Skip to site content
The Show

Are Robo-Advisors the Enemy? With Jon Stein from Betterment

This week, the Money-Guys have brought on special guest Jon Stein, CEO of Betterment, to pick his brain about the robo-advisor industry.

While it might seem strange to have a “competitor” on, Jon and Brian had similar reasons for starting their businesses: to provide financial services to those who need it most in an accessible way.

Jon doesn’t view Betterment as an enemy to advisors, either. He sees it as a complement to what advisors are already offering. That’s why, since the beginning of the year, Betterment has offered institutional services to financial advisors.

Beyond that, most of Betterment’s clients are DIY investors — and only 17% of users logged in this past weekend amidst all the market volatility. Jon attributes this to the fact that Betterment clients know better. They’re in it for the long-haul and have accepted the ups and downs for what they are.

The Future of the Financial Advice Industry

Brian and Bo enjoyed getting Jon’s insights about the importance of technology and what the future of robo-advising is as well. Betterment has become a leader in the industry because of its focus on technology and clients. User experience is something Jon takes seriously — Betterment aims to provide fast service in every aspect of the process.

Brian agrees with this approach, saying keeping the client happy should be every advisors biggest concern, especially with the level of competition these days. Brian argues virtual advisors are an even bigger threat to traditional advisory firms than robo-advisors are.

How Betterment Offers More Than Technology

Speaking of traditional firms, when asked about Betterment’s competitive advantage, Jon remarks that technology and diversity are what sets its services apart. While everyone is a big fan of Vanguard, it’s known for its low-cost index funds.

It’s not known for advice (or friendly user experience). Betterment doesn’t manufacture funds, and is better suited to giving objective advice about investments than the bigger brokerage firms.

Betterment is also the only true robo-advisor that offers complete automation for clients. Advice is given automatically based on searches or questions users have, and portfolios are managed without users having to lift a finger. This allows for a better user experience, and it’s no surprise 

Betterment has the lion’s share of users out of all the other “robo-advisors” out there.

What’s the biggest risk Jon’s concerned about? The availability of talent. Betterment has assembled a great team, but as the company continues to grow, Jon hopes he can hire the “right kind of people.”

Whether or not you’re keeping up with the evolution of robo-advisors, all financial advisors can take away some key points from this podcast. Jon is a wealth of knowledge when it comes to the business, and Betterment isn’t going anywhere anytime soon.

Enjoy the Show?

Where You Can Watch and Listen:

Subscribe on these platforms or wherever you listen to podcasts for new episodes every Friday, live streams every Tuesday at 10am CT, and new highlight clips throughout the week.

Related Content

Free Resources

Financial Order of Operations®: Maximize Your Army of Dollar Bills!

Here are the 9 steps you’ve been waiting for Building wealth is simple when you know what to do and…

View Resource

Wealth Multiplier By Age

How much to save every month to become a millionaire.

View Resource

How Much Should You Save?

How much of your income can you replace in retirement? You can replace different portions of your income in retirement…

View Resource

Articles

Is it Worth Moving to Another State Just to Save Taxes?

, ,

Read More

How to Influence Your Employer’s 401(k) Plan for Optimal Benefits

, ,

Read More

How to Avoid Paying Unnecessary Taxes While Investing

, ,

Read More

Financial FAQs

Courses & Tools

How about more sense and more money?

Check for blindspots and shift into the financial fast-lane. Join a community of like minded Financial Mutants as we accelerate our wealth building process and have fun while doing it.

https://moneyguy.com/wp-content/uploads/2023/10/accent-icon-book.png

Millionaire Mission (Brian’s Book)

Buy Now
https://moneyguy.com/wp-content/uploads/2023/10/accent-icon-math.png

Know Your Number Course

Buy Now
https://moneyguy.com/wp-content/uploads/2023/10/accent-icon-pencil.png

The Money Guy Net Worth Tool

Buy Now

Recent Episodes

It's like finding some change in the couch cushions.

Watch or listen every week to learn and apply financial strategies to grow your wealth and live your best life.

maxresdefault 1

Financial Advisors React to CRAZY Advice on TikTok (Best Of)

Watch Now

Will Home Prices SKYROCKET In 2024?!

Watch Now
maxresdefault 9

How to Avoid Paying Taxes in 2024

Watch Now