{"id":10854,"date":"2020-02-11T17:22:27","date_gmt":"2020-02-11T22:22:27","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/betterment-on-disrupting-the-financial-service-industry\/"},"modified":"2020-02-11T17:50:02","modified_gmt":"2020-02-11T22:50:02","slug":"betterment-on-disrupting-the-financial-service-industry","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/betterment-on-disrupting-the-financial-service-industry\/","title":{"rendered":"Betterment on disrupting the financial service industry"},"content":{"rendered":"

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Unlike the disruption that we have seen in the retail space with Amazon, transportation with Uber, and movie industry with Netlflix, there isn\u2019t a single tech firm leading the future of financial services. Betterment hopes to play that role.<\/p>\n

Betterment is a \u201crobo-advisor\u201d that provides automated and goal-based investment advice to retail investors. It offers clients the opportunity to consolidate their investment portfolio in one platform. Betterment value proposition can best be explained with self-driving cars. Just like customers with self-driving cars do not need to bother about how they get to their destination, Betterment hopes to help clients achieve their objective of reaching a financial objective. Betterment seeks to relieve the burden of retail investors managing their assets to achieve a future obligation.<\/p>\n

Betterment is leveraging technology to offer its services. It uses an algorithm to offer investment advice to customers and helps clients consummate these transactions to build their portfolio. This offers new opportunities for individuals by raising the efficiency of completing everyday tasks. Stein, the CEO of Betterment, explains that technology has made investment advisers like Betterment essential to everyday retail investors. \u201cThe world is becoming more and more complex,\u201d says Stein. \u201cNow, if you\u2019re a trader in the markets, you\u2019re up against all kinds of algorithms on the other side, and who-knows-what-technology the big funds and investment houses have\u2026\u201d We believe everyone should have the best technology – every retail investor, every mom and pop, should have the best technology, helping them make the most of their money, and so we\u2019re applying that. We believe the future is far more advised as a result, than it has been.\u201d<\/p>\n

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Prior to Betterment, it was expensive for retail investors who didn\u2019t have a lot of money to obtain financial advice. Betterment is therefore democratizing access to financial advice and allowing its retail clients to compete favorable in the market.<\/p>\n

The robo-advising has a variety of benefits over traditional wealth management:<\/p>\n