Hi, I’m Gerri Willis from the Fox Business Network and host of the podcast, Rich Is Not a Four-Letter Word. Today, we’re talking to Jonathan Stein, the founder and CEO of Betterment, an online service that automates investing. Some folks call Jonathan’s business a robo-advisor. But as you are about to find out, his business does much more than that.

Here are the takeaways:

  • Betterment automates investing using an online interface that allows investors to make their own choices. This new age brokerage has no account minimums and charges a quarter of a basis point in fees. In other words, if you kept $100 at Betterment, you’d be charged a quarter for the privilege.
  • These days, though, Betterment is doing more than just offering low costs, providing users with financial advice developed for their specific situation from certified financial planners.
  • The key to Betterment’s business model is that it removes the conflict that was at the heart of many of the brokers’ businesses. Advisors were paid commissions for selling product, setting up a situation where commissions could drive advice. Stein says he has solved that problem by putting advisors on salary, freeing them up to recommend whatever makes sense to customers.
  • Stein says that too many Americans are still shy of investing in the wake of the financial crisis ten years ago. In a survey conducted by betterment, two-thirds of folks said they were investing less now than before the crash. In the interim, stocks have embarked on the longest-running bull market in history and those that stayed home, well, they’ve missed out.

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