Betterment Aims To Make Investing 'Really Easy' With New Feature

Betterment, an award-winning robo advisor, has unveiled a new feature to improve the way its members use their money.

"We make it really easy for customers to invest," Matt Salefski, a product manager at Betterment, told Benzinga. "We try to take a lot of the menial tasks out of investing."

Betterment can automatically pour users' money into "a portfolio of globally diversified ETFs." Customers can allocate their funds in any way they choose.

"When you invest with us and need that money back, there will definitely be tax consequences -- long-term capital gains, short-term capital gains," said Salefski. "And when you do make that transaction, we want to make sure we're only selling the securities in the most tax efficient way possible. We have a lot of automation around minimizing tax consequences from investing."

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Smart Investing

Betterment's newest feature is called SmartDeposit.

"We were hearing about these issues customers were having," Salefski explained. "They don't have time to invest, they don't want to think about it [and] they don't know what to do. We tried to remove all friction from investing so that all a customer has to worry about is, 'Do I have this particular feature set up?' That's it."

Users start by telling Betterment how much money they need to have in a bank account at any given time, followed by how much money they want to invest.

"You then tell us how much we invest each time," Salefski added. "At least once a week we say, 'Alright, this customer said they need at least $5,000 in their bank account and we see they have $6,000 and they only wanted to invest $500 at a time. So we're only going to invest $500 for them.'"

The investment amount cannot exceed $1,000 until more money is deposited into the bank account or until the minimum daily balance is adjusted. Thus, if the investment option is changed to $3,000 but the balance is still $6,000 and the $5,000 minimum remains, Betterment will not invest more than $1,000.

Always On - If You Want It To Be

Betterment users don't have to worry about unwanted investments while they're away on vacation.

"We want to make it as easy as possible," said Salefski. "We'll send an email and say, 'Hey, we want to deposit this amount of money tomorrow based on what we have calculated in your bank balance. If you want to skip it, click this button.'"

Salefski said this makes it "really easy to skip" unwanted investments.

"When you click this button, there's no need to login to your Betterment account," he concluded. "On the mobile app side, we make it really easy to just turn it off completely. We wanted to make sure that customers had [options] wherever they were."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

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Posted In: StartupsExclusivesTechBettermentMatt SalefskiSmartDeposit
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