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Betterment for Advisors Goal Projection and Advice Methodology Details on how projections work within Betterment for Advisors' client accounts. Betterment provides allocation, savings and withdrawal advice alongside a projection graph when customers view their goal projection under “Plan.” The graph is intended to show the possible future investment values in order to illustrate the impact of different contribution and withdrawal choices, investment time horizons, and portfolio allocations. Actual individual investor performance has varied and will continue to vary depending on market performance, the time of the initial investment, amount and frequency of contributions or withdrawals, intra-period allocation changes, and taxes. An indication of “On Track” is not a guarantee of achieving a goal in the future. Acting on savings and withdrawal advice is not a guarantee that goals will be met or that the investment will meet cost-of-living needs throughout one’s life. See our Terms and Conditions. In the following sections, we’ll provide an overview of our methodology and assumptions for each component under “Plan” in a Betterment goal. Projection Methodology and Assumptions The expected portfolio returns used in the portfolio value projection results are based on the expected returns and risk-free rate assumptions for your target Betterment portfolio allocation. (See more about how the expected returns are derived). This portfolio is set by the user-selected allocation to “stocks” and “bonds”. The allocation choice corresponds to weights of the underlying Exchange Traded Funds (ETFs), as defined in our Portfolio. The recommended allocation mix is based on user investment profile including age, the goal type, and time horizon. Monthly Contributions or Withdrawals, if specified, are assumed to be made at the end of the month. We project your balance in monthly increments, never going below twelve months. We project allocation changes on a monthly basis. For users with remaining goal terms of less than one year, our projection assumes that you maintain the allocation at the end of the goal term rather than liquidate. We sometimes map external assets to proxy assets. For investments with available data, we map holdings to our asset classes to make approximate projections of their expected risk and return. In some cases we do not have data for a specific investment, usually because the holding is a non-publicly-listed vehicle, such as a private 401(k) plan. In those cases, we use proxy tickers to determine the appropriate asset class exposures. Proxy tickers are provided by Quovo, our third-party data provider for synced external accounts. Quovo uses a proprietary process to identify similar public securities to the unknown ticker using structural information (including security type and fund name) and to qualify the confidence level of the similarity. Betterment uses Quovo’s proxy tickers only for securities that pass a threshold confidence level of similarity. Quovo’s methodology may change over time, and Betterment will continuously evaluate any such changes. Fee Assumptions There are two relevant fees for projections: (1) the Betterment platform fee (“Betterment fee”); and (2) the Advisor’s fee. Both the Betterment fee and Advisor’s fee can be found on the Settings page, under the Account tab. Betterment assumes that both fees applicable on the date the projection is displayed will remain the same through the entire projection term. For projections, Betterment calculates an effective fee that is a sum of the Betterment fee and the Advisor’s fee. For projection purposes, Betterment converts each Advisor’s fee into an effective fee rate expressed as a percentage of client assets. This Advisor’s effective fee rate is calculated using one of the following methods, depending on how the Advisor’s fees are structured: If the Advisor uses a constant asset based rate as their fee (e.g., 0.25% / year), Betterment uses that rate as the effective fee rate in its projections. If the Advisor uses a flat fee, Betterment calculates the effective fee rate as the flat fee divided by the balance of the household assets held with the Advisor at Betterment. For example, if a client has $50,000 of advised assets with an Advisor, and that Advisor charges a flat fee of $100 per year, Betterment calculates the effective fee as ($100 / year) / ($50,000) = 0.2% / year. If the Advisor uses a tiered fee system with a series of asset-brackets and marginal rates, Betterment calculates the effective fee rate by multiplying the amount of advised dollars in each bracket by the marginal rate, summing those values and dividing by the total advised dollars. For example, if an Advisor charges a tiered rate of 0.25% / year for the first $100,000 of advised dollars and 0.15% / year thereafter, and an advised client holds $150,000 with that Advisor at Betterment, Betterment calculates the effective fee as ((0.25% / year * $100,000) + (0.15% / year * $50,000)) / $150,000 = 0.217% / year. As a unified example, let’s assume that the Betterment fee is 0.25% per year. Further assume that an Advisor charges a flat fee of $500 / year and that the advised client has $100,000 of assets held with the Advisor on Betterment’s platform. The overall effective fee assumed for projections is then 0.25% / year + ($500 / year) / ($100,000) = 0.75% / year. Savings Advice Methodology and Assumptions The monthly contributions estimate is based on a 60% likelihood of the portfolio value reaching the goal target at the end of the investment term. Calculations assume the current portfolio. If the portfolio changes over time or has different expected returns, outcomes may be adjusted. Calculations will always be updated based on the current portfolio held. Savings advice and graphs are in nominal terms. Withdrawal Advice Methodology and Assumptions The monthly safe withdrawal is based on a 96% likelihood of having $0 or more at the end of the time horizon, assuming the following assumptions hold true. The safe withdrawal amount assumes the user adjusts the withdrawal rate and allocation according to our advice at least once per month. The safe withdrawal amount assumes the user does not live past the specified time horizon (“plan-to-age”). Calculations assume the current portfolio. If the portfolio changes over time or has different expected returns, outcomes may be adjusted. Calculations will always be updated based on the current portfolio held. Withdrawal advice and graphs are in real terms, using an inflation rate of 2%. The default time horizon (“plan-to age”) is 90 years of age, or age + 50 years if younger than 40, or age + 10 if older than 80. The model will use this value or the value entered by the user. Graph Explanation The Graph exhibits the possible range of projected portfolio values using color. The dark line indicates the projected portfolio value under average market conditions. This means that there is a 50% likelihood of portfolio values greater than this and a 50% likelihood of portfolio values less than this. The lighter, shaded region indicates the range within which there is 80% likelihood of the projected portfolio value. This means that there is a 10% likelihood of portfolio values greater than the top of this region, and a 90% likelihood of portfolio values at least as high as the bottom of this region. Goal Status (Savings Goals) – On Track or Off Track The Betterment Savings Advice tool constantly tracks the portfolio performance and indicates the ability of the portfolio to reach the Goal target, assuming average market performance. The portfolio performance is categorized as “On Track” or “Off Track”, and Betterment makes recommendations to increase the likelihood of reaching the Goal target. The portfolio performance is “On Track” when the total projected portfolio value exceeds the Goal target assuming average market performance. This is equivalent to a likelihood of 50% and above of reaching the Goal target. The portfolio performance is “Off Track” when the future projected portfolio value (i.e. current balance plus future contributions, plus investment growth) is not sufficient to reach the Goal target assuming average market performance. This is equivalent to having less than 50% likelihood of reaching the Goal target. Betterment provides advice for bringing the goal back on track in three areas – either increasing the amount of future monthly contributions, or increasing the term of the investment or increasing the current balance in the account by making a one-time deposit. These recommendations are based on a relatively conservative stance, e.g. a 60% likelihood of projected portfolio value to reach the Goal target, compared to the 50% chance used by other models. Limitations The Goal target is a user input and may not be sufficient to provide income for actual spending or retirement income needs. The model does not account for any taxes, except for retirement goals. All non-retirement goal values are assumed to be pre-tax. The model does not account for forced withdrawals such as Required Minimum Distributions that must be taken from pre-tax qualified retirement accounts after a certain age. The model does not account for auto-deposits that are skipped. The savings model is in nominal terms and therefore does not have a direct inflation assumption. (The withdrawal model is in real terms, and uses a 2% inflation assumption). The withdrawal model does not take into account other sources of income outside the Betterment account. A full income plan should include all sources of income and a spending needs analysis. Past performance is not indicative of future results. These projections do not guarantee investment performance. Extreme market conditions, sustained high inflation, or other unforeseen events may reduce portfolio value and withdrawals. Income is not guaranteed.

More Billing Flexibility For Advisors Betterment For Advisors has listened to advisor feedback and is now offering new Billing Plans that will provide more flexibility for how advisors can charge their clients. We value the feedback our advisors provide, and one thing we’ve heard is that they want more flexibility over client billing. Our three new Billing Plans will allow advisors to set fee structures that fit the needs of both their advisory firm and their clients. Under each plan, advisory fees will accrue daily and be assessed quarterly as usual. Advisors who have admin privileges can create new Billing Plans and set the default Plan for their firm, which will be used for new households moving forward. Any advisor can choose from the list of available Billing Plans—which are created by admin advisors—and assign any Plan to their clients. Below, we’ll outline how each Billing Plan works and give examples of how fees might look for households of varying asset ownership levels. Asset-Based Billing Fixed Fee Billing Tiered Billing Note that regardless of which Billing Plan is chosen, each advised client pays a percentage fee directly to Betterment for portfolio management. The fees represented in each Billing Plan below are additional fees (on top of Betterment's wrap fee) that are collected by Betterment on behalf of the advisor and sent to each advisory firm on a quarterly basis. Asset-Based Billing In the past, the only billing option for advisors was to charge basis points (bps) on a client’s assets, regardless of account balance. We’ll still be offering this asset-based billing option, however, it must now be applied to a total household rather than separately across a household’s legal accounts. As a reminder, legal accounts include individual taxable, joint taxable, trusts, and each type of IRA. A household consists of all legal accounts owned by one person, as well as all the accounts owned by anyone that person shares a joint account or trust with. Households can also be created by explicitly associating two or more people. Example of Asset-Based Billing Plan at 50 bps Balance Annual Fee Approx. Quarterly Fee Household 1 $50,000 $250 $62.50 Household 2 $500,000 $2,500 $625 Household 3 $3,000,000 $15,000 $3,750 For an advisor's existing households, we will automatically carry over their existing asset-based billing plan. The advisor will be able to make changes if they would like, but otherwise, there is nothing further they'll need to do. Fixed Fee Billing The ability to charge a flat annual fee is something advisors have asked for—so we’ve added it to our Billing Plan options. Advisors can now choose a fixed annual fee for their services, and apply it to households regardless of balance. The most important thing to know about this plan is that a household’s balance must be above the fixed fee amount in order for fees to accrue. For example, if the fixed fee is $5,000, a balance of $4,999 would not accrue fees. Because fees accrue daily, if a household’s balance is below the set fixed fee amount at the close of market on any given day, no fee will accrue on that day. Since fees are assessed quarterly, the annual fee will be prorated across each calendar quarter. Tiered Billing Tiered billing allows for ranges to be set for both asset-based fees and fixed fees. The tiers work similar to tax brackets, in that only the assets held within each tier’s range are charged with that tier’s rate. Below is an example of what an asset-based tiered structure might look like. Example Tiered Billing Structure: Asset-Based Asset Range Rate $0 to $100,000 100 bps $100,001 to $500,000 75 bps Over $500,001 50 bps Households under the above tiered billing structure would be charged as follows: Balance Annual Fee Approx. Quarterly Fee Household 1 $50,000 $500 $125 Household 2 $225,000 $1,937.50 $484 Household 3 $2,600,000 $14,500 $3,625 Setting A Minimum Fee Advisors can utilize the tiered structure to set a minimum fee by setting a fixed fee for the lowest asset tier, and then applying an asset-based fee for the higher subsequent tiers. Just like under the fixed fee plan, a household’s assets must be higher than the lowest fixed fee rate in order for fees to start accruing. Example Tiered Billing Structure: Fixed Fee + Asset-Based Asset Range Rate $0 to $100,000 $1,000 per year $100,001 to $500,000 75 bps Over $500,001 50 bps If you have any questions about how Billing Plans work, head to our FAQs to find answers to the most commonly asked questions. If you still need help, our Advisor Support Associates can help you find the right billing solution that works for your firm. Lastly, keep the feedback coming—we value the voices of our advisors and we will continue to make improvements to meet their dynamic needs.

Using Dimensional Funds through Betterment for Advisors Follow our instructions for getting started with using Dimensional Funds. Approved to use Dimensional Funds and ready to customize your own portfolios? It’s easy to create and brand your own custom portfolios from scratch or use one of our templates to start. Firm admins can create client portfolios directly from their Advisor Dashboard through 3 easy steps: Select the “Portfolios” tab on the left  Choose the tab labeled “Dimensional Portfolios” Select “Create Portfolio”  If additional members of your team need administrative access to the platform, simply have your firm's primary contact notify us at support@bettermentforadvisors.com. Contact us if you want to become approved with Dimensional Fund Advisors or learn more about Dimensional Funds on the Betterment platform. If you click the link above, Betterment may share your firm name with Dimensional in order to determine firm eligibility to use Dimensional Funds.

Training Video: Sync External Accounts Watch our product training video on how to assist your clients in connecting external accounts to the Betterment experience.  

Training Video: Link a Bank Account Watch our product training video on how to connect a funding account to help your clients transfer cash into Betterment.  

Client Video: Goal Based Investing Watch our product training video on Betterment's goal-based account setup and configuration.  

Training Video: Open a New Client Account Watch our product training video on how to open a new client account and get them started.  

Advisor Guide to Betterment Transfers At Betterment for Advisors, our goal is to make transferring assets on behalf of your clients easy and automatic. Not every account is eligible to be moved using the same transfer method. We’ll break down each transfer scenario and walk you through how to get started. Transferring Qualified Accounts To get started, you’ll first need to ensure your client has opened the appropriate receiving Betterment IRA. If they have not done so already, you can log into your advisor dashboard, select the specific client’s “Overview” page, and then click “Add Account.” From there, you’ll be guided through the automated account opening flow. Once done, you’ll be able to move forward with the actual direct IRA transfer request by clicking “Start a Transfer” from your advisor dashboard. At the end of the flow, your client will be emailed further instructions. As their advisor, you will be CC’d on this email to retain oversight and provide any needed guidance. Not every retirement account is eligible to be moved using the same transfer method. Our rollover flow is designed to analyze and select the most appropriate option available, given the specific account information provided by you and your client. Important note: The questions we prompt you to answer within the automated transfer flow will be used to pre-fill your client’s actual transfer request form. It’s critical that you enter accurate and up to date information on behalf of your client. Generally, when a transfer request fails or is rejected by a contra-firm, it's due to incomplete or mismatching information provided. Having a recent client statement on hand is a good best practice. We suggest confirming the following pieces of information before you get started: Client’s current account type: Legal account type and brokerage status. Client’s current account number Client’s current clearing broker: Enter the clearing broker’s name in the “Current Provider” field when prompted. Direct IRA Transfers At a high level, the possible direct IRA transfer options at Betterment are: Full or partial ACATS transfer of supported investments plus any cash. Generally, this takes 5-6 business days to complete. When adding your client’s specific tickers, if any search returns a “No match” or you receive a notice that says the ticker is not supported, you’ll only be able to submit a PARTIAL TRANSFER REQUEST on behalf of your client. Any requests submitted for a full transfer will be rejected. Supported investments will be moved in-kind to Betterment. Once received, we will liquidate any investments to cash and reinvest all the proceeds into their IRA portfolio here. Electronic fax of the client’s direct IRA transfer form to their contra firm. Generally, this takes 7-10 business days to complete. There is no physical paperwork required. Client will consent to the transfer by e-signing the transfer form and then the fax will be automatically sent by Betterment. IRA proceeds will be sent to Betterment via a mailed check and automatically reinvested into your client’s IRA portfolio here. Pre-filled direct IRA transfer form and instructions, which must be printed, signed, and mailed to the contra firm by the client. Generally, this takes 14-21 business days to complete. The client must take action from their side for the transfer to complete. In some cases, the contra firm may also require a notary or a medallion signature guarantee. IRA proceeds will be sent to Betterment via a mailed check and automatically reinvested into your client’s IRA portfolio here. If your client is attempting to transfer an inherited IRA, refer to our Inherited IRA FAQ. 401(k) and Employer-Sponsored Plan Rollovers Moving retirement money from an employer-sponsored account—such as a 401(k) or 403(b)—into an IRA is usually not an option via ACATS. We still attempt to automate this rollover process as much as possible. We generally do not need any paperwork from you or the client. You can simply get started by clicking “Transfer or Rollover” from your client’s Overview page. The rollover flow will guide you through a series of questions and then we’ll email your client a full set of personalized instructions for how to proceed. The instructions will lay out the exact next steps to take and will contain the information your client needs to complete their rollover. This includes their unique Betterment IRA account number, how their provider should make their rollover check payable, and where they can mail the rollover check. Many providers will accept employer-sponsored rollover requests from a client verbally, effectively avoiding any paperwork requirements from their side. We encourage advisors to call the current provider—with the client on the line—to verbally request any high-value rollovers. We’ve seen a stronger completion rate when this approach is taken. It’s worth noting that some providers may still require your client to fill out special rollover paperwork. If so, there’s no way around that. If any additional paperwork is required, please send all requests to support@bettermentforadvisors.com. Lastly, we will notify you and your client via email as soon as their rollover funds are invested into their IRA and everything is complete. Click here to get started. Indirect IRA Transfers In some cases, an indirect IRA transfer or rollover may be the only option available to your client. The good news is that this can be the fastest process of all and it could prevent delays due to contra firm requirements. Any cash proceeds from an early distribution out of your client’s qualified account which meets the requirements related to indirect rollovers can be re-deposited into Betterment by instructing your client to make a cash ACH deposit from their linked bank account into their Betterment IRA. If your client has not already done so, they can use these instructions to link their primary bank account. When your client is ready to make their deposit, please be sure they complete the following: Direct your client to log into their account and select “Deposit” from their Home page. The client will be prompted to choose which account to make their deposit into. If they have more than one IRA open, please be sure your client knows which one to choose specifically. Once the IRA has been selected, they will be asked to select a deposit type. Please be sure your client chooses “Indirect IRA Rollover.” Inherited IRA Transfers If your client is attempting to transfer an inherited IRA, refer to our Inherited IRA FAQ. Please CC your client and email support@bettermentforadvisors.com with the following information: Name of current provider. Type of IRA (Traditional or Roth). The IRA account number at the current provider. Indicate “full” or partial transfer. Provide the exact dollar amount to transfer if partial. Name of original IRA account holder. Since we will need to open a new legal account type, please have the client review our Customer Agreement and send us the statement, “I agree to the terms and conditions of the Customer Agreement, and I give Betterment permission to open an inherited IRA account on my behalf.” Your email will be directed to one of our rollover specialists, who will set up the inherited account at Betterment and guide you and your client through the next steps. Transferring Taxable Accounts Taxable ACATS Transfers When possible, Betterment recommends using the ACATS method to move taxable brokerage accounts to Betterment. Generally, an ACATS transfer is faster and more convenient than other types of transfers. Betterment supports ACATS transfers of nearly all ETFs, many mutual funds, some single stocks, and cash positions. We’ve created an automated taxable account transfer flow, which will ask you a series of questions on behalf of your client and ultimately determine if the account is eligible for an automated transfer. It’s possible that some of your client’s holdings are not currently allowed to be moved via ACATS. When prompted to add your client’s specific tickers, if any search returns a “No match” or you receive a notice that says the ticker is not supported, unfortunately, you’ll only be able to submit a PARTIAL TRANSFER REQUEST on behalf of your client, for the supported tickers. Any requests submitted for a full transfer will be rejected. For any holdings that we cannot move via ACATS, you can direct your client to liquidate and then transfer the cash proceeds to Betterment. Any related tax implications should be discussed prior to making this recommendation to your client. Click here to get started.  Important note: The questions we prompt you to answer within the automated transfer flow will be used to pre-fill your client’s actual transfer request form. It’s critical that you enter accurate and up to date information on behalf of your client. Generally, when a transfer request fails or is rejected by a contra-firm, it’s due to user error.  Having a recent client statement on hand is a good best practice. We suggest confirming the following pieces of information before getting started: Client’s current account type: Legal account type and brokerage status. Client’s current account number Client’s current clearing broker: Enter the clearing broker’s name in the “Current Provider” field when prompted. Please email support@bettermentforadvisors.com for any questions regarding your client’s taxable account requirements or ACATS eligibility. Non-ACATS ACH Bank Deposits Your client can initiate a cash deposit into a taxable Betterment account at any time, as long as they have successfully linked their bank account. For any taxable money they wish to move to Betterment that cannot be moved via ACATS, you can instruct your client to liquidate to cash and then move the cash proceeds to their linked bank account for funding. Any related tax implications should be discussed prior to making this recommendation to your client. To initiate the ACH deposit, instruct your client to click “Deposit” from their Home page. Note: We only allow electronic transfers from your client’s checking account via the ACH network and do not accept personal checks. For transfers greater than $300,000, wire instructions may be generated. There is no fee from Betterment for wires, but please have your client check with their bank for any fees they may be charged. To access a client’s specific wire instructions, log in as the client, select “Transfers”, then “Wire Transfers”, and follow the prompts. Get Support As always, our support team is available to assist with any questions related to moving your client’s assets. Please email support@bettermentforadvisors.com and copy your relationship manager. For more immediate assistance, call 888-646-2581.

Training Video: Digital ACATS Watch our product training video on how to use Betterment's Digital ACATS service.