Who Manages my investments?

 Betterment was founded in 2008. They have over 6 Billion dollars in assets under management. Nearly 185,000 customers. They are a full services, investment advisor. This platform was designed for people who want to invest for the long term, enjoy saving time and money, and trust technology to optimize some decision making for them. 

Betterment Stock Allocation Performance Data

Why them? 

They are headquartered in New York City. They are a cutting edge technology platform. Their fees are the competitive. Provide investment management services with unconflicted financial advice. They are user friendly and provide the best experience for my customers. (We can log in anytime and see if your investment is on track) They have tools to streamline my back office operation. 

What is your/our relationship to Betterment?

My job is to set up your financial goals and Betterment automates investment management for you. Also, Betterment gives me the tools I need to be more productive. (more time spent in front of clients and gathering assets.) It allows me to make personalized advice accessible to anyone.

What is an ETF and how does it compare to a Mutual Fund?

Betterment offers globally diversified portfolios of index-tracking exchange traded funds. This is in lockstep with their goal based investing framework. Portfolio’s at Betterment are invested in literally thousands of company’s. Exactly how much depends on the exact allocation (Stocks vs. Bonds) we choose. The ETF’s capture the broad U.S. stock market, and international developed and emerging markets. 

Why an ETF and not a Mutual Fund? 

Because instead of having to pick your own stock or fund, or figure out how to invest on your own. We’ll do it all for you, carefully build your portfolio, automatically invest your money, monitor your account so that over time you get the best possible expected return. ETF’S are superior investment vehicle when it comes to portfolio management. 

ETF’s are low-cost and tax-efficient. They are transparent in that they don’t embed 12b-1 fees, which are paid to brokers recommending mutual fund’s. (This create a conflict of interest in the mutual funds they sell) The share price of an ETF is determined by supply and demand. An open-end mutual fund is determined by net asset value of the underlying assets. Unlike mutual funds, ETF’s can be priced and traded intraday by exchanges and market makers. Mutual funds can only trade once per day, right after the close of the markets.

ETF price fluctuation throughout the day allows for more granular tax loss harvesting and rebalancing opportunities. Basically when it comes to portfolio management, short term fluctuations in the prices of securities create opportunities to rebalance and tax loss harvest. Plus they can more correctly reflect current underlying prices. 


What are the names of the ETF’s I will be investing in and what is their return record?

Stocks: US Total Stock Market (Large, mid, small capitalization companies including growth and value). US Large Cap Value, US Mid Cap Value, US Small Cap Value, International Developed (UK, EUROPE, JAPAN, ETC.), Emerging Market.

Prospectus Available Here

Bonds: Short Term Treasuries (Mature in 1mo to 1year), Inflation Protection Bonds, US High Quality Bonds (Average 7 year bond maturity), US Muni Bonds (Tax Exempt), US Corporate Bonds, International Bonds, Emerging Markets Bonds.

Prospectus Available Here

The US exposure has a slight tilt toward value and small-cap stocks. This is because that style has tended to beat the market in the long term. Our Bond ETF’s seek to get the best possible return by balancing US and international interest rate and credit risk. 


Will I receive updates on the account?

Customer service is accessible 7 days a week by phone, email, or live chat.


How can I add more money to the account if I wanted to?

Regular/Automatic deposits. There are no minimums for withdrawals or deposits and the transaction times are as fast as they get in the industry. This insures rapid liquidity when you need your funds.


What if I begin to lose money? Does Betterment sell for me or reinvest in other stocks?

We will decide on the right risk level and the software will keep it in line with automatic rebalancing.


Where does the gain go? Reinvested or what?

Dividends are reinvested where you need to shore up imbalances to make sure you’re on track with your investments. 


What are the initial costs for opening an account? 0

Is there a way to invest in individual companies?

Can a second or third portfolio be opened for different kinds of goals or can we diversify the one account?