Tiburon CEO Summit extrudes big news: Betterment Institutional is born
Steve Lockshin lays out his plans for TAMP-like venture and how Michael Kitces, a public critic of the Betterment CEO, very much fits in
Jon Stein ousts himself as Betterment CEO and taps Sarah Levy, who joins an exclusive club of top women executives, with a mission -- an IPO
The co-founder of the New York robo-advisor headhunted the ex-Viacom brass through Harvard professors on the down low to ostensibly scale operations.
December 8, 2020 – 5:27 PM
Five RIA Doubletakes: An RIA-only law firm breaks away • Kitces launches picker of 'best of breed' RIA software bundles • Vanguard targets 2070 just as media targets TDFs • SEC fishing for RegBI Scofflaws, including RIAs • CFP appoints first African-American chair
RIA Lawyers will reject RIA custodians• Kitces Nascar montage is now interactive and helpful • Vanguard's super long TDF draws critics• SEC supply lines are stretched with new battle front • Kamila Elliot is ex-DFA, diverse and calling CFP shots
January 12, 2022 – 3:13 AM
Second Betterment exec departs as new CEO Sarah Levy orients to her first month on the job and is confronted by personnel matters
Chief operating officer Dustin Lucien is the latest to leave the New York City robo-advisor, one of at least eight positions open as it prepares a push across multiple business lines to ignite growth.
January 19, 2021 – 6:32 PM
Michael Kitces and Adam Birenbaum are now on the same $50-billion Buckingham team after the blogger called the young CEO with a multi-pronged proposal
Kitces is leaving Pinnacle - after 17 years - for fewer conflicts and more opportunity
March 12, 2020 – 1:45 PM
See more related moves
This is an interesting move by Betterment. I find it particularly surprising as they had previously held tightly to passive ETFs and now are beginning to flirt with active management.
My firm, QuantAdvisor, has already started doing this as of February 2014. I think there is more than enough business for both firms to exist and thrive.
Lockshin’s Betterment Institutional is interesting in that it is addressing institutionalized inefficiencies in advisory services with an emphasis on better managing custodial cost. Not many custodians are capable of serving as a master custodian in a fiduciary capacity. However to address the biggest institutionalized inefficiencies require a more modern approach to portfolio construction outside the use of terribly expensive packaged investment products made possible through inexpensive technological innovation. Not only in massive cost savings are achieved, but the degree of real time portfolio detail managed is greatly enhanced as is the advisor’s value proposition. Higher margins at the advisor level are achieved at a lower cost to the consumer. Further professional standing for the advisor and better compensation is accomplished. None of this is possible in a brokerage/custodial format (preoccupation with fiduciary liability and internal technical competency considerations) resulting in a self imposed barrier to entry for b/ds.
Robo advice will openly play the questions of (1) why brokers are not accountable or responsible for their recommendations, (2) why the best interests of the investing public are not allowed to be served by virtue of internal b/d compliance protocol and (3) why “retail investors” are accorded lesser consumer protections than all other investors. B/d and regulator push back on acknowledging and supporting the full fiduciary standing of the broker, creates troubling obsolescence in the brokerage/custodial format filled by next generation Robo advisors either used by advisors or consumer’s directly.
The advisor’s margins start looking more like that of a money manager, as the advisor is adding the value. Product vendors which by design can not be client specific become commodities.Broker/dealers are simply commodity product platforms that divorce themselves from client specific advice entailing fiduciary duty/responsibility.
Don’t discount Robo advice it is the route to scale, expert standing, lower cost, better compensation.