Betterment: Make your financial life better.

Transcription

1 Betterment: Make your financial life better.

2 The Opportunity The Betterment Approach The Future 2

3 The Opportunity The Betterment Approach The Future 3

4 This is a unique moment in the history of financial services Early investing popularity Rise of the mutual fund era ACCESS TO INFORMATION AND TECHNOLOGY Discount trading era 2010 Automated advice era s First open-end mutual fund established 1934 Securities and Exchange Commission established Fidelity reaches $1B AUM Discount brokers and index funds are born (k)s introduced st Internet stock trade completed 1 st Consumer ETF and Target Date Fund launched 1 st Automated financial advice service 4

5 Individuals are increasingly responsible for their financial health, and they are looking for advice. Participants covered by plan type Defined Benefit Plans 69% Defined Contribution Plans 7% Investors want advice but advice is expensive if you can even access it. 83% of plan participants want advice $10,000 average annual cost/ client for fiduciary advice 0.2% mass market with fiduciary advisors 5

6 There is a massive opportunity to capture the transformation of investment advice and delivery. Assets by household wealth Net Investable Assets per HH: Households by wealth Net Investable Assets per HH: Traditional Advisor Targets $10mm+ $2 - $10mm Traditional Advisor Targets $10mm+ $2 - $10mm <$2mm <$2mm Opportunity $28T 85% of assets Opportunity 118 mm 99% of households Sources: Cerulli: U.S. Retail Investor Advice Relationships 2014; State of U.S. Retail and Institutional Asset Management

7 The Opportunity The Betterment Approach The Future 7

8 Betterment is the largest and fastest-growing digital advisor. 8

9 Betterment has more customers than all robo-advisors. Number of Customers Source: Wealthfront and Personal Capital data from SEC Form ADV filings dated July 1, SIP customers derived from FinancialPlanning article dated June 17; VPAS figures from industry sources. 9

10 Unique in the industry, Betterment starts with goal-based investing. 10

11 We help customers understand how much to save and keep them on track. 11

12 Account aggregation, with the context of your full financial picture, powers holistic advice. 12

13 We significantly shift customers behaviors, for example by surfacing key tax data, at the right moment. Tax impact preview has prevented 75% of tax-costly transactions, curbing behaviors that lead to long-term underperformance 13

14 We have extended our advice to independent advisors and employerbased retirement assets. $5T Direct Market $2.5T (RIA) Market $5T 401(k) Market Self-Directed Customers Clients Advisors Participants Plan sponsors Betterment Recordkeeping and Accounting Platform 14

15 We provide the best experience and service for our customers. 5-min Account Opening & Funding Industry s only 5-min Paperless Rollovers 5-star Mobile Apps Award-Winning Service

16 As we scale, our data driven advice creates a flywheel and strong network effects. 16

17 Competition has validated the robo-advisory model and accelerated Betterment s growth Betterment sets a new vision for investment management Incumbent asset managers and banks build, buy, or partner Future Market will continue to consolidate. BETTERMENT NET DEPOSITS

18 Betterment has significant advantages versus new entrants and incumbent firms. Technology Vertically-integrated platform accelerates efficient growth and enables unique products and services No legacy technology or technical debt Business Model No traditional business models to protect or risk cannibalizing (e.g., asset manufacturing and transaction-based businesses) Lower cost structure through technology and automation Regulatory Regulator-tested broker-dealer and investment advisor platform that is hard to replicate Regulatory tailwinds and support for fiduciary, aligned advice 18

19 The Opportunity The Betterment Approach The Future 19

20 Which is harder to automate? Driving Personal Finance & Planning 20

21 Betterment is building the central financial relationship of the next generation centered around holistic, personalized advice. Loans Insurance Paychecks Advice Holistic, Integrated, Aggregated Customer Data, Peer Data Payments Taxable Investments 401(k) IRA Cash Management 21

22 The robo-advisory market is poised to grow exponentially. Total U.S. consumer financial assets $34T Total non-pension financial assets $22T Citi s projection for roboadvisor market in a decade $5T Betterment today $0.005T 22

23 Betterment is best positioned to take advantage of an extraordinary opportunity. 23

24 Betterment