Betterment Assets Under Management (AUM)


2021 Betterment total assets under management. Betterment AUM: client assets and number of customer accounts.



Betterment Assets Under Management (AUM)


Betterment offers very easy online investing solution to clients who are looking for simplicity and don't want to put much time and effort into investing. So how many customers and how much in total assets under management does Betterment have? Here are the numbers:

Betterment assets under management $22 billion
Betterment brokerage accounts number 400,000

Betterment is the largest robo-advisor by both total client assets under management and number of accounts.


Betterment and Competitors


Broker Review Promotion
Offer
Stock/ETF
Commission
Mutual Fund
Commission
Maintenance
Fee
Annual IRA
Fee
M1 Finance $30 bonus for funding account with $1,000. Transfer account to get up to $3,500 bonus. $0 na $0 $0
Ally Advisors $0 Advisory Fees at Ally Invest Cash-Enhanced Managed Portfolio! $0 $0 $0 $0
TD Ameritrade $0 commissions + transfer fee reimbursement. $0 $49.99 $0 $0
Betterment na na na 0.25% 0.25%


Robo-Advisors Versus a Regular Brokerage Account


Most investors today still use a regular brokerage account instead of the newer robo-advisory service. Let's take a detailed look at the account options currently available and try to determine what the advantages and disadvantages are of each.


Similarities


Whether a securities account is managed by a computer program or a human advisor, the funds in the account will be protected by the SIPC. This is the brokerage world's version of the FDIC. While the SIPC is funded by its member brokerage firms, it is Congressionally mandated. The program provides a maximum of $500,000 of insurance for a trading account. Of this amount, up to $250,000 can be cash balances.

Many robo-advisory accounts are now offered by the same companies that also offer retirement and non-retirement brokerage accounts. These firms include Fidelity, TD Ameritrade, Schwab, and E*Trade. The customer service for both types of accounts will generally come from the same people, although robo-account holders occasionally have access to a specialized investment team.

Both the managed brokerage account and the robo-account obviously provide investment decisions, which removes the burden from the account owner. Nevertheless, there are significant differences between these two.


Robo-Advisors vs Brokerage Account: Differences


A regular managed brokerage account is monitored by an actual human being who makes trading decisions on behalf of the investor. A robo-account, on the other hand, is managed by a computer program that buys and sells based on a questionnaire that the investor fills out. Many investors, of course, are a little bit suspicious of the new computerized system because a piece of software is making important trading decisions, involving what may be someone's life savings.

And the non-managed account obviously has no guidance at all. Investors must make their own financial decisions based on their individual research and knowledge. This is probably where the robo-account and non-managed brokerage account differ the most.

Many computerized investment services charge nothing when the software program decides to buy or sell a security. This is a significant advantage over the self-directed and managed brokerage options. Self-directed accounts of course charge for each trade, and most managed accounts also charge commissions. The difference in trading fees could make the robo account cheaper by hundreds or maybe thousands of dollars over the long term.

Furthermore, the computer-managed account usually has a lower investment advisory fee compared to the human-managed brokerage account. Most robo accounts cost less than 50 basis points per year, while the old fashioned method might be two or even five times as expensive.


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Computerized Management vs Self-directed Accounts


The majority of automated-advisory services trade only low-cost index ETF's. Other securities, including stocks and mutual funds, aren't available in most robo accounts. Other financial instruments, such as fixed-income, forex, and futures certainly won't be found in a computerized account, at least not anytime in the near future.

One of the advantages of a regular brokerage account is that many of these products are available. Even the non-security financial products such as forex and futures can be traded with certain brokers, such as E*Trade and Ally Invest.

Of course, taking the robot out of the equation leaves just the account owner, who often is an amateur investor. This scenario seems to take on more risk, as the home gamer has to make more financial decisions with a minimal amount of training and research.

The software program, on the other hand, has been written to analyze customer responses to a variety of questions in order to determine the appropriate amount of risk that should be in a portfolio. The software knows beforehand how much risk is in the exchange-traded funds that appear in its arsenal. It then simply needs to gauge the level of risk that a particular investor can handle, and assign the right ETF's to the client.

Despite the theoretical simplicity, robo-advisors are new, and there hasn't been a lot of time to fully evaluate their effectiveness. While they have the ability to take a lot of the effort and time needed to manage an account from the individual investor, there could also be unknown hazards of software programs in the years ahead.


Robo Advisor vs Regular Brokerage