Betterment’s institutional unit is considering a fee cut for advisors who use the robo-platform.
Advisors pay a flat 25 basis points to custody at Betterment, so they’ve been miffed that Betterment’s retail platform charges just 15 basis points for accounts of $100,000 or more.
“We are currently reviewing pricing across the board,” said Tom Kimberly, general manager at Betterment for Advisors, who spoke to a group of advisors at the XY Planning Network conference in San Diego on Tuesday.
“I certainly believe that fee parity is an important thing between and among all the business lines,” he said.
Kimberly told Financial Advisor that the firm has no time frame for a possible price change.
Last week, Betterment added investment strategies from Goldman Sachs and Vanguard to its institutional platform.
“That is the first step in a variety of steps that we’re taking to provide more flexibility and customization for advisors to be able to offer different investment solutions,” Kimberly said. “It’s one of the ways we’re differentiating the [Betterment platforms], which doesn’t obviate my previous statement about fee parity, but we think it’s important to give you, the advisor, more optionality in order to meet specific investment needs.”
A licensing fee Betterment had charged has “been put to bed for a while,” Kimberly added.
Another item on advisors’ wish list is a way to accommodate low-basis stock. Betterment currently accepts cash and rollovers, which fund its automated ETF portfolios.
Kimberly said the firm is working on adding capability to accept other assets and unwind them into Betterment portfolios on a tax-efficient basis.