The new trend among robo-advisers might just be human advice.
Betterment, the leading independent robo-adviser, announced last week that it will offer two new service plans, both with access to a team of certified financial planners and investment advisers. The company is also changing the pricing for its existing digital offering, moving from a tiered fee structure to a flat management fee of 0.25 percent per year.
Though investor portfolios are still built and managed by computer algorithms, clients who opt in to the new services — which the company is calling Betterment Plus and Betterment Premium — will also have their accounts monitored by that team.
The services come with higher management fees and account minimums than the current offering: Betterment Plus requires $100,000 and charges an annual fee of 0.40 percent of assets managed; Betterment Premium has a $250,000 minimum balance and a 0.50 percent management fee. The company’s existing plan will now be called Betterment Digital, with a new flat fee of 0.25 percent. That service will continue to have no minimum balance requirement.
Betterment said its new plan offerings are in response to customer demand. “As our customer base has gotten older and more affluent through time, we’ve had questions come up that our tools couldn’t necessarily answer,” said Alex Benke, a Betterment vice president.
Several online advisers launched as hybrid services, combining computer algorithms and human advisers from the start. Vanguard Personal Advisor Services is the most notable; clients there are offered a team of advisers until their account balance tops $500,000, at which point they’re assigned a dedicated adviser.
Also in the space is Personal Capital, which charges 0.89 percent for accounts under $1 million but offers a dedicated financial adviser rather than round-robin advice from a team. Fidelity Go portfolios are built, monitored and rebalanced by a team at an institutional investment adviser, though those advisers aren’t available for client questions.
Benke said what sets Betterment’s new offering apart is the company’s independent status. Several other services invest clients at least partly in their own proprietary funds.
Betterment isn’t the first robo-adviser to add human advisers to its service. Blooom, a 401(k) adviser, recently added salaried advisers, with communication available by chat, e-mail and text messaging.
Arielle O’Shea is a staff writer at NerdWallet, a personal finance website.