Betterment has been growing its business for financial advice since 2010, and today it is launching a way for users to create custom portfolios. Dubbed Flexible Portfolios, the feature lets investors control asset class weights within the Betterment portfolio, enabling them to decide how their money is distributed.
With the launch of this new strategy, Betterment will be the first online financial advisor to provide the tools to build a more personalized portfolio while accessing low-cost fiduciary advice.
“As our customer base has grown and matured, many sophisticated investors voiced the desire to allocate investments more directly with their views and outside investments,” said Betterment CEO Jon Stein, in a statement. “We’ve continually improved our offering to include more personalized portfolio options and deliver more value for our clients.”
Flexible Portfolios balance personalization with Betterment’s investment philosophy by implementing behavioral guard rails that encourage positive investing behavior. Investors will be alerted of any allocation issues, such as poor diversification or overall risk, resulting from changes in asset class weights.
Customers who use Flexible Portfolios will receive advice about how they should be saving to reach their goal based on time horizon and expected returns. It is best suited for experienced investors who want greater control over their allocations but also covet Betterment’s suite of tax-minimizing features.
The introduction of Flexible Portfolios follows a series of improvements to the company’s platform, including enhancements to its allocation advice, portfolio optimization methodology, and the addition of the Goldman Sachs Smart Beta and BlackRock Target Income portfolio strategies.
At launch, Betterment’s Flexible Portfolios will be available to retail customers with more than $100,000 in investments.