We think you’ll be happy with these changes, but we also know that with change comes questions…
1. What are the new fees?
Betterment offers three different fee plans based on your financial needs.
Our Digital plan costs just .25% per year and offers unlimited access to automated portfolio management, tax efficient investing features, personalized financial dashboards and award-winning customer support. This plan has no minimum balance requirement.
If you’d like access to our team of CFP® professionals and licensed financial experts, you can elect into our Plus plan for .40% per year, which makes you eligible for an annual phone consultation as well as proactive account monitoring by our team of licensed experts. This plan requires a minimum balance of $100,000.
If you need more than one consultation per year, you can elect into our Premium plan for just .50% per year, which makes you eligible for unlimited calls with our team of CFP® professionals and licensed financial experts. This plan requires a minimum balance of $100,000.
All fee plans come with a fee cap on balances greater than $2 million.
Betterment’s single management fee covers everything you need, including transactions, trades, transfers, rebalancing, advice, and account administration, among other things. Unlike other companies, Betterment does not charge you transaction fees to buy and sell securities.
401(k) accounts through Betterment For Business are subject to a separate fee schedule and those balances aren’t included when determining your eligibility for Betterment Plus and Betterment Premium.
2. Why did Betterment change its fees?
We pride ourselves on offering sophisticated investing at an affordable rate. Our fees have always been great value, but now, there’s really no reason not to choose Betterment.
3. When does this pricing come into effect?
Immediately for new customers, with a free 30 day trial. Existing customers have some options (see below).
4. What are the new features?
Betterment now offers Traditional and Roth Individual Retirement Accounts. It’s everything you’ve come to expect from Betterment, with an added tax advantage.
In addition to the new low fee across all account types, those above $100,000 have access to personal advice, customized portfolios and faster deposits. Accounts with a balance of $10,000 or more have the added value of faster deposits. See our account comparison for more information.
5. Why should I open an IRA?
In addition to a personal investment account, you can now open a Traditional or Roth IRA from Betterment. An IRA is a retirement savings vehicle that offers significant tax advantages. Learn more about IRAs and the differences between a Traditional and Roth IRA.
6. Can I roll over an old IRA or 401K to a Betterment IRA?
Yes, we recommend that you do. The Betterment IRA has the lowest fees in the industry, making it an ideal place to keep your long term investments (such as money for retirement). The average investor pays 0.70% per year for a 401(k) account from a previous employer. By rolling that money over to Betterment, you’ll be able to pay a significantly lower fee – 0.15% to 0.35% – and keep more of your money for retirement. We’ve automated as much of the rollover process as possible, but also have a team dedicated to making your rollover simple. Email firstname.lastname@example.org with any questions.1
7. I’m already a Betterment customer. Do I have to pick a plan?
We will email you with details on the different fee buckets as well as the opportunity to select which one’s right for you. If you’re not quite ready to make the change, you can continue on your current plan (but we recommend taking advantage of the better rates!).
8. What if I don’t have $10,000 to invest and I can’t deposit $100 per month?
The Betterment builder account is marked by a commitment to growth, and requires automatic deposit of at least $100 per month. You still have complete access to your money and can withdraw at any time, without a penalty.
If you can’t make a commitment to use auto-deposit for at least $100 per month, you’ll be upgraded to the Better plan. Customers in the Better plan that do not have at least $10,000 in their account will pay $3 per month in lieu of the annual fee.
Questions? Concerns? Talk to us – we want Betterment to be the investing solution you love.
1We’ve updated our pricing structure since this article was published. Learn more at betterment.com/pricing
When deciding whether to roll over a retirement account, you should carefully consider your personal situation and preferences. The information on this page is being provided for general informational purposes and is not intended to be an individualized recommendation that you take any particular action.
Factors that you should consider in evaluating a potential rollover include: available investment options, fees and expenses, services, withdrawal penalties, protections from creditors and legal judgments, required minimum distributions, and treatment of employer stock. Before deciding to roll over, you should research the details of your current retirement account and consult tax and other advisors with any questions about your personal situation.