So Money - Episode 225

Jon Stein

CEO of Betterment

In my Ask Farnoosh episodes I received a number of questions from you about financial advisors: How do I know if I’m ready to work with one? How much do they cost? Is it worth it?

I also receive a number of questions about the growing market of “robo advisers” or online advisors that offer more affordable financial planning. You don’t get to meet with an advisor one-on-one but you receive a virtual plan that addresses your goal. And many people are participating. Still many are not sure if this is right for them.

That’s why I’ve invited today’s guest…co-founder and CEO of Betterment, Jon Stein.  Betterment launched in 2008 and is, as the company says, “a smarter automated investing service that provides optimized investment returns for individual, IRA, Roth IRA & rollover 401(k) accounts… Through diversification, automated rebalancing, better behavior, and lower fees, Betterment customers can expect 4.30% higher returns than a typical DIY investor.” The company also practices automation and passive investing. It’s free to sign up and as your account  balance grows, so does your monthly fee…But it is significantly cheaper than a traditional account fee.

Back to Jon, he comes from a background in financial services and is a graduate of Harvard University and the Columbia Business School.  In addition to holding Series 7, 24 and 63, he is a CFA charterholder.

Three takeaways from our interview today include:

  • Why Betterment? Why not work with a financial advisor one-on-one?
  • What the naysayers say about the robo-advising?
  • Jon’s biggest money mistake…it involved Enron. Remember Enron?

If you would like to learn more visit or follow Jon on Twitter @jonstein.

One of my favorite quotes from our interview: “Invest early, as early as you can and automate as much as you can.” – Click to Tweet

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