Interview with Fidelity Go

FSRankings had the opportunity to interview Arielle Schwartz, vice president of Managed Accounts for Emerging Investors. She spoke to us about Fidelity Go, the brokerage’s robo-advisory offering.


  1. We know Fidelity Go has an “all-in” fee. Do you show a consolidated view of expenses, from both the robo-advisor layer as well as the management fees of the underlying ETFs, so that consumers can understand the aggregate management fees they are paying?

Yes we show an estimate of the all-in fee with the breakdown of total estimated costs by net advisory fee, fund expenses and other (e.g. SEC) fees.  This breakdown is on the Fidelity Go proposal page under “See the breakdown of your total estimated costs”. Clients tell us knowing what their total out-of-pocket expenses will be before they invest is very reassuring.


  1. What is Fidelity’s take on Fama-French / Smart Beta? Has your research uncovered any benefit to value, size, and momentum?

Fidelity Go is a simple, inexpensive and accessible solution designed for our younger and emerging investors. Fidelity Investments does offer Factor ETFs, and we are always reevaluating the portfolios in Fidelity Go, however our younger investors have told us that they have other key considerations that come before Factor Investing – such as help with setting budgets and establishing financial goals.


  1. Right now Fidelity Go doesn’t employ tax-loss harvesting, although there are tax-advantaged municipal bond funds. Are there any plans to change this, and what’s the strategy behind it?

While we do not currently offer tax-loss harvesting, we do offer tax advantaged municipal bond funds in our taxable portfolios because of the preferential tax treatment of their interest income. We do seek to offer our investors the best value and therefore are continually re-evaluating whether tax-loss harvesting may become a feature added in the future.


  1. How are most Fidelity funds distributed to retail investors (e.g. 401k plans, human RIAs, etc) and how does Fidelity Go affect those distribution channels? Have you had pushback from human RIAs?

Fidelity Go seeks to serve individual investors who come to us digitally for help with ongoing asset management. In addition to Fidelity Go, Fidelity Investments also offers an enormous spectrum of retail brokerage offerings directly to our customers. We do not see these offerings as competing directly with human RIAs or other institutional channels as they are typically meeting the needs of a different segment of investors.


  1. Some robo-advisors like Hedgeable have attempted to apply the latest exciting area – AI – towards portfolio management and security selection. What is your take on the role of AI in wealth management?

Fidelity is excited about the immense potential that advanced analytics and artificial intelligence offer to our industry and others. These capabilities will allow us to provide better value to our clients through not only wealth management but also in more intelligent and convenient servicing, engagement and value. That said, we know AI will never fully replace the human judgement and expertise of portfolio managers.


  1. Will Fidelity advisers proactively reach out to customers during times of market distress to coach its customers to stay in the market and/or disable access to client funds in times of financial distress?

Fidelity is always available to our clients during market volatility and we will always coach our clients on what is best for them in their unique situation. Market volatility is often the trigger for people to consider professional help with their investing, and Fidelity Go is an easy way for them to dip their toe in the water.


  1. The $5,000 account minimum is pretty low compared to most other brokers offering comparable services. What drove that decision?

For young and emerging investors, one of the most important factors in the consideration set for an account like this is the minimum to invest. They need to know that they can try the service without putting all of their savings into it. For that reason we are continually evaluating whether we should move the minimum investment amount for Fidelity Go to be even lower than it already is.

Interview with Schwab Intelligent Portfolios

FSRankings had the opportunity to interview Tobin McDaniel, Charles Schwab Senior Vice President, Digital Wealth Management. He spoke to us about Schwab Intelligent Portfolios, the brokerage’s robo-advisory offering.


1) What’s the latest AUM?

We introduced Intelligent Portfolios in March of 2015, so roughly two and a half years ago, and today it has around $20 billion in assets, making it one of the largest robo advisors in the market. There are a lot of investors out there who don’t want to build their own investment portfolio and don’t want to pay for a professional to do it either, so robo advisors like Intelligent Portfolios are an attractive option. Ultimately, a pure robo advisor does a few important things for people – it makes it easy to get started and stay on track, provides greater access to pretty sophisticated investment portfolios, and keeps costs low. That’s a proven recipe for better investing outcomes.


2) Intelligent Portfolios holds 6 to ~30% of assets in cash, which is fairly high. What would you say to potential customers who worry that strategy is too conservative?

Our approach at Schwab, and this has been consistent since Chuck started the firm more than 40 years ago, is that cash is an important asset class in a fully-diversified portfolio. Cash provides portfolio stability and diversification, which most long-term investors value in combination with realistic portfolio returns. In fact, we believe that smoothing out some of the inevitable volatility that occurs over time will keep more people invested and prevent them from trying to time the market, which is nearly impossible to do. How much cash someone has in an Intelligent Portfolios allocation depends on their risk tolerance and goals, but the typical client holds between 6 to 10 percent, which isn’t abnormal across the investing industry. We have seen third parties begin to track and compare performance across some of the most popular robo advisors, large and small, and while we believe performance is just one factor investors should care about in addition to costs and progress toward goals, Schwab has consistently been at or near the top when it comes to robo portfolio performance.


3) What is your take on Fama-French / Smart Beta? Has Charles Schwab’s research uncovered any benefit to value, size, and momentum?

Schwab Intelligent Portfolios uses a combination of market cap-weighted and fundamentally weighted methodologies to enhance the diversification of the portfolios. Our philosophy at Schwab is that both index structures should be used in combination to access the core markets and build portfolios with the potential for better results because they perform differently across market cycles. In the two and half years since we introduced Schwab Intelligent Portfolios, we have seen this level of diversification positively impact performance.


4) Some robo-advisors like Hedgeable have attempted to apply the latest exciting area – AI – towards portfolio management and security selection. What is your take on the role of AI in wealth management?

We are in the early stages of AI making an impact in our industry, but it’s a safe assumption that it will become incredibly important and central to client experience. At Schwab, we’re conducting R&D on AI, determining where and how to deploy it to our client base. Our focus is on utilizing it to enhance user experience, rather than portfolio creation or security selection. Today, we’ve got a very experienced team of investing experts who research and design the portfolios used for our robo advisor.


5) Will Charles Schwab advisers proactively reach out to customers during times of market distress to coach its customers to stay in the market and/or disable access to client funds in times of financial distress? 

We would never disable access to client funds, but we certainly have conversations with clients during periods of market volatility and uncertainty. We also post and proactively share a lot of educational content and resources to help clients understand what’s happening in the markets and economy and how our robo portfolios are behaving, and we see strong engagement with that content.

It’s a common misconception that robo advisor clients don’t ever want to talk or interact with a professional. We have clients who are happy to not engage with us, and that’s fine, but we also see significant increases in clients contacting us during market volatility. For example, during the pretty extreme market volatility in early January 2016 and then again in June 2016 during the Brexit vote, we saw client calls increase around 30 percent and online chats increase between 10 to 15 percent. Most of these clients, 99 percent, didn’t make any changes to their portfolios – they just wanted to talk with a person to confirm they would be okay. If we didn’t have people available to talk with them, who knows how many might have pulled out of the market.

Overall, we think investment advice will increasingly trend toward a mix of technology and live professionals. Schwab Intelligent Portfolios is on the more technology-heavy end of the spectrum, although we do provide access to professionals through this service if clients need them. More recently, we introduced our hybrid service, Schwab Intelligent Advisory, for people who like to rely on technology, but also want a more holistic financial plan and access to live certified professionals. Schwab Intelligent Advisory combines an in-depth financial and investment plan, ongoing access to a team of certified financial planners, and automated robo portfolios – the same portfolios we use in Schwab Intelligent Portfolios. Our new hybrid service has a $25,000 minimum and a 0.28% advisory fee that caps at $900 per quarter, so very much aligned with our focus on making investing and financial planning more accessible to more people.


6) What percent of current AUM comes from existing Schwab customers vs. new ones?

About 25 percent of assets in Schwab Intelligent Portfolios are from new clients, and we expect that to increase over time. Among those new clients more than 40 percent are under the age of 40, so we’re seeing a lot of interest from younger investors who are new to Schwab. Overall amongst our retail clients at Schwab, we have $1 trillion of self-directed assets, meaning clients who are investing without any professional advice. We’re finding that Schwab Intelligent Portfolios is an attractive investing model for them, because cost is often a barrier. With Schwab Intelligent Portfolios, investors get a sophisticated automated portfolio without paying any advisory fee, so we’ve removed higher costs as a barrier for them.


7) What would you say to a potential customer weighing the choices between a pure play like Wealthfront or Betterment, versus a legacy broker who’s just getting into the space like Fidelity or Schwab? What factor do you think differentiates Intelligent Portfolios from other robo-advisors, particularly those of existing brokerages? Is the 0% management fee cited most often by clients?

If the growth of robo advice across the industry gets more people invested, then that’s a great thing. We like to think of Schwab as the original fintech start-up that began disrupting Wall Street more than 40 years ago, so it’s a positive thing to have firms of all sizes out there innovating on behalf of investors. But we think Schwab provides a combination of features and benefits that are unique compared to the smaller start-ups and, frankly, also to the established players who are starting to introduce their own services.

First, Schwab Intelligent Portfolios is the only automated investing service to charge no advisory fee, commission or account service fees – the only thing a client pays are the underlying ETF fees, which you would pay anywhere you invest, and we build our portfolios with low cost Schwab and third party ETFs. Second, we’ve built sophisticated institutional-quality portfolios with up to 20 different asset classes, and it’s remarkable to think that retail investors can now access portfolios like this with as little as $5,000 and pay no advisory fee. Third, our clients get the proven stability and security of a firm with more than 40 years of experience and more than $3 trillion in assets, in addition to the diverse range of products and services we have available such as Charles Schwab Bank and our more than 300 branches across the country.



Betterment Teams Up with BlackRock and Goldman Sachs, Warms Up to Smart Beta

With over $10 billion of assets under management, Betterment is the world’s largest robo-advisor by nearly $3 billion. Betterment, which had previously offered only in-house portfolios of ETFs, introduced two new portfolio options for its customers through BlackRock and Goldman Sachs. Both of the portfolio options became available to all Betterment investors Wednesday.

Goldman Sachs

Betterment’s Smart Beta Portfolio Strategy with Goldman Sachs appears to represent a divergence in the company’s way of thinking about smart beta. Smart beta is an investment strategy that uses a variety of alternative factors (such as momentum, company size, and profitability) to determine which assets should be more or less heavily weighted in a portfolio, rather than just relying on traditional market capitalization-based indices.

Previously, the company had described smart beta as just “expensive beta“, and instead defended anchoring portfolios to market cap because it provides a “free ride on the collective wisdom of millions of investors and traders globally.”

Adam Grealish, Betterment’s Senior Quantitative Investment Researcher, defended their decision. “The short answer is smart beta got cheaper since the time we wrote that article,” Grealish told FSRankings. “Additionally, in that article we point out that some of smart beta’s performance simply came from more overall market exposure. What’s great about the GSAM offering is that it keeps an overall market exposure very close to a traditional cap weighted index while delivering exposure to other investment factors that have performed well over time.”

In Betterment’s Goldman portfolio strategy, it uses smart beta to more heavily weight companies that can be described as:

  • Good value
  • High quality
  • Strong momentum
  • Low volatility

Because it’s a smart beta strategy, the fees are slightly higher than Betterment’s core offerings, but are still very low. This Smart Beta Portfolio Strategy charges ETF expense ratios of 0.11-0.24%, compared to 0.07-0.16% for Betterment’s core offerings.


Betterment also introduced income portfolios with BlackRock. As a non-stock market alternative, income portfolios tend to be lower risk and are often a good fit for older investors approaching or at retirement age. The strategy is a diversified 100% bond basket that aims to minimize loss and preserve capital for what Betterment described as a “growing number of Betterment customers who are seeking a low-risk investment strategy.”

At each of the four available “risk levels”, the company says that the BlackRock Target Income Portfolios provide a higher level of income yield than the corresponding Betterment Portfolios with similar risk.

Interview with Vanguard

FSRankings spoke with Frank Kolimago, head of Vanguard’s Personal Advisor Services, Vanguard’s robo-advisor offering.


1) What’s the latest AUM?

As of June 30, 2017, Personal Advisor Services (PAS) had $83b in AUM.

2) Why are you so willing to share your AUM for VPAS – is it a strategy to suggest consumers should go with a winner, given how far VPAS has outpaced the pure play robo-advisors?

At Vanguard, growth is not an objective but rather the outcome of our efforts to offer a service with a compelling value proposition. As clients entrust more assets to us, we identify it more as an indicator that PAS is resonating with investors who are seeking high-quality, affordable advice. (For the record, we share PAS AUM on a reactive basis to the news media. The figure is not published on Vanguard’s website or used in our marketing materials.) Additionally, we publicly disclose our assets under management in our required annual regulatory filing.

3) What is Vanguard’s take on Fama-French / Smart Beta? Has Vanguard’s research uncovered any benefit to value, size, and momentum?

The portfolios we build through PAS are based on Vanguard’s time-tested investment methodology of low costs, balance, broad diversification, and tax efficiency.

Our focus with equity investing is to capture the equity risk premium across the globe, which we believe is a long-term, repeatable reward for taking on equity risk. On the fixed income side, we position portfolios to capture the asset-class return of the investment-grade fixed income universe.

While we do offer factor exposures in various forms—quantitative investing strategies, value/growth/size indexes, fixed income funds based on maturity and credit quality, etc.—we tend to focus on the broad asset allocation decision in advised relationships, especially in PAS. We view factors as an active option that can provide additional ways for suitable investors who understand the trade-offs to meet their longterm objectives.

4) Would Vanguard consider direct-investing, which further reduces management fees of funds and also enables tax loss harvesting? (Our apologies if VPAS already supports both)

We continually evaluate new products and services that have the ability to help our PAS clients meet their investment goals. At this time, there are many issues to consider with direct investing—cost, diversification, ability to capture equity returns (i.e., tracking error), tax-loss harvesting, etc. The benefits that many attribute to direct indexing are often very sensitive to the assumptions used. For example, many direct indexing proponents assume that all losses realized can be used immediately to offset gains, which is almost never the case.

While there may be benefits to tax-loss harvesting, many of these benefits can be captured adequately using broad-based portfolios like mutual funds or ETFs.

The challenges in implementing a direct indexing approach is that it often requires a significant amount of capital to appropriately diversify, and ongoing contributions to the account are necessary to establish new tax-lot positions.

5) Aside from state-specific muni-bond funds, does VPAS have any other approaches to achieve tax efficiency?

Yes, we believe that maximizing after-tax returns is achieved in several ways beyond the use of muni bonds. Examples include asset location, break-even analysis of existing client holdings (compares taxes on realized gains vs. costs savings with lower cost Vanguard funds), use of rebalancing bands and thresholds to minimize transaction costs, as well as tax-efficient withdrawal strategies in retirement.

6) How are most Vanguard funds distributed to retail investors (e.g. 401k plans, human RIAs, etc) and how does VPAS affect those distribution channels? Have you had pushback from human RIAs?

Retail investors have access to Vanguard funds and ETFs through a variety of ways. Approximately one-third of Vanguard’s overall asset base of $4.5 trillion as of July 31, 2017 is invested through direct retail relationships, while an additional one-third is invested through our Financial Advisor Services business (where our funds are sold through external advisors and other intermediaries).

We believe that the universe of investors who need advice is sufficiently large – and growing – offering more opportunities to all advisors. In fact, our Financial Advisor Services business is one of the largest and fastest growing parts of Vanguard. Vanguard has been a vocal proponent of the value of advice and the value of an advisor. Through our well-received Advisor’s Alpha research, we believe we have successfully quantified the value that an advisor can provide through cogent wealth management.

We also believe investors have varying preferences when working with a financial advisor, and access thresholds can vary. Some investors prefer face-to-face interactions through traditional advisors who often live and work in the communities alongside their clients. PAS is a different model that appeals to a different set of investors; specifically those comfortable with Vanguard, Vanguard investments, and a virtual relationship with an advisor.

Overall, Vanguard is a strong advocate for advice, and the growing need is offering more opportunity to advisors.

7) Some robo-advisors like Hedgeable have attempted to apply the latest exciting area – AI – towards portfolio management and security selection. What is Vanguard’s take on the role of AI in wealth management?

As an organization that focuses heavily on technology, we understand the appeal/attractiveness of AI and its ability to enhance the wealth management client experience over time. However, as mentioned earlier, the portfolios we build through PAS are based on Vanguard’s time-tested investment methodology of low costs, balance, broad diversification, and tax efficiency. Our core investment approach is to build a balanced portfolio using low-cost index mutual funds/ETFs and active mutual funds.

We believe low-cost investments such as these provide diversified investment exposure to a wide variety of market benchmarks, a high potential for tax-efficiency, low manager risk, and low minimum return variability from the market over the long term. Taking a strategic, low cost asset allocation approach with a focus on specific client goals, is how PAS believes clients can maximize their chance for long term success.

8) FSRankings understands and agrees with the argument for passive investing – what percentage of the investable universe should stay actively managed so that security prices can continue to more or less match their intrinsic value, which allows passive investing to work?

We wouldn’t say that there is a particular tipping point that can be identified, though such a point is far off. Even today with nearly 15% of the global equity market indexed, only about 5% of the trading volume of individual U.S. equities reflects activity of passive investors. In other words, 95% of the daily price discovery is being made by investors assessing the relative value of individual securities (i.e., active views).

9) Will VPAS advisers proactively reach out to customers during times of market distress to coach its customers to stay in the market and/or disable access to client funds in times of financial distress?

Clients enroll in PAS to partner with us to recommend and implement a financial plan for their portfolio. The primary benefit of partnering in this manner is that by giving all clients the ability to speak with our advisors, we can then serve as behavioral coaches for them in times of market volatility. We understand that investing invokes emotion, and our advisors strive to help their clients maintain a long-term perspective and a disciplined approach, particularly in times of market volatility. While we urge clients to maintain that long-term focus and to not change course solely on account of short-term market events, we do not restrict clients’ access to their accounts.

Our advisor team (approximately 525) works to develop an understanding of the unique sensitivities of the clients they serve, and they reach out in ways those clients will appreciate (e.g., by phone, videoconferencing or email) to provide reassurance about the long-term merits of their investment strategy. Additional outreach includes other web-based tactics—distributing communications directly to clients or posting them online, presenting prepared videos online and live webinars—for PAS clients.

10) What percent of current AUM comes from existing Vanguard customers vs. new ones?

Since the launch of PAS in 2015, the vast majority of our PAS clientele have come from our existing Vanguard client base. We attribute much of this crossover to the appeal of the service and the value clients see in having an advisor, often as they get closer to or transition to retirement.

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Interview with Hedgeable

FSRankings spoke with Hedgeable’s sales team in an exclusive interview:

1) You said two years ago that you wanted 50% of your business to be outside the U.S. How are you doing in reaching that goal? What markets are you focusing on now?

We are doing great! We have an open architecture platform that anyone around the world can build on top of. We believe we will have over 1 billion customers on the platform within 5 years.

2) Hedgeable offers a variety of investment options beyond ETFs, such as bitcoin and venture capital. Any plans to introduce more investment options?

We are considering adding P2P loan investing and private real estate investing.

3) Does Hedgeable continue to prefer to work through larger financial service companies rather than individuals entrepreneurs when it comes to licensing? Or has the outlook changed?

We will consider both. If a startup has an awesome idea and we think it’s a good long-term value proposition to the end customer we are open to chatting.

4) Can you talk more about why Hedgeable does not do dollar-cost averaging and how it conflicts with downside protection?

When clients signup they can be anywhere from 0%-100% invested in their strategic asset allocation from day one, so phasing in purchases via dollar cost averaging would be contradictory.

5) How do you construct your asset allocations? Given the flaws with mean-variance optimization, do you essentially overlay MVO with your own backtesting and sensitivity analysis? What data are you relying on for covariances of asset classes with relatively low data like private equity and real estate?

We have six different optimization methods, which includes MVO, but also more proprietary optimizations that look at drawdowns and VaR. We have proprietary methods for estimating correlation among securities, and our AI Lab is always working on new machine learning elements to these different algorithms.

6) What is the vehicle you use to enable real estate investments? Is it simply an allocation to publicly traded REITs? Private REITS? Delaware Statutory Trusts?

We purchase publicly traded REITs for real estate exposure.

7) What’s your recommendation of BitCoin as an investable asset? Is it for everyone? how do you figure out how much to allocate given BitCoin prices given we haven’t seen how cryptocurrencies perform during a time of severe financial distress? What is the correct way to set an allocation between different cryptocurrencies like BitCoin and Etherium?

We were the first retail platform to recommend and invest in bitcoin years ago, so we are obviously big fans of the technology. Please see our white paper on bitcoin investing to read more about risks and allocation decisions. We recommend that investors understand the underlying technologies of Ethereum and other new coins before making any purchase decisions and that they consult with a financial professional to see if they can afford to take the risks.

8) Your downside protection methodology is CPPI. How would it have performed though historical periods (e.g. say each of the last 10 decades)?

It actually is a variation of CPPI that is time-weighted. We have applied many proprietary methods on top of this framework over the years. Over time we believe this method would have helped investors to alleviate very large portfolio drawdowns, but we do not believe investors should rely on very long dated historical data when making decisions due to changes in trading patterns, size of markets, and new instruments over time. Note, past performance is not indicative of future performance. We make no warranty that this methodology will prove to be beneficial to every customer in the future and we recommend customers seek out the help of financial professionals before using any methods.

9) Core-Satellite works great if the satellite generates alpha. What’s your security selection process to beat the rest of the market when it comes to figuring out which “satellites” to ride? For example IBB did very well, XLE, not so much, over the last few years.

Please see our core-satellite white paper to see how we do our security rotation.

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Interview with Betterment

FSRankings had the chance to speak with Dan Egan, VP of Behavioral Finance and Investing (via email), and Joe Ziemer, VP of Communications and Business Development (via phone call) in an exclusive interview:

1) Betterment has done a particularly good job at appealing to older consumers too, and I believe roughly 1/3 of its users are over 50. Many other robo-advisors have struggled with this older demographic. What is Betterment doing differently?

Dan: 30% of our assets come from the 50+ segment, and 66% of our assets are not from millennials. When we first started Betterment, we were receiving a lot of our business from millennials due to the fact that we are an online service with no account minimum making it very easy to start investing. As we grew and evolved as a company and continue to add on sophisticated features such as Tax Loss Harvesting, Tax-Coordinated Portfolio (Asset Location), RetireGuide, and the ability to work individually with a CFP, we saw our average client qualities began to change as well. We often talk about what millennials want, but in reality, we think they want pretty much the same thing that everyone wants. They want a better user experience, they want transparency, they want to not have to worry about things like rebalancing, they want low fees and they want a financial services company that is aligned with its customers. That is what Betterment is.

2) Betterment has in the past said that “smart beta” is just “expensive beta”. Can you elaborate on that philosophy? Do you worry about missing out on the higher management fees associated with smart beta strategies?

Dan: Historically, smart beta funds have been significantly more expensive than their market-cap counterparts. This gives them a significant headwind to generating any outperformance. We believe investors should always discount uncertain benefits relative to certain costs, and so it’s questionable if expensive smart beta makes the customer better off.

Betterment is a fiduciary, and we’ve arranged our compensation model as such. We do not receive more revenue for recommending one strategy over another. We will not force more expensive smart beta funds on our customers to make more revenue.

3) Many retail investors are increasingly turning to hybrid robo-advisor models, and Betterment itself added human advisors this year. Should we have some doubts about the role of pure-play robo-advisors model going forward?

Dan: Until the algorithms are programming themselves, there’s no such thing as a ‘pure’ robo. Betterment has CFPs who guide our algorithms and advice, and speak with customers. By knowing our customers needs closely, we can more effectively decide what features and services would help most people, the fastest. We then apply technology to deliver and scale those services.

Human advisors always will be there to help clients, but the division of labor between them and digital advice systems will evolve over the years, with the digital advisory services picking up more and more capabilities.


4) After the Brexit vote, Betterment halted trades. At the time you said it was because the market was going to be volatile. The critiques centered around disclosure – that this kind of halt was not disclosed nor could it be reasonably expected. Does Betterment stand by that decision? Should customers expect Betterment to halt trading in the future if it feels its in the  best interest of customers? Has Betterment disclosed a policy on the subject?
Joe: Yes–this is part of our policy which is publicly available.  I’d also recommend you look at the response we put out (editor’s note: here) after it happened explaining our reasoning. We do reserve this right and ultimately our goal is always to act in the best interest of our clients.


5) Acorns has an incredible small AUM per customer, and the CEO recently said at the CBInsights conference that he wasn’t worried about customers accumulating so much wealth that they’d graduate to another, more full-featured wealth manager. Does that ultimately mean that Acorns isn’t really helping its consumers accumulate sufficient wealth for retirement?
Joe: I don’t think Acorns’ users are generally looking to save enough money for retirement. That’s not their goal. Rather, they’re only investing their spare change. They have their part of the market and we have ours–they’re don’t exist in the same space that Betterment does.


6) Would Betterment ever consider having Betterment’s customers own it, similar to the Vanguard structure?
Joe: That’s something that would be very hard to institute for a company such as Betterment where that sort of ownership structure hasn’t always been in place. However, our goal is to eventually become a public company, and we’ve been clear about that. We’ve had lots of customers reach out to us and tell us that they’d love to be shareholders in this company.


7) Betterment’s basic asset allocation is stock and bond oriented. Has Betterment considered further diversifying into other asset classes, like real estate and commodities?
Joe: We pride ourselves on the level of personalization we provide, but we think stocks and bonds pretty much have us covered for most of the market. When you look at something like real estate, that’s not an area we’re making an attempt to break into. With that said, we like to offer our customers many options for their portfolios and are always looking to improve on that.

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Welcome to FSRankings!

Welcome to FSRankings! This site is all about helping you manage your financial life better.

We believe that financial services can do a lot of good. And with technology changing the industry, there are more and (mostly) better options for people to:

  • Borrow money to buy a home or start a business
  • Invest money to retire sooner, more comfortably, and leave a nest egg
  • Get paid for lost wages in case of an accident or illness
  • Accept credit card payments for your small business
  • Refinance credit card debt at a lower interest rate
  • …and anything else related to money!

But like anything technology related, there are a bewildering array of choices. Who has time to investigate them all? FSRankings does! We love understanding these tools. Let us do the work for you.

The first segment FSRankings is covering is robo-advisors, or services that take the place of both high-fee human advisors, and the do-it-yourself stock broker industry. For most people, robo-advisors are a great option to invest. You’ll be paying low fees, while benefiting from some of the greatest minds on investing. Learn more about robo-advisors.

Remember, financial services aren’t really about dollars and cents! The real reason all these financial products should exist is to make your life better by helping you retire sooner, work less, start a business, and help manage nasty surprises.

We hope you’ll find FSRankings helpful!