Betterment Secures Two More Big-Name Managers – Financial Advisor IQ (registration)

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September 15, 2017

Robo-advice pioneer Betterment has made another strategic move in its fight to take away business from traditional financial advisors. In its latest move, the company has partnered with financial product behemoths Goldman Sachs and BlackRock to offer third-party investment options for the first time, according to Business Insider.

Betterment’s customers will now have access to a smart-beta portfolio overseen by Goldman Sachs Asset Management, according to the web publication. The product is aimed at risk-hungry investors seeking higher returns than what’s offered by index products, through exposure to real estate investment trusts, emerging markets and other riskier investments, Business Insider writes.

Meanwhile, Betterment’s more risk-averse customers will be able to reach for higher returns through BlackRock’s product composed of ETFs investing in U.S. bonds and U.S. dollar-denominated foreign bonds, according to the web publication.

The new offerings are part of a strategy to roll out new options for its customers as quickly as possible, Dan Egan, Betterment’s director of behavioral finance and investments, tells Business Insider.

After all, the firm is competing in an increasingly crowded space. While robo-advisors are forecast to manage $1 trillion by 2020 and $4.6 trillion by 2022, according to Business Insider’s research service BI Intelligence, the area continues attracting both startups and traditional financial institutions launching their own digital advice platforms.

Over the past two years there have been robo launches by United Capital, Citizens Bank, Charles Schwab, Vanguard Group, Fidelity Investments and Merrill Lynch. Morgan Stanley and Wells Fargo are also developing digital advice platforms. And BI Intelligence predicts few firms will be able to remain robo-only.

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