• What is your Mission Statement?

    Last Updated: January 12, 2017 4:11PM EST
    We are here to empower people to do what's best for their money so they can live better.
     
    We’re building smarter, more efficient money management for everyone. By pushing the bounds of what technology can do, by bringing together the best software and analytic thinking of diverse, cutting edge industries, we’re able to ensure that more people get the advice that they deserve. We have the ability to help free our customers to pursue what is most meaningful to them, to spend their time doing what makes them happy. And by doing that, we have the rare opportunity to help them find something positive and intangible that can’t be bought: peace of mind.

    Our promise is to invest your money at a low cost, and manage it in a way that gives you a better outcome. We advise you on what to do with your money based on your personal financial situation and the goals you’re looking to achieve—we recommend how much to invest each month, how much risk to take on in your portfolio, and what type of investment account you should have.
     
    Then, we do it all for you.

    We invest your money in our globally diversified portfolio of low-cost exchange-traded funds (our investment team carefully selects these ETFs based on a variety of criteria). And we manage your money over time to help you achieve lower taxes and the best possible expected return. That means we do things like automatic rebalancing and tax loss harvesting—investment strategies that are typically time-consuming and tedious for average DIY investors to do on their own. Our award-winning Customer Support team is available 7 days a week to answer your questions.
     
  • Why wouldn’t I just buy Betterment’s recommended ETFs directly?

    Last Updated: January 12, 2017 4:15PM EST
    While you could buy the same ETFs from a traditional broker or fund company, you couldn’t get them all from any one place without a fee, so you’d be paying to buy, sell, or trade the ETFs.

    Even after you purchased those securities, you’d have to rebalance regularly — which few people do because of the work, scheduling, and transaction fees involved — to get the risk-reducing and returns-enhancing benefits of rebalancing (which Betterment handles for you, automatically). Betterment also seamlessly invests every penny according to your allocation; this means all your money is working for you. Betterment gives you advice about how to allocate your funds, and takes the guesswork out of asset allocation. We also offer you fractional shares, so again, every single penny of your money is working for you.

    And Betterment’s investment committee regularly scours the market, looking for more cost-efficient index ETFs to give you consistent broad-market exposure.

    Finally, when Betterment makes a sale, we sell your losses first, then gains, to minimize your tax bill.

    These benefits mean there’s a lot of real value Betterment provides that you just can’t get buying ETFs on your own. We’re providing a way for you to simply make a smart investment that you can set and forget, so you can spend more time doing whatever it is you like to do more than managing your money.
  • How is a Betterment account different than a traditional online brokerage account?

    Last Updated: April 24, 2017 1:30PM EDT
    Betterment offers unique features, including:
    • A straightforward pricing model without transaction charges or hidden fees.
    • We focus on the only two investments which matter to most investors – a great stock basket and a conservative bond portfolio.
    • An incredibly easy user experience which makes it easy to understand your money and control your exposure to risk.
    • Automatic, seamless diversification (which means higher returns with lower risk).
    • Automatic rebalancing of your portfolio.
    • Automatic reinvestment of your dividends.
    • Transaction in exact dollar amounts (so you don't have to buy whole shares).
  • What am I getting for Betterment's fee?

    Last Updated: April 24, 2017 1:33PM EDT
    Betterment’s straightforward fee is a great value. Beyond being the simplest way to invest intelligently, we offer a number of unique features under the hood which simplify your life as an investor and helps you get better returns:
    • Dollar-based transactions/fractional shares. When you transfer money to Betterment, every penny is invested into your portfolio as fractional shares, so all your money is always working for you.
    • Better diversification. Any single fund has its shortcomings. By balancing your portfolio among multiple funds, Betterment gives you appropriate exposure to small cap and value stocks while still maintaining a balance of large cap and growth stocks. Purchasing these ETFs directly and maintaining the proper balance over time would be a very demanding task.
    • Rebalancing. The composition of your portfolio will naturally drift over time as the market fluctuates, but Betterment rebalances you back to your desired allocation using cash flows, or whenever your portfolio composition drifts by 3%. Because we use your existing cash flows, we rarely have to make a sale to rebalance. Experts agree that regularly rebalancing your portfolio can increase returns and reduce risks, but even the most disciplined investors don’t do it because of all the work involved. 
    • Tax Efficiency. When we do make a sale, we sell your losses (short term, then long term) first, then your gains (long term, then short term) to minimize your tax bill. Additionally we offer services to make your portfolio more tax efficient by enabling Tax Loss Harvesting and our Tax Coordinated Portfolio. 
    • Better access to your own money. Your money is always available without a transaction fee, and without a minimum balance requirement. If you have an unexpected event and need your money, it can be back in your checking account in 4 to 5 business days.
    • Integrated and actionable advice. Our advice and RetireGuide tools give you actionable guidance, which we help you execute immediately. 
  • How is a Betterment account different than a bank savings account?

    Last Updated: April 26, 2017 1:35PM EDT
    While your Betterment account is as easy to use as an online savings account with a bank, there are a few main differences. Although most bank accounts are guaranteed not to lose value, there is a possibility that your savings interest rate may not keep up with inflation over time. As a result, a Betterment account can be more beneficial than a bank savings account due to the possibility of higher returns. Given the nature of investing, your Betterment account could lose value depending on market conditions, however the amount of risk you want to take is up to you, and is controlled by setting your allocation between a higher-return Stock Market Portfolio and an ultra-safe Treasury Bond Portfolio.
  • How secure is my personal information and identity at Betterment?

    Last Updated: April 26, 2017 1:36PM EDT
    Betterment has incorporated bank-level security measures in everything that we do. This includes the strongest available browser encryption, secure servers, and identity verification services. For more details, please review the Security & Privacy Promise section of our site.
  • Is Betterment a regulated financial institution?

    Last Updated: April 24, 2017 1:35PM EDT
    Betterment is an SEC-Registered Investment Advisor, and Betterment Securities is a broker-dealer regulated by FINRA and the SEC. The securities in your account are protected up to $500,000 through SIPC.
  • What happens to my money if Betterment goes public, is acquired, or closes?

    Last Updated: April 24, 2017 1:38PM EDT
    If Betterment were to go public or be acquired, you would maintain complete control of your brokerage account. All the underlying securities in your Betterment portfolio are owned by you; you would be free to add, withdraw or transfer your funds at any time.

    In the unlikely event that Betterment were to close, your money would remain safe, and you would simply choose a new home for it.  Betterment’s own corporate funds are completely separate from your customer-owned money at all times, and Betterment is not allowed to use your money to pay for its operations or take any actions other than investing for you. You own all the underlying securities in your Betterment portfolio, and if you close your account, your money will be transferred back to your linked checking account. If we were to close, the funds would then be transferred to the broker of your choosing.

    Furthermore, Betterment accounts are also SIPC-protected (up to $500,000 per account type) against losses resulting from the failure of a broker-dealer. Unlike FDIC insurance for banks, SIPC does not protect against losses due to normal swings in the market. An explanatory brochure is available at http://www.sipc.org

    Please note that $500,000 is the standard amount that SIPC offers for investment companies. However, also note that this amount is specific to each account type. If you open one or more of the following accounts with us, each of these comes with $500,000 in SIPC protection per account:

    1) Traditional IRA
    2) Roth IRA
    3) Trust account
    4) An account solely under your spouse’s name
    5) A Traditional IRA under your spouse’s name
    6) A Roth IRA under your spouse’s name
    7) A joint account
    8) Taxable investment account

    While SIPC insurance is an important source of reassurance for investors, it only applies in cases where securities belonging to customers become unaccounted for during a wind-down. We’re subject to intense, routine scrutiny from our regulators, specifically to ensure that customer assets are segregated from the broker dealer’s assets, and are always available. 

    If we were to wind-down, SIPC would step in and return all customer assets in our possession - not just assets up to $500,000. The insurance covers scenarios where those assets are not available, but we have instituted a number of internal and external controls that ensure that SIPC insurance won’t need to come into play should there be a wind-down. 

    To provide a concrete example of how this coverage works: if your account contained $1,500,000 and $1,000,000 were recovered, your holdings would be made whole by SIPC, since the unaccounted amount is $500,000 and covered by the limits of SIPC.

    You can also read more in-depth about the safety and security of your account in the following article:  Your Security and Trust Come First.
  • Does Betterment do a credit check?

    Last Updated: April 24, 2017 1:37PM EDT
    No. Since Betterment does not lend out money, the only check we do is an identification (ID) verification as required by law. We do not pull your credit score or act in any way which would impact your credit rating.
  • Does Betterment support accounts for minors?

    Last Updated: April 24, 2017 1:28PM EDT
    We do not offer custodial accounts for minors. All customers must be at least 18 years of age in order to consent to all our agreements.

    You may, however, create separate savings goals for minors and then make deposits and withdrawals on their behalf. This works great if you’re using Betterment as a tool to show them the benefits of saving. You can even select just their goal in the Performance section of your account to show them performance data.

    Additionally, if you have a trust set up for the benefit of your children, of which you are the trustee, you can create a Betterment Trust account through this link.
  • 2017-2018 Holiday Schedule

    Last Updated: April 24, 2017 1:25PM EDT
    Happy holidays! The Betterment team hopes you and yours have a restful, safe, and fun-filled holiday season. For your planning purposes, we outlined the upcoming US market holidays and our modified customer support schedule.
     
    US Market Holidays:
     
    Please note that when the US Market is closed, we cannot trade your investments.  This may delay the trade and settle date of your transactions.  
      
    Market Holidays:
    • January 16th, 2017, Monday
    • February 20, 2017, Monday
    • April 14, 2017, Friday
    • May 29, 2017, Monday
    • July 4th, 2017, Tuesday
    • September 4th, 2017, Monday
    • November 23rd, 2017, Thursday
    • November 24th, 2017, Friday
    • December 25th, 2017, Monday
    • January 1st, 2018, Monday
    Betterment’s Holiday Schedule:
    • January 16th, 2017, Monday: Closed
    • November 23rd, 2017, Thursday: Closed
    • November 24th, 2017, Friday: Holiday Hours 9am-6pm ET
    • December 24th, 2017, Sunday: Normal Hours 11am-6pm ET
    • December 25th, 2017, Monday: Closed
    • December 31st, 2017, Sunday: Normal Hours 11am-6pm ET
    • January 1st, 2018, Monday: Closed
  • How does Betterment’s referral program work?

    Last Updated: June 23, 2017 2:09PM EDT

    Customers can earn free time on their entire Betterment account by inviting friends and family to Betterment. For each friend who joins and funds an account from your referral link, you will receive 30 days free, and your friend will receive 3 months free. If you invite three friends who join and fund an account, you will receive one full year free.

    Important Terms & Conditions:

    Through the Betterment Refer a Friend Program you can invite friends to sign up for a Betterment account by sending them an invitation via the Betterment interface. Please send invites only to people you know personally who will be glad to get them. Betterment will send one invite and up to two reminders to each friend you invite: (1) in your name; and/or (2) with your name. The reminders may be different from the original invite and can be canceled by emailing support@betterment.com. For each "Qualifying New Account" (as defined below) Betterment will waive its fees applicable to your Betterment account for a period of 30 days, and Betterment will also waive its fees applicable to your Betterment referee friend's account for a period of 90 days, both such periods as determined by Betterment. For the third "Qualifying New Account" that you refer, Betterment will waive its fees applicable to your Betterment account for an additional year.
    Once you have referred five Qualifying New Accounts (and received the associated fee waivers), you will no longer be eligible for future fee waivers. Even when you are not eligible to receive a fee waiver, you will be permitted to send invites to friends and they will be eligible to receive fee waivers through the Betterment Refer a Friend Program.
    Subject to the limitations above, a "Qualifying New Account" is a new individual Betterment account opened by your Betterment referee friend using the special designated link from your invitation, which your referee friend funds with an initial deposit, provided that the initial deposit is not withdrawn for 90 days. Betterment is not responsible for incorrect entry or other failure on the part of your referee to meet the standards of a Qualifying New Account.
    Employer-sponsored retirement accounts provided through Betterment for Business are not Qualifying New Accounts. If you are a participant in your employer’s retirement plan through Betterment for Business, and also have a personal Betterment account, only your personal account will receive fee waivers under the Betterment Refer a Friend Program. Accounts advised through the Betterment for Advisors platform are also not Qualifying New Accounts or eligible for fee waivers through this program, and if you become advised through the Betterment for Advisors platform during a period in which Betterment is waiving the fees applicable to your account under the Refer a Friend program, Betterment will not waive any fees following such date. This promotion does not apply to any fees charged by an advisor you are matched with through the Betterment Advisor Network. Free time applies only to management fees charged by Betterment for investment advisory services and does not include any fees and expenses charged to shareholders by the Funds held in your Betterment account.
    This promotion is not valid with any other offers and is non-transferrable. Offer available to U.S. residents only. Betterment reserves the right to terminate this offer at any time for any reason, to limit the amount of account bonuses you are eligible to receive, and to refuse or recover any promotion award if Betterment determines that it was obtained under wrongful or fraudulent circumstances, that inaccurate or incomplete information was provided in opening the account, that any rules or regulations would be violated, or that any terms of the Betterment Account Agreements have been violated.
    In referring friends to open a Betterment account you are acting on behalf of Betterment and under the supervision and control of Betterment. You agree to limit the information you provide in connection with the referral to the referral web page and email provided by Betterment and further agree that you will not provide individuals with recommendations regarding their specific needs or investment decisions. You agree that your participation in the Betterment Refer a Friend Program will conform to the terms contained herein as well as the provisions of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-1, the Employment Retirement Income Security Act of 1974, 29 U.S.C. ch. 18, and the rules thereunder. You hereby represent that: (1) you are not subject to any statutory disqualification set forth in Sections 203(e) and 203(f) of the Investment Advisors Act (or any amended or replacement regulatory provision(s)); (2) you are not currently the subject of any investigation or proceeding which could result in statutory disqualification; and (3) you do not have a "place of business" at which you regularly provide investment advisory services, solicit, meet with, or otherwise communicate with clients, or any other location that is held out to the general public as a location at which you provide investment advisory services, solicit, meet with, or otherwise communicate with clients in any U.S. state. If you cannot accurately make the preceding representations, you may not participate in the Refer a Friend Program. If you are currently participating in the Refer a Friend Program and the preceding representations become inaccurate, you agree to immediately inform Betterment at support@betterment.com.

  • How do I close my account?

    Last Updated: May 30, 2017 12:05PM EDT

    If you need to close your account, the process is simple. Log in below and click your name in the header. From there you will select "Settings" which is where you will click on "Accounts" from the sub-header. Once to this page, you will click the three dots towards the right of the account you are looking to close. You then will be asked to answer one of your security questions:

    https://wwws.betterment.com/app/#profile

    This will withdraw all your funds directly to your linked bank account and disable your account. There are no trading fees or penalties for closing accounts.

    Please contact us at support@betterment.com if your decision to cancel is based on any problems you may be experiencing. If you simply need access to your funds, note that there are no fees for accounts with a $0 balance, so feel free to withdraw and keep your account open until you are ready to invest with us again. 

    If you would like to try Betterment again in the future, simply click "Add Account" at the right hand side of your Summary page.
  • What makes a strong password?

    Last Updated: June 06, 2017 2:37PM EDT
    Your security is our priority. A strong password is critical to helping to ensure that your money and data aren’t compromised, so please take a moment to read this information and make sure you are protected.  
     
    Good passwords are both long and random. When setting a password, select a longer password for the best protection. We require you to use at least eight characters in your password, although 10+ is better. Try to avoid using first or last names, common places, names of products or services, or any other information that people may know about you or that are discoverable online.
     
    One way to set a strong password is to use a passphrase. Instead of using just letters and numbers, use a collection of random words separated by hyphens, commas, spaces, or other special characters. An example passphrase could be: “elephant gray wrinkles, animals.”
     
    Another method is to take a phrase or sentence from your favorite song or book that is easy for you to remember, and use the first letter from each word. Then mix in some numbers or symbols to add some complexity. For example, “The sky is gray before it rains.” may become “Tsigb4ir.!”

    And finally, here are a few more quick tips to help ensure that your account remains as secure as possible:
     
    • Set a unique password for each service you use so that your Betterment account is safe even if another service is compromised.
    • If you ever suspect someone else may have guessed or stolen your password, change it immediately.
    • Use a password manager tool, such as 1Password or LastPass, to help you safely generate and remember your passwords.
    • Enable Two-Factor Authentication to add an additional layer of security to your account.
  • External portfolio analysis assumptions

    Last Updated: August 22, 2017 2:27PM EDT

    These assumptions apply to the analysis of external portfolios only.

    Our projections for external portfolio analysis purposes are based on an assumed 7% annual return on all non-cash investments over a 30-year period. We assume a 0% return on cash or cash equivalents like Money Market funds. 

    Your external portfolio projection of non-cash investments is net of fund-level fees (provided by Xignite per fund) and advisory fees (or plan management expenses, if applicable) at the account level. You can add or update advisory fees or plan management expenses on the External Accounts tab in Settings. For employer plans, such as 401(k)s, the plan management expense defaults to 0.6%, which includes record-keeping and other plan-level management expenses.  Other account types default to 0.0% advisory fees, so you should add these if you pay them for the most accurate advice.  

    Betterment portfolio projection comparisons are based on the Digital Plan fee of 0.25% and fund-level fees of 0.12%. Your actual performance, which depends on your allocation, your own Betterment fee tier, Betterment ETF expenses, and investment horizon, will likely be different.

    Our analysis assumes that your advisory fees and fund fees will remain constant through time.  This analysis is limited to the impact of your fees and idle cash and does not incorporate other aspects of your investment choices, including your asset allocation or tax efficiency.

    Analysis of external accounts is provided outside the scope of Betterment LLC's role as a fiduciary to your 401(k) plan.

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