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I have multiple online (robo-investing) investment accounts (ie. Wealthfront, etc). I have had money in my Betterment account for a few years. It has performed below the market and since it is in the six digits, I decided to move it early last month. I asked my local broker to do a transfer in kind to avoid tax issues, etc. Betterment will not acknowledge the paperwork. I have called and emailed so many times. Yesterday I was on hold for 2 hours and then finally got a woman on the line. I answered my security questions and she said that she didn't see the paperwork requesting transfer so she would have to transfer me. I said NO, way. I have been on hold for two hours. And by the way, I have tried several times to use the "press 2 and we will call YOU back" choice.
They never returned the call. She said for me not to worry ... that I was now on an 'in-house' line and it wouldn't be a long wait at all. After 45 minutes I hung up. I sent them one final email and said that I couldn't understand why they were holding my funds hostage. I listed the steps that I had taken and that I had spent so many hours on hold. I put it all in writing and decided that I would contact legal authorities. And that is how I was going to proceed.
Miraculously, last night, after I made it clear that I was done playing their game, they responded to my final email and admitted to receiving the transfer in kind request. So now, I have that in writing but I have zero trust for this company. Trust me - something is very amiss there. I am not in the financial world (hence my thoughts of using the robo-investing to diversify some of my investing) but I am smart enough to know that Betterment has a big problem right now. If you have money there, GET IT OUT or at least try. You have been warned.
First of all, I have multiple brokerage and investment accounts. All fairly easy to sign up for since I have good credit and good financials. Signing up with Betterment was like applying for a credit card. You have to give a lot of personal information but then you don't get instant access or response. They have to review and approve it first but that isn't very obvious from the start.
I was able to log in initially then I couldn't access my account. I try to reset the password and I can't. So I try customer service. They have no email or chat or messaging system. There is only a phone option that I could find. Phone is ONLY available during the weekday during certain hours. Ok fine. So I call and you have to wait on hold for a while (not sure if this is normal or a Covid affect). Then you speak to a rep who says they will look into and then get back to you. Ok fine. I don't hear back so I call again, wait on hold and am told that they will look into it and get back to me. Then I eventually get an email saying that my account is closed due to fraud and that this was final and can not be appealed. Ok great.
But now that I've given out all this personal information, can't the company be more forthcoming as to what the fraud is and what caused it? So I call back, this time no answer at all after waiting on hold a long time. Then I call back with a different phone number and it is answered right away. They definitely use a caller ID system and apparently don't answer specific phone numbers (maybe they block the number associated with the application). So my call is answered and all the rep said is the account was flagged but again no details. If there weren't other "professional" reviews of this company then I would think they were a scam and stealing personal information AND I still am left worried about why my account was closed.
Anyway, this was my first attempt to use a smaller financial company (vs the large brokerages like Schwab, Vanguard, etc). Maybe it would be fine after you go through all their processes. I like to be able to access and self manage and do things online. But seeing as how you actually have to call in to get anything done is irritating. This was surprising as it is a younger company but the whole experience felt very archaic and dated/old school. Not sure how the reviews are so good but maybe the experience is different once the account is up and running.
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In looking for a new bank, I I like what I read about Betterment, so I opened an account. Shortly thereafter I received a large deposit that I had been waiting for for weeks. When I was finally able to use my account, I used it for four transactions, as I was just beginning a much needed road trip. One transaction was to transfer money, the others were gas for my car, soda from a convenience store and $20 cash back. To my surprise,, I was denied getting my $20. Immediately I looked on my app to check my account and it had been locked.
I had a message asking to call customer service, and I did. I was asked to verify my identity as well as some security questions, which of course, I answered. Thinking my account would be unlocked at that point I was proceeding to hang up. The customer service representative then advised me that now I was to check my email to further verify my identity and that once that was done, my account would be unlocked in 2-3 DAYS!!!! I WAS FURIOUS! I requested to speak with a supervisor, and was denied. The customer service representative was extremely condescending, as she continued to tell me that she was sorry that I was traveling and could not access my money, but nothing could be done, and there was NO supervisor available! I hung up.
I called back three more times, and after being verified again, the phone was disconnected two of those times. The third and fourth time I called, I got the same representative that I spoke with the first time, and she already knew who I was! When was the last time you called your bank and got the same representative THREE times!? At this point I requested a supervisor again at which time I was put on hold. The same representative came back on the line, not a supervisor. She advised me that they received my documents and that everything was put on a high priority status and hopefully the verifications were done quickly so that I would not be stranded while traveling, for too long. I am seriously beside myself with anger. This is unacceptable and once this issue is resolved I will withdrawal every penny from my account and will NEVER use Betterment again!
I don't know what y'all 1-star reviewers expect from a ROBO-advisor. I opened a regular taxable investment account with them in May 2020 when the market was already on its way out of the covid hole. By January 2021 they earned me 28% of the sum of my deposits. Simple as that. I haven't tried rolling over, withdrawing or asking questions their robo customer support. Trouble withdrawing is no fun obviously but again, haven't been there, haven't don't that. And tbh when I transferred some money from a Fidelity brokerage account it took forever too. I don't know if you realize it or not but your money is not stored in cash there, it's in securities, ok? It's NOT an ATM. So it takes time to sell them, then transfer the proceeds to another firm and then buy securities there. Just google how the whole thing works before raising hell and harassing the robo customer support.
My company-sponsored health plan allows for me to opt into an HSA. Once I have enough funds in my HSA, I can then invest the funds. The company the HSA uses for investing is Betterment. I went through the process of creating my Betterment account. I provided the two forms of identification requested (picture of my driver's license and my social security card). I was told it would take several business days to verify my information.
Two days later, I was informed that they were closing my account due to confirmed fraudulent activity, and that I would not be allowed to open an account with them. No further detail was provided, and they said no amount of additional proof would change the circumstances. They currently have $152.50 of my HSA money of the initial investment I've made. I called to verify that my funds would be returned to my HSA where it was originally taken from. I was told that it would be returned but that I would need to check with the HSA company to ensure it is returned properly?
The whole ordeal has been nothing short of a disaster. I'm still a little shaken after this experience as I still have no clue why they said there was fraudulent activity and now I'm concerned my personal information and identity has been compromised. I've never experienced such incompetence in my life. At this point, I just want my funds returned to my HSA and to be done with Betterment for good. I would never recommend them to anyone. Customer service and clarity is clearly lacking. If my money is not returned to my original account, I will be forced to take legal action against this company.
In the 12 months leading up to Dec 2020 - Not one of my other accounts (stock/401k/IRA) at other institutions lost money. In fact my 401k returned 20%. But the ROBO investing at Betterment 'lost' $1000 of my $5000 I put in there to see if ROBO worked. So, as I withdraw the money and transfer it out after a year. I hope the people at Betterment take a cold hard look at the algorithms in their system and re-work them. Even if they do, I won't be back.
I can't explain it any other way. I moved away from my full-service CFP, and transferred all assets, as well as a rollover, into a Betterment IRA. I originally opted for the full package, which includes financial planning advice with a human. What a joke--a very green, uninformed individual clearly reading from a script. No thanks. Now, several years later, I need to move those funds. Betterment makes it extremely difficult/inconvenient to transfer funds. While they boastfully advertise that they accept "in-kind" roll-INS, they are not able to do so when you're moving funds OUT of Betterment. You have no control over when assets are sold, so it's completely up to chance. With a volatile market, this is not a risk I'm willing to take.
I have reached out their support team multiple times on this--they are helpless and hapless. They make it sound like it's a technology problem. It's not. It's a policy: make it as difficult as possible for people to move money out of Betterment. I will continue to do whatever I can to liberate these funds from Betterment. DO NOT USE THIS COMPANY!
I decided to stop using Betterment and instead of having a tax implication by selling, I initiated a transfer of my betterment balance to my Vanguard account, in kind. Betterment only transferred 75% of my holdings, leaving 25% in their account! My vanguard rep was perplexed by this and thought it could have been some part to do with the fractional shares, even though I had specifically authorized the entire balance including fractional shares to be sent over to VG in kind. I called to sort it out and was on hold for too long, and so decided to sell off the rest to just be done with them. (Yes tax hit, but alternative is deal with them keeping my funds and infinite back and forth?) The withdrawal into my savings account was recorded, but it said it would not post there FOR SEVEN DAYS. Read that and decide if you want to do business with a financial outfit that will tie up your money for an entire week. Inexcusable.
Do not use them. I can't believe how bad their support is. Phone calls are never answered and callbacks are not returned. Instructions on the website are not specific and emails to support are all canned responses that don't address specific issues. They do great at taking your money. They make it extremely difficult to withdraw. I wonder how many people just give up and leave money there. Whether this is their marketing approach or incompetence, I don't know. But do not use them. I can't imagine ever choosing to use them if I have the choice.
My employer set up my 401(k) with Betterment. Now I need to consolidate that account elsewhere. Betterment strives to make this impossible. Their customer service entails multi-hour hold times (initiated with a friendly message from their CEO telling you you're going to wait a looong time). Their website is a collection of dark patterns designed to fool you into transferring money INTO your Betterment account rather than out of it. And if you find the instruction for transferring out of Betterment (which they do their best to bury), you'll see that it is the other institution's responsibility to initiate this transfer, something no other institution does. In short, Betterment provides the scammiest investment solution available on the market. Literally any other would be better.
Betterment author review by Barbara Friedberg
Betterment is an automated investment service that helps consumers set and reach investment goals. The Betterment portfolios offer globally diversified investment portfolios with the greatest returns for the lowest risk levels. They offer retirement and traditional investment brokerage accounts.
Easy sign-up process: The sign-up takes an average of five minutes and begins with three simple questions; age, retired or not, and annual income.
Goal based investing: The investor selects/prioritizes one or all three goals; safety net, retirement and/or general investing. Every choice concludes with links to additional information.
Optimized portfolio: The company optimizes their exchange traded fund (ETF) investment portfolios based upon modern portfolio research and offers the greatest returns for the investors indicated risk tolerance level.
Low fees: Consumers can start with as little as a $100 monthly auto-deposit. The fee structure begins at 0.35 percent for the auto-deposit of $100 per month until the account value reaches $10,000. The AUM fee drops to 0.25 percent for accounts valued between $10,001 and $99,999. All accounts over $100,000 pay 0.15 percent management fee.
Special highlights: The RetirementGuide Calculator tool indicates how much the user must save to meet their retirement spending goals. The SmartDeposit feature automatically transfers excess bank account funds into the Betterment account.
Portfolio features: Wealthfront offers portfolio rebalancing, tax efficient exchange traded portfolios and tax-loss harvesting.
No outside accounts: All assets are held by the Betterment portfolio custodian and must be transferred to the firm.
Betterment questions and answers
- What’s the most common misconception consumers have about your industry?
- Most people have the misconception that investing has to be complicated and confusing. It makes sense that people would feel that way because, historically, traditional financial services have not offered elegant and easy-to-use platforms for managing investments. Now, utilizing intuitive design and automated tools, Betterment has created a smarter investing experience that has been designed to help provide customers with the best-expected net investor returns for retirement planning, building wealth, and other savings goals.
- How has your industry changed in the last 5 to 10 years?
- Automated investment services, which offer sophisticated ways to simplify and automate your portfolio and investing strategy, are engineering an inevitable transformation of the entire financial landscape. Why? New technology helps disrupt and streamline stale, inefficient models, rewarding customers with better, smarter solutions.
The creation and popularity of index-tracking ETFs have been essential to our success as an automated investment service, as is cloud-computing, like Amazon Web Services. ETFs allow us to put together incredibly low-cost, liquid portfolios and improve tax efficiency—while cloud-computing allows our engineers to build, model, and test new trading platforms in cost- and time-efficient ways.
All of these benefits are then passed on to customers through lower costs, optimized investment vehicles, and a seamless user experience. This is the new era for investing that improves the way all Americans can grow their money—and increases the likelihood that they will not only reach their financial goals, but also be happier because they can spend more time doing the things they enjoy.
- What problem is Betterment trying to solve?
- At Betterment, we’re helping people answer the question: “What should I do with my money?” Our pursuit is to create the perfect automated investing service, helping people to better manage, protect, and grow their wealth through smarter technology. We are building on prior innovation and applying technology in new ways to change the way people manage their money so they ultimately have better outcomes. We start from a place of alignment with the customer and then ask, “How can we use technology to improve his or her experience?” Through smart technology, design and customer experience, we work with individuals to better address their investing needs.
- What sets Betterment apart from the competition
- Betterment is unique in that it handles every part of the investment process, allowing us to provide a better experience for customers.
- What needs Betterment fulfill, and how do you fulfill those needs better than your competition?
- Betterment offers a smarter investing experience.
Better Returns: The Betterment portfolio is designed to achieve optimal returns at every level of risk. Through diversification, automated rebalancing, better behavior, and lower fees, Betterment customers can expect 4.30% higher returns than a typical DIY investor.
Customized Portfolio Allocations: Each investment portfolio is designed to get customers optimal investor returns. Our goal-based investing framework and advice algorithm let customers know if they are on track to reach their investment goals, like retirement or a safety net fund.
Automation and Passive Investing: We recommend a globally diversified, passive portfolio of 12 asset classes, tailored for our customers’ risk and time horizon. Years of research and Nobel Prize-winning Modern Portfolio Theory are the foundation of our investment method.
Tax-Efficient Investing: We are built from the ground up to handle every dollar of our customers’ money tax‑efficiently.
Retirement Income: We use technology, investment expertise, and a fresh take on withdrawal methodology to provide sustainable cash flow while our customers enjoy retirement.
Trust Accounts: Betterment customers can create multiple goals—such as growing wealth, saving for education, or distributing income—tailored to each beneficiary.
- How does Betterment measure success?
- To measure the success of our company, we track a variety of metrics but especially look at assets under management, the number of customers using Betterment, and customer satisfaction.
- What is something you wish every consumer knew about Betterment?
- It’s easy to get started with Betterment, and our customer experience team is here to serve you 7 days a week.
- Has your business received any rewards or recognition for its products or services that your customers would like to know about?
- Betterment is a CNBC Disruptor 50 and Webby award winner and has been featured in the New York Times, Forbes, Wall Street Journal, CNNMoney, TechCrunch, Bloomberg, NBC, and Lifehacker, among other news outlets.
- How has Betterment grown or evolved?
- Betterment is the largest, fastest-growing automated investing service, with more than 50,000 customers and more than $1 billion in assets under management. We’ve doubled our customer base in the last year alone (learn more at https://www.betterment.com/)
We have also implemented a variety of new features:
Tax Loss Harvesting+, TaxMin, and Tax Impact Preview
Improved Portfolio with Municipal Bonds
Better Mobile Apps (with touch ID and portfolio view)
Betterment Company Information
- Company Name:
- 61 W. 23rd Street, 5th Floor
- New York
- Postal Code:
- United States
- (888) 428‑9482
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