TABLE OF CONTENTS
- About Betterment
- What is your Mission Statement?
- What is Betterment and how does it work?
- How is Betterment different?
- How is a Betterment account different than a traditional online brokerage account?
- What investments are in the Betterment portfolio?
- Why wouldn’t I just buy Betterment’s recommended ETFs directly?
- What are Betterment’s fees?
- What accounts can I open with Betterment?
- What mobile platforms does Betterment support?
- Does Betterment do a credit check?
- Who is eligible to use Betterment?
- Does Betterment support accounts for minors?
- I don’t live in the United States, can I still have an account?
- Is Betterment a regulated financial institution?
- What happens to my money if Betterment goes public, is acquired, or closes?
- How do I change my name?
- What is my Betterment account number?
- Where can I find account statements?
- How can I change my email settings in order to receive less emails from Betterment?
Betterment LLC is an SEC-Registered Investment Advisor. Brokerage services are provided to clients of Betterment LLC by Betterment Securities, an SEC registered broker-dealer regulated by FINRA. Betterment Securities is a Member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org.
What is your Mission Statement?
We are here to empower people to do what’s best for their money so they can live better.
We’re building smarter, more efficient money management for everyone. By pushing the bounds of what technology can do, by bringing together the best software and analytic thinking of diverse, cutting edge industries, we’re able to ensure that more people get the advice that they deserve. We have the ability to help free our customers to pursue what is most meaningful to them, to spend their time doing what makes them happy. And by doing that, we have the rare opportunity to help them find something positive and intangible that can’t be bought: peace of mind.
Our promise is to invest your money at a low cost, and manage it in a way that gives you a better outcome. We advise you on what to do with your money based on your personal financial situation and the goals you’re looking to achieve—we recommend how much to invest each month, how much risk to take on in your portfolio, and what type of investment account you should have.
Then, we do it all for you.
We invest your money in our globally diversified portfolio of low-cost exchange-traded funds (our investment team carefully selects these ETFs based on a variety of criteria). And we manage your money over time to help you achieve lower taxes and the best possible expected return. That means we do things like automatic rebalancing and tax loss harvesting—investment strategies that are typically time-consuming and tedious for average DIY investors to do on their own. Our award-winning Customer Support team is available 7 days a week to answer your questions.
What is Betterment and how does it work?
Betterment is the largest independent online financial advisor that serves one purpose: to help you make the most of your money. When you invest with Betterment, you are invested into a globally diversified portfolio of index-tracking exchange traded funds (ETFs). Based on your desired level of risk, Betterment recommends an optimized portfolio and manages buying and selling the funds in that portfolio for you. Betterment also provides advice based on your goals and the time or amount you want to invest.
Retiring, buying a home, having a child—these are exciting life moments that come with many financial questions. Our goal is to help you plan and prepare financially so that you save time and have peace of mind knowing your money is working for you. Our investing team comes from some of the largest institutions in financial services and our team of licensed financial experts and live customer support are here to help guide you along the way.
We pick the funds for you, we recommend an asset allocation, and we automatically do the things you don’t have to worry about to ensure your money is working for you. We take care of things like rebalancing, reinvesting your dividends, auto depositing and much more.
How is Betterment different?
Traditionally, people have manually managed their investments, which can be a very time consuming and painful process, or they’ve paid very costly fees to have access to financial advisors and advanced investment strategies.
You may be a first-time investor just starting out, a seasoned investor wondering if you could be doing better, or a retiree thinking about ways to make your nest egg last. For those seeking an alternative to expensive advisor fees or the labor-intensive process of managing one’s own investments, Betterment offers an alternative.
- Betterment’s portfolio is designed to help customers achieve optimal returns at each level of risk from their investments
- We use a variety of strategies, using technology, to help investors keep as much of those returns as possible.
We strive to offer a great user experience and design our technology to be friendly and accessible. Everyone has questions regarding financial services, but a lot of people are embarrassed to ask those questions. Through Betterment, you can ask questions and receive help from our customer support team. You can also access financial experts and receive advice through our Advice Packages or by upgrading to our Premium plan.
How is a Betterment account different than a traditional online brokerage account?
Betterment offers unique features, including:
- A straightforward pricing model without transaction charges or hidden fees.
- We focus on the only two investments which matter to most investors – a great stock basket and a conservative bond portfolio.
- An incredibly easy user experience which makes it easy to understand your money and control your exposure to risk.
- Automatic, seamless diversification (which means higher returns with lower risk).
- Automatic rebalancing of your portfolio.
- Automatic reinvestment of your dividends.
- Transaction in exact dollar amounts (so you don’t have to buy whole shares).
What investments are in the Betterment portfolio?
Here at Betterment, we have already done the research on how to help make the most of your money, and our experts have put together a portfolio so that you don’t have to. You won’t be picking and choosing your own investments. You also won’t be able to buy stocks in specific companies or industries.
Our core portfolio is comprised of a combination of stock ETFs and bond ETFs, which are globally diversified and personalized for each goal and time horizon. An exchange-traded fund (ETF) is a security that tracks an index, a commodity, or a basket of assets—just like an index fund—but trades like a stock on an exchange. We chose each ETF we invest your money in because of liquidity, diversification, and low management fees.
We also offer additional strategies for those interested in socially responsible investing (SRI), targeting income-generation, and quantitative factor investing. Each portfolio is available at the individual goal level, and adjusts its recommended allocation or target income based on your preferences and time horizon. You can have multiple portfolio strategies within your Betterment account, tailored for different financial goals.
Our chosen stock ETFs aim to efficiently capture the broad U.S. stock market, and international developed and emerging markets. Your money is invested in thousands of companies through fractional shares. Exactly how much of your portfolio is made up of which stocks depends on the exact target allocation.
For our advanced investors, we offer flexible portfolios, which allow you to adjust the weighting of each asset class with your portfolio—if you choose to do so.
You can learn more about our portfolios and historical returns here.
Why wouldn’t I just buy Betterment’s recommended ETFs directly?
While you could buy the same ETFs from a traditional broker or fund company, you couldn’t get them all from any one place without a fee, so you’d be paying to buy, sell, or trade the ETFs.
Even after you purchased those securities, you’d have to rebalance regularly — which few people do because of the work, scheduling, and transaction fees involved — to get the risk-reducing and returns-enhancing benefits of rebalancing (which Betterment handles for you, automatically). Betterment also seamlessly invests every penny according to your allocation; this means all your money is working for you. Betterment gives you advice about how to allocate your funds, and takes the guesswork out of asset allocation. We also offer you fractional shares, so again, every single penny of your money is working for you.
And Betterment’s investment committee regularly scours the market, looking for more cost-efficient index ETFs to give you consistent broad-market exposure.
Finally, when Betterment makes a sale, we sell your losses first, then gains, to minimize your tax bill.
These benefits mean there’s a lot of real value Betterment provides that you just can’t get buying ETFs on your own. We’re providing a way for you to simply make a smart investment that you can set and forget, so you can spend more time doing whatever it is you like to do more than managing your money.
What are Betterment’s fees?
Betterment’s online financial advice is available for 0.25% per year with no minimum balance. We call this our Digital plan because you receive our advice online. For 0.40% per year, you can also gain over-the-phone access to our team of CFP® professionals and licensed financial experts who can provide in-depth advice on investments outside of Betterment. This Premium plan requires a minimum balance of $100,000. Learn more about our pricing
For balances in excess of $2 million (excluding 401(k) balances through Betterment for Business), the Digital plan charges 0.15% per year and the Premium plan charges 0.30% on the portion of your balance above $2 million. Balances are calculated based on household. If you qualify for part of your balance managed free and have a balance above $2 million, the dollars managed free will be those with the higher fee.
For either plan, we calculate your fee daily so we can accurately account for deposits, withdrawals and market fluctuations that occur. We then total the fees from those daily calculations each quarter, billing you a fraction of the total annual fee. This means that if you withdraw your balance before the end of the quarter, you’re only charged the fee for the days your money was managed by Betterment.
What does the fee get you? It covers the advice you receive, the transactions, trades, transfers, and rebalancing we manage for you, and all other account administration. We do not charge you additional transaction fees to buy and sell securities.
Any fund held in your portfolio at Betterment will assess fund-level fees, called expense ratios, but Betterment aims to keep these costs low, and we receive no part of these fees.
What accounts can I open with Betterment?
To create an additional account, click “Add New” from the menu after logging in from a web browser. Or, on the mobile app, log in and click on “Add goal/account.”
There you’ll find a list of available account types to choose from. There are no fees or minimums required for additional accounts.
Betterment supports the following account types:
- Roth IRA
- Traditional IRA
- SEP IRA (single participant only)
- Inherited IRA
- To set up an inherited IRA, please email firstname.lastname@example.org.
- Individual taxable accounts
- Joint taxable accounts with rights of survivorship
- Trust accounts
- Note that you must log in from a web browser, not the mobile app, to open a trust.
Betterment does not support the following account types:
- 529 accounts
- Custodial or minor accounts
- Solo 401(k)s (for more information about our 401(k) plans, see Betterment for Business)
- Self-directed accounts (you cannot select your own funds or specific stocks)
All customers must be at least 18 years of age.
What mobile platforms does Betterment support?
Betterment supports apps on iOS and Android.
You can download them below:
Does Betterment do a credit check?
No. Since Betterment does not lend out money, the only check we do is an identification (ID) verification as required by law. We do not pull your credit score or act in any way which would impact your credit rating.
Who is eligible to use Betterment?
Betterment currently only operates in the United States*, and for regulatory reasons cannot accept international customers residing outside the United States.
Customers must have a permanent U.S. address, a U.S. Social Security Number, and a checking account from a U.S. bank.
Betterment supports residents in Puerto Rico and the Virgin Islands. We currently do not support residents in Guam.
Does Betterment support accounts for minors?
We do not offer custodial accounts for minors. All customers must be at least 18 years of age in order to consent to all our agreements.
You may, however, create separate savings goals for minors and then make deposits and withdrawals on their behalf. This works great if you’re using Betterment as a tool to show them the benefits of saving. You can even select just their goal in the Performance section of your account to show them performance data.
Additionally, if you have a trust set up for the benefit of your children, of which you are the trustee, you can create a Betterment Trust account through this link.
I don’t live in the United States, can I still have an account?
Betterment currently only operates in the United States*, and for regulatory reasons cannot accept customers residing outside the country. This includes U.S. citizens residing and/or working abroad.**
Customers must have a permanent U.S. address, a U.S. Social Security Number, a checking account from a U.S. bank, and must currently reside in the United States.
*Betterment supports residents in Puerto Rico and the Virgin Islands. We currently do not support residents in Guam.
**Betterment supports U.S. military personnel residing abroad with a valid U.S. address on file, including Army Post Office box.
Is Betterment a regulated financial institution?
Betterment is an SEC-Registered Investment Advisor, and Betterment Securities is a broker-dealer regulated by FINRA and the SEC. The securities in your account are protected up to $500,000 through SIPC.
What happens to my money if Betterment goes public, is acquired, or closes?
If Betterment were to go public or be acquired, you would maintain complete control of your brokerage account. All the underlying securities in your Betterment portfolio are owned by you; you would be free to add, withdraw or transfer your funds at any time.
In the unlikely event that Betterment were to close, your money would remain safe, and you would simply choose a new home for it. Betterment’s own corporate funds are completely separate from your customer-owned money at all times, and Betterment is not allowed to use your money to pay for its operations or take any actions other than investing for you. You own all the underlying securities in your Betterment portfolio, and if you close your account, your money will be transferred back to your linked checking account. If we were to close, the funds would then be transferred to the broker of your choosing.
If we were to wind-down, SIPC would step in and return all customer assets in our possession—not just assets up to $500,000. The protection covers scenarios where those assets are not available, but we have instituted a number of internal and external controls that ensure that SIPC protection won’t need to come into play should there be a wind-down.
The limit for SIPC protection for assets that cannot be recovered from a Betterment account is $500,000, including a limit of $250,000 for cash in the account. This amount is separate for each account type. Each of these accounts comes with $500,000 in SIPC protection per account:
1) Traditional IRA
2) Roth IRA
3) SEP IRA
4) Trust account
5) A taxable investment account
6) A taxable investment account solely under your spouse’s name
7) A Traditional IRA under your spouse’s name
8) A Roth IRA under your spouse’s name
9) A SEP IRA under your spouse’s name
10) A joint account
To provide a few examples of how this coverage works:
- If your individual account contained $1,500,000, and $1,000,000 were recovered, your remaining holdings would be replaced by SIPC (but only up to $250,000 in cash), since the unaccounted-for amount is $500,000, which falls within the limits of SIPC protection.
- If you held $1,000,000 in an individual account, and none of it could be recovered, SIPC would replace $500,000 of your holdings (but only up to $250,000 in cash), because of the $500,000 limit.
- If you held $500,000 in an individual account, $500,000 in a Roth IRA and $500,000 in a traditional IRA, and none of it could be recovered, SIPC would replace all of your lost holdings (but only up to $250,000 in cash in each account), because each account would be separately protected for up to $500,000.
For more information on how SIPC protection covers multiple accounts, visit What SIPC Protects and SIPC Protection for Investors with Multiple Accounts
While SIPC protection is an important source of reassurance for investors, it only applies in cases where securities belonging to customers become unaccounted for during a wind-down. We’re subject to intense, routine scrutiny from our regulators, specifically to ensure that customer assets are segregated from the broker dealer’s assets and are always available.
Read more in-depth about the safety and security of your account in the following article: Your Security and Trust Come First.
How do I change my name?
If you need to change your legal name at Betterment, please email email@example.com from your Betterment email address for further assistance.
What is my Betterment account number?
To view your legal account number(s), log in to Betterment from a web browser and select “Settings” from the menu and then “Accounts.”
Where can I find account statements?
We automatically upload statements in PDF format on a quarterly basis. To download your statements, log in to your Betterment account on a web browser, then select Documents > Statements.
If you require a custom account summary for a specific timeframe, select +Generate account snapshot.
How can I change my email settings in order to receive less emails from Betterment?
For emails that contain news or promotions, you can scroll down to the very bottom of the email and click on the “unsubscribe” button.
We are always working to minimize and consolidate our transactional emails as much as possible, while still fulfilling our regulatory obligations, because we know you may receive many if you have frequent transactions.
How do I contact Betterment?
Our Customer Support team is available seven days a week to help answer questions about Betterment, your account, and offer further assistance if necessary. We offer phone, email, and limited chat availability.
You can contact our Support team here.
2018-2019 Holiday Schedule
Happy holidays! The Betterment team hopes you and yours have a restful, safe, and fun-filled holiday season. For your planning purposes, we outlined the upcoming US market holidays.
Please note that when the US Market is closed, we cannot trade your investments. This may delay the trade and settle date of your transactions.
- January 21, 2019, Monday
- February 18, 2019, Monday
- April 19, 2019, Friday
- May 27, 2019, Monday
- July 4, 2019, Thursday
- September 2, 2019, Monday
- November 28, 2019, Thursday
- December 25th, 2019, Wednesday
- January 1, 2020, Wednesday
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Understanding and using time-weighted and money-weighted returns within your Betterment dashboard.
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