February 21, 2024


Earlier this year, Tom Moore, Director of Betterment for Advisors Has plans for his team to support small RIAs in big wayshe mentioned tools focused on bringing customers more seamlessly into the company family as a bright spot in the company’s product roadmap.

Whether attracting new clients or transferring legacy assets, RIA Regulatory Department Nationwide Largest Independent Robo-Advisors Said hopes to make these tasks easier with some Betterment flair, which made it one of the original disruptors of wealth management in the first place.

Tom Moore, director of Betterment for Advisors

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So this week’s Integrated Toolkit This will give advisors granular control over how client assets are managed, transferred and sold – to follow Overhauling its onboarding tools in late April – Not just Moore’s product launch. This is a statement.

Like the advisor feedback that led to how these tools work, the release of Betterment For Advisors is a response to the advisor community that Betterment is investing in its RIA product line and long-term commitment to its wealth management partners.

“I think actions always speak louder than words. We certainly want to get that message across,” Moore said. “In terms of the product itself, another message we want to convey is that we want our advisors and new potential advisors to see Betterment as a place where they can keep all their client accounts.

“The message is you can bring in all the clients … We can handle those clients with more complex needs.”

Betterment’s upgrade is called “Tax Smart Asset Transformation” New research released this week go through financial plan Parent company Arizent clearly shows how important each part of the company’s transformation strategy has become.

As the war unfolds over the trillions of dollars expected to change hands over the next two decades, Arizent conducted its exclusive study of massive wealth transfers online in April of 394 wealth management professionals, including wire companies, country brokers Self-employed traders and RIAs.

The purpose of the study was to better understand how financial advisors responded to the largest wealth transfer in U.S. history. Specifically, the study examines whether advisors have the right tools and technology to attract a new class of younger clients who will inherit an estimated $73 trillion in assets by 2045, effectively communicate with and engage these clients , and build a tailor-made portfolio.

“It is important to note that 2045 is not a hard deadline. Harvard University estimates that the last baby boomers born in the early 1960s will not die until 2060 or later,” the report states. “Whatever the exact timeline, the point is that assets will change hands and advisors need to be prepared to serve these clients and their descendants who will be the beneficiaries of the next wave of wealth transfer.”

Considering that 53% of respondents believe that generational wealth is the greatest opportunity for their business growth, more than half of advisors are eyeing this historic shift. Some 57 percent of respondents reported having a wealth transfer strategy, defined in the study as a framework for ensuring a client’s ability to successfully transfer assets.

Key findings from Arizent’s research also included companies expressing interest in investing in digital tools to support customer onboarding, education, and ongoing communication.

Respondents with a wealth transformation strategy were more likely to invest in these digital tools than those without a wealth transformation strategy (56% vs. 38%). In open-ended responses, consultants noted that digital tools/technology, or lack thereof, can be a barrier to attracting and supporting younger clients.

The new functionality provided by Betterment will enable advisors to set specific capital gains allowances and easily turn rebalancing on and off on behalf of clients in order to convert client assets into a new, more accurate and tax-optimized portfolio model.

The new automation is designed to help advisors deliver personalized, tax-efficient investment management at scale, and pairs seamlessly with the latest update to Betterment’s suite of digital client onboarding options for advisors, released in April.

Other improvements include tax optimization, where client assets are automatically transferred in a tax-efficient manner; streamlined onboarding with automated features designed to help advisors join multi-client families; and customizable drift thresholds, allowing advisors to personalize for each risk level and goal drift threshold.

The idea, Moore said, is to automate a onerous task and provide a better customer experience while saving an agent’s time in the process.

“Not only do we allow advisors to take custody of legacy assets, but we’ve actually built automation in to help unwind those securities in a tax-sensible way. There are platforms that do that (and) What comes to mind is 55ip“But the fact that we have fully vertically integrated the custodian as a portfolio management tool and now adding this smart transformation capability is a very unique value proposition for advisors,” Moore said.

“From a regulatory standpoint, let’s accommodate these securities, which puts us in line with the Charles Schwabs, TDs, Fidelities of the world. But let’s sprinkle Betterment magic on it and create real automation that helps These advisors expand these kinds of accounts.”

He added that the idea behind “smart transformation” has been around for years. Betterment’s account rebalancer — built on a rules-based algorithmic system that eliminates the need for advisors to trade — is at the heart of the technology, and the new transition tool is actually an iteration of that rebalancer.

“Betterment and our product people have been thinking about this for years. But because of the opportunity we see in the RIA space, it really makes sense to bring this to market now,” Moore said. “But again, that’s what makes it unique. Betterment is great for helping advisors manage these issues, but in a way that doesn’t cause them to incur a really big tax hit. So we’re in a good position with the core trading technology that we’ve always had. “