Betterment is expanding access to its team of real, live, flesh-and-blood financial professionals with a service that many traditional wealth managers have been slow to embrace.
The New York City–based digital advisor, which now manages $9.7 billion in assets from 280,000 clients, added a new feature to its mobile app on Thursday that allows users to send secure text messages to Betterment’s team of financial advisors. Betterment says users can ask any question, any day or time, and expect a response from a human advisor within one business day (questions asked late at night or on weekends will get responses during normal business hours). A spokesperson for the company said no messages would be automatically generated.
Betterment is also tweaking its fee structure by consolidating its “plus” plan, which has provided a single annual call to a Certified Financial Planner for 40 basis points, and its “premium” plan, which has cost 50 bps for unlimited calls. Now there is just a digital-only service for 25 bps, and a single premium service that allows unlimited calls to advisors for 40 bps. The new text-messaging feature is available as part of both service plans at no additional cost.
“Giving all customers the ability to connect with our experts through our app is a natural extension of this year’s announcement of access to CFP professionals and licensed experts, and meets the needs of a growing, increasingly diverse customer base that wants more flexibility,” said Alex Benke, Betterment’s vice president of financial advice and investing, in a statement.
Betterment introduced its team of CFPs in January and has since overhauled its branding and marketing strategy to appeal to wealthier investors. Now the company offers a service that the wealthiest investors demand, but few firms can offer.
According to a report by MyPrivateBanking Research analyst Roxana Palade, wealth management firms who cater to ultra-high-net-worth investors (with at least $25 million in investable assets) are largely failing to provide the digital services that these clients expect. The report found that the area where these firms are weakest is in providing "VIP-level service" via dedicated instant-communication tools or secure messaging platforms.
“While encrypted instant messaging has become a commonplace communication tool, rollout of this feature among UHNW wealth managers has been very slow,” Palade wrote in the report.
Palade recommends that firms build more functions into their apps to retain their UHNW business: “Ultra-wealthy clients tend to look for features like electronic data vaults and instant messaging, which amps up the convenience benefit of an app.”
It isn’t just the super-rich. In a recent Salesforce study, investors across age and wealth demographics named accessibility as a top reason for picking a financial advisor, second only to trustworthiness. They also said they would like to collaborate more with their advisor, but most only communicate with an advisor once per quarter.