This kind of arrangement is typical of the ones that the practice management team at Fidelity initiates. “Our team makes referrals in a number of practice management areas,” Canter says. As an example, he cites firms that require capital: “We don’t provide capital to advisory firms, but we can help refer them to institutions that do provide capital to advisory firms.”

Both Fidelity and Betterment indicated that a deeper relationship might be in the cards. “Our hope is to build a deeper solution,” Canter said. Jon Stein, founder and CEO of Betterment, said, “We intend to deepen the relationship with Fidelity over time.” 

Betterment Institutional cites four major reasons for advisors who work with the company:

• Simplification. Spend less time crunching numbers, executing trades, filing paper, producing ad hoc reports and rebalancing portfolios. Betterment Institutional’s advanced technology makes managing client portfolios easier than it has ever been.

• Segmentation. Develop segmentation strategies for the emerging affluent millennials and Generations X and Y. Serving new segments is now as easy as the click of a button.

• Scalability. Onboard clients with a simple, paperless signup form and use Betterment Institutional’s automated portfolio services to make it easier to service more clients, more efficiently.

• Easy Start-Up. Train new advisors in an easy-to-use environment and develop a succession plan to ensure the longevity of your business.

Betterment Institutional indicated that they are working on further technology enhancements, and Fidelity indicated that they are open to expanding the relationship. Canter also indicated that this relationship is not exclusive: “This is the first of what we expect to be multiple digital solution options we offer advisors.”

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