page and on their monthly statements. You are responsible for providing the fee breakdown between the Betterment platform fee and your advisory firm fee to your clients, though we do make this information viewable within the client’s portal under their “Settings” tab. Are there any trading or transacting costs associated with the Betterment for Advisors platform? No, there are no trading or transaction costs associated with the Betterment for Advisors platform.