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Knocking down a 'wall,' Betterment will make RIA custody its 'biggest business' as Schwab/TDA merger opens door and robo-advice glut deepens

Charles Schwab undercut the New York City robo-advisor on price, but now Betterment, under new CEO Sarah Levy, can return the favor by chipping off some of Schwab's $3 trillion in RIA assets.

Author Oisin Breen February 17, 2021 at 3:44 AM
1 Comment
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Sarah Levy: I see more potential now than when I first arrived at Betterment.



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Brian Murphy

Brian Murphy

February 17, 2021 — 6:24 AM
Amazing - they continue to play within the lines of the industry constraints, while throwing spaghetti against the wall to see what sticks. The economics of B4A simply don't work in a scalable way. Fidelity & Schwab have minimum asset sizes for advisors on the order of $25MM+. If an advisor has that AUM, their platforms are free to the advisor. Using B4A would be out of pocket $31,800/yr. So any advisor getting to $25MM in AUM will switch to Fidelity or Schwab - and B4A is then constantly going after the "perpetually small" RIA. Now, as any RIA will tell you - running a $25MM book is not a stable business...you're either headed higher, or shutting the lights off after 3 or 4 years. In short what B4A is going after is after a market opportunity that is, in fact, a mirage. The "democratizers" need to re-think the world from first principles. Unfortunately, they're still not doing that. What is it that millenials and GenZ need to get to a state of financial independence? Hint - its a hybrid that combines asset AND DEBT advisory services. You gotta get the younger crowd out of debt BEFORE you advise them on asset accumulation. Now, build a service around that combination. And no, it won't look like anything out there today. Good luck nonetheless!

Related Moves

December 8, 2020 at 5:27 PM

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 at 6:32 PM

Mentioned in this article:

Betterment, LLC
Financial Planning Software
Top Executive: Jon Stein

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