How digital are we really? A look at parallel market places and what they are doing better…?

Noam Stiekema

During a considerable amount of wandering around New York City recently, FinanceFeeds came across quite a few advertisements for various online trading entities. Interestingly enough most of these adverts were actually mounted on the roofs of taxi cabs. A few prominent names were present, but one that really enticed further investigation was Betterment. From memory, […]

Betterment_Office

During a considerable amount of wandering around New York City recently, FinanceFeeds came across quite a few advertisements for various online trading entities. Interestingly enough most of these adverts were actually mounted on the roofs of taxi cabs.

A few prominent names were present, but one that really enticed further investigation was Betterment. From memory, the advertisement was as simple as “Betterment. Investing made better” or similar. FinanceFeeds executive Noam Stiekema decided to find out more.

Googling and finding the Betterment website was quite the surprise and was better than expected, a whole lot better! A fresh concept that feels almost familiar. What a cool idea this is. The more I looked into their offering and presentation of the brand as a whole the more it made perfect sense. Clean, easy, better investment for all.

Jon Stein CEO & Co-Founder Betterment
Jon Stein CEO & Co-Founder Betterment

What the company offers

Betterment in a nutshell offers a variety of funds/ plans to invest in. The core platform allows customers to scan the various funds, choose how much to invest and follow transparently exactly what is going on with their monies on the fly.

Albeit, an almost familiar concept, Betterment has certainly shown how, in the company’s own words; “do it better”.

Simple and executed beautifully from a UX (user experience) and branding perspective, yet as serious as it gets with just shy of $4 billion in assets under management and answering to one of the toughest and strictest regulatory bodies in the world.

What are they doing so differently, so right?

Noam Stiekema sat down with the CEO & Co-Founder at Betterment, Jon Stein; to find out more.

In terms of how Betterment came about, Mr. Stein explained to Noam Stiekema; “Having spent many years as a consultant in banks, how we invest was something I always had in mind. Just like other new investors out there I was making mistakes and thought there must be a better way. We decided to build something different to help others like myself.”

Eli Broverman COO & Co-Founder Betterment
Eli Broverman COO & Co-Founder Betterment

“So we set out to build Betterment” continued Mr. Stein. “During the process I received a lot of feedback from friends and investors alike and the majority said that it was too simple and felt it should be a little more complicated as this is what was expected from financial services which include large corporates, established investment channels and complicated investing”.

“We knew that for this to work it had to be simple to use. The Betterment core is simple, setup is simple, investors get on a plan and stay the course”.

The subject of first impressions is always a key point of importance in online and digital businesses, and Betterment’s first impression sells simplicity and ease of use allowing the company to target a wider retail audience, largely consisting of mum and dad investors. Asking what made Betterment decide to take this route, Mr. Stiekema sought to find out if, looking back, this the right thing to do.

“We always targeted investors that would be comfortable managing monies online” explained Mr. Stein. “The ethos was to concentrate on thinking about what we would mainly want for ourselves in a product range and offering. This was something we had in mind from day one and part of the reason we founded Betterment.”

Betterment's uber modern open plan offices on 61 W. 23rd Street in New York.
Betterment’s uber modern open plan offices on 61 W. 23rd Street in New York.

“The principle was to create a simple and easy to use investment platform that people can feel in total control. Abeit, simple and easy to use on the surface, the technology behind Betterment’s core has extensive research and development behind it” enthused Mr. Stein.

“Moreover, a lot of development and thought has gone into providing other financial planners to utilize the platform for their own customers.”

Betterment marries technology and investing beautifully, and therefore it is interesting to ascertain whether Betterment positions itself as more of a technology provider rather than a brokerage that utilizes technology extensively.

“Technology is at the core of what we do and we see ourselves as a customer centric financial service provider”.

The growth of the company has been substantial since start up, and Mr. Stein was keen to share what can be expected from Betterment in the coming years.

“We continue to fine tune and develop our offerings and technology with A/B split testing improving on our core experience. We are also devoting time and resources to our institutional offerings to better serve other institutions using our platform such as financial planners”.

“We also unveiled four or five new offerings such as aggregated retirement plans and smart deposit whereby your Betterment account is linked to your banking account and any extra fund in your account can be quickly moved directly into your Betterment account.”

Betterment
The Betterment team, young, driven and in t-shirts!

With a smile, noting the different culture that often separates traditional banking from fintech, Mr. Stiekema asked “Suits and ties, or t-shirts and jeans?”

“Ha, mostly t-shirts and jeans” said Mr. Stein convivially. “I am often the one turning up dressed more formally due to commitments such as meetings and interviews, however, usually you will find me with a button up shirt.”

Albeit, an almost familiar concept, Betterment has certainly shown how, in the company’s own words; to “do it better”. FinanceFeeds observes that one can only ask why has this not been done to such a level in the FX industry at this juncture. A quick Google search of FX managed funds and you are instantly bombarded with offerings, some of which have questionable provenance.

Social trading environments work on an almost similar principle allowing investors to follow the best traders. However, actual investment plans that can be viewed, tracked and invested in transparently; are few and far between.

Top this off with a strong regulatory environment and companies like Betterment focusing on marrying tech and change and you have a recipe for success.

Whilst innovation is abundant within the FX and CFD trading scene both on the retail, institutional and FinTech side, simplicity in Betterment’s offering at this scale, we have yet to see.

Read this next

Digital Assets

BlackRock digs further into crypto with metaverse ETF

BlackRock, the world’s largest asset manager with almost $10 trillion in AUM, is set to launch a new metaverse ETF to help investors securely monetize on the booming immersive version of the internet.

Digital Assets

Binance wins license in New Zealand as rival Huobi shutters derivatives

Binance, the world’s largest crypto exchange by traded volume, has obtained licenses to operate in New Zealand, even after rival Huobi shutdown derivatives trading last month due to concerns about regulations.

Retail FX

Hong Kong busts perpetrators of ‘ramp and dump’ scam

Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has charged thirteen suspects of market manipulation in a joint operation with the local police.

Institutional FX

TradingView integrates market data from German Tradegate exchange

TradingView announced that it ‎has increased data coverage to allow its users to receive information from ‎and get free access to the intra-day and tick data from Tradegate Exchange.

Retail FX

Spotware Systems introduces Custom Push Notifications for cTrader mobile apps

Spotware Systems, a technology provider for the electronic trading industry, is introducing a new push notification feature to alert mobile users of price swings and market fluctuations through their cTrader app.

Market News

The Week Ahead: 30 September from David Madden, Market Analyst at Equiti Group

Sterling dominated the headlines last week, as there were concerns the UK government might struggle to service its debt.

Inside View

How does the quality of signal providers affect your business?

A must-have onboarding process for brokers with investment services like PAMM, MAM, or copy trading

Technology

DBS deploys Nasdaq Trade Surveillance

“The confidence that markets and our clients have in DBS as a safe and trusted banking group is anchored on our ability to detect and respond to anomalous activity, which in turn calls for a robust surveillance and prevention infrastructure.”

Industry News

SEC charges Justin Costello and David Ferraro for securities fraud and posing as billionaire veteran

The Securities and Exchange Commission charged Cannabis executive Justin Costello and David Ferraro, an associate of Costello’s, for promoting the stock of several microcap companies on social media without disclosing their own simultaneous stock sales as market prices rose.

<