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Democratizing Investing: BORING!

There's something dis-spiriting about the headline of the new article by Claire Cain Miller, "Another Start-Up Wants to Democratize Investing."

Articles by Jon

By Jon Stein
CEO & Founder, Betterment  |  Published: December 10, 2009

Not ANOTHER!  When will all these startups stop wanting to democratize investing?

The tone suggests that Finance 2.0 is old news, as though we’re talking about Latin American revolutions in the ’60s: These upstarts are unlikely to succeed or change anything.

Fidel, Raul, and Che in 1959
Fidel, Raul, and Che in 1959

We’ve been following the subject of this article, Covestor, since they were only this_tall.  We think they’ve launched an interesting product, one that wraps all commissions into a single fee and gives anyone a chance to be an investment advisor (although data shows that few of them will be successful).

Here at Betterment, we do it even better: Make the fee lower.  Make it a single account.  Make it one decision.  Cut out middlemen – don’t introduce more.

It’s not democracy at work, rather it’s efficiency, behavioral psychology, and decades of investing research at work.  Now thats’ something to get excited about.

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