How We Help Investors Seamlessly Switch to Betterment
Moving investment accounts from one provider to another can be tedious and complicated. We can help make it seamless.
Transitioning investment accounts from one provider to another can be complicated. You may be in the early days of exploration. Or you may be ready to make a switch but want to learn more about how Betterment will handle the trading and operational steps required to complete your transfer.
How we help customers transition to Betterment
We’ve largely automated the process of transferring outside investment accounts to Betterment.
Our in-app tooling fully addresses the needs of many customers, and some transfers can be self-serviced entirely online. While our online tools provide a great foundation, personalized guidance from an expert can make for easier transfers and help investors navigate more complex situations.
If you’re considering moving accounts to Betterment, our transfer specialists and Licensed Concierge team are available to help you explore the options and complete a smooth transition.
Fortunately, IRAs and 401(k)s can be directly transferred without creating a taxable event, so we help investors understand our philosophy, and ensure that the accounts are moved using efficient transfer methods. For taxable accounts, especially those with large embedded gains, we take things a step further, offering personalized tax-impact and break-even analyses.
Breaking down our taxable account guidance
As your fiduciary, we believe that transparency is key to making well-informed investment decisions. Whether you’re in the early stages of exploring if Betterment’s right for you, or fully sold and ready to get started, knowing the potential tax implications and the trading and operational steps required to complete your transfers is important.
Below, we offer a step-by-step preview into the Licensed Concierge-specific process.
Step 1: Review Current Situation
When a Licensed Concierge associate is connected with a new client, our first priority is to understand their main goals. We start by reviewing their current investment accounts to see if they are properly aligned to their financial goals from a fee, investment mix, and risk perspective.
Misalignment in any of these areas can impact a customer’s likelihood of reaching their goals.
We prefer connecting with clients over the phone to gather information more efficiently, but we’re also available via email. We’ll also request account statements and fee information so that we can offer a more thorough analysis.
Our free, automated tooling will analyze your account details and let you know if you’re taking on too much (or too little) risk, paying too high of fees, or don’t have proper portfolio diversification. Syncing your accounts to Betterment will also allow our human-facing teams to better guide you, if need be.
Step 2: Establish A Plan
Once we understand a customer’s current situation, our next step is to put together a comprehensive assessment and action plan. While the details are unique to each customer, at a high-level, the moving parts are largely the same.
Based on the firm where an account is currently held, the type of taxable account (individual, joint, trust), and the underlying investments, we are able to tell our customers:
- Whether making a switch to Betterment comes highly recommended based on any red flags from our Step 1 review.
- Whether the firm and account type can be moved electronically to Betterment through the ACATS network.
- Which of the current holdings (if any) can be moved to Betterment in-kind without first selling at the current provider.
- What to expect once we receive the transferred account and begin transitioning it into the target Betterment portfolio.
- What the estimated tax-impact (if any) will be to move forward with the transfer to Betterment.
The above information is delivered to the customer without industry jargon, so that making an official decision is as straightforward as possible.
Step 3: Executing The Plan
Assuming the customer would like to proceed with a transfer to Betterment, we’ll do a final check to ensure their Betterment account is set up properly. Once everything is in order from our side, we can begin implementing the transfer plan.
Since it’s likely that our team has performed transfers from the customer’s current provider to Betterment, we’re usually able to be specific about what to expect throughout the process.
We’ll communicate the steps involved, the expected timeline to complete, and when possible, we’ll handle any heavy lifting. We’ll regularly check-in and once the transfer has arrived, we’ll confirm with the customer and ensure any outstanding questions are answered.