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Betterment Expands Customization Options on Model Portfolios for FAs

By Alex Padalka February 17, 2021

Betterment says that it now offers model portfolios for financial advisors with more customization than the firm’s previously available options.

The firm’s custom model portfolios, available for a minimum of $2.5 million in client assets, allow advisors to build them from any exchange-traded funds as long as they have sufficient liquidity and trading volume, Betterment announced last week. The previous offering, Flexible Portfolios, only allowed customization with ETFs that are part of the Betterment Core Portfolio Strategy, the company says.

In addition, custom model portfolios offer tax-efficient automation, such as through tax loss harvesting, the company says.

Each customer portfolio can have up to 101 asset allocations and comes with automated rebalancing, tax optimized sales for withdrawals, glide path rebalancing and more, Betterment says.

Model portfolios have become increasingly popular with financial advisors. In all, assets held in model portfolios reached a record $4.1 trillion by September 2020, up from $3.5 trillion at the end of 2019 — with close to 30% of fund assets managed through financial advisors and brokerages in the U.S., data provider Broadridge Financial Solutions reported in December. Merrill Lynch, as well as Charles Schwab and Fidelity, have all recently expanded their model portfolio options.

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Tags:  Investment strategies , Portfolio management , Broadridge Financial Solutions , Charles Schwab , Fidelity , Merrill Lynch , Betterment

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