24 Nov Coming Soon: Changes to MyRoboAdviser Investment Models
As you know, MyRoboAdviser has partnered with Betterment for Advisers as our technology platform to deliver our proprietary 3-dimensional Endowment investment models to our clients. Betterment’s technology engine powers the goals-based advisory services, investing process, rebalancing, tax loss harvesting and other important functions to help us manage our client accounts.
We will be reducing the number of models available to meet client goals from 101 down to 6. We are making these changes because (1) Betterment’s platform has become more flexible and by making this change we will be able to make more frequent portfolio changes to the models, as needed; (2) Betterment will be more responsive to implement any portfolio changes that we request; (3) 100+ models is not necessary to accomplish the major goals most of our clients are pursuing (for example, there is little difference between a model targeting 60% stocks vs. one targeting 65% stocks); and, (4) we believe fewer models will make our offering more understandable to a greater number of people.
The six basic models will be as follows:
- Ultra Conservative-Bonds Only. Comprised solely of short-term bonds, this model is designed for shorter-term time horizons and very conservative investors.
- Endowment Conservative 3D. This model targets 15% stocks, 46% bonds and 39% Alternatives seeking to provide a conservative mix of securities in the Endowment Index® for investors with goals that are longer than near-term, but not long term.
- Endowment Conservative-Moderate 3D provides a slightly less aggressive target allocation among the holdings in the Endowment Index, targeting 20% Stocks, 37% bonds and 43% Alternatives seeking to provide a mix of growth, income and stability for intermediate-term goals
- Endowment Moderate Growth 3D model seeks to replicate the holdings and target allocations of the Endowment Index designed for longer term goals. The current target allocation for this model is 35% stocks, 12% bonds and 53% alternatives.
- Endowment Growth 3D applies a more aggressive allocation to the holdings of the Endowment Index®, emphasizing a greater allocation to stocks for longer-term investors with growth-oriented goals. The current target allocation is 41% stocks, 12% bonds, and 47% alternatives.
- Aggressive-Stocks Only. For aggressive, long-term investors, this model offers a diversified global allocation to stocks. The domestic portion of the portfolio is slanted towards value as opposed to growth.
The greatest change in our offering will be for aggressive investors, who will now be fully allocated to an all-stock portfolio that will not include any alternatives or bonds. We also will be adding additional securities to the Endowment 3D models. Earlier this year, the Endowment Index added asset class representations including global equities, natural resources, agriculture, inflation-protected bonds (TIPS) and MLPs. All our models are constructed of exchange-traded funds (ETFs).
Our advisory staff has reviewed all current client accounts to ensure that the current client goals will be met by these model changes. We have contacted those individuals who we believe should consider making changes to their goals to better match their goals with the new portfolio structure. If you have not heard from MyRoboAdviser directly, you don’t need to do anything further.
We are currently targeting the week of December 1st to implement these changes. Upon activation, Betterment will automatically rebalance accounts to the target allocations of the new model that corresponds to the current goal.
Our advisers have reviewed all client accounts and respective goals and have reached out to those clients with whom we think a change should be made prior to the implementation.
If you have any questions about holdings in your account or one of our models, or perhaps have another question about our services, you can contact us directly at 920.785.6012 or email us at [email protected] MyRoboAdviser has partnered with Betterment for Advisers as our technology solution to provide our services to our clients. Betterment maintains a support line you can also call for help with navigation, linking your accounts or other site functionality. You can call the Betterment for Advisers support line at 800.400.1571.
Disclosures: Content contained herein is presented is for informational and educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies, nor shall it be construed to be the provision of individualized investment, tax or legal advice.
My Robo Adviser is a digital investment service advised by ETF Model Solutions, LLC. Investments recommended by My Robo Adviser™ involve risk and will fluctuate in value. Unless otherwise stated, investments are not insured or guaranteed. May lose money. My Robo Adviser™ utilizes the platform and technology services of Betterment LLC, an SEC Registered Investment Adviser. Betterment provides the wrap fee program that assists us in providing our services to you. Custody and trading services for the program are provided by Betterment Securities, an SEC registered broker-dealer and member FINRA/SIPC.
My Robo Adviser’s services are specific to the investment goals that you identify. We do not provide comprehensive financial or tax planning. Our Advisory services rely upon an algorithm designed and maintained by Betterment to assist us in determining our portfolio recommendations. Unless you directly consult with My Robo Adviser™ Advisory personnel, the algorithm is the sole basis of the advice.
Clients and perspective clients should be aware that certain tools and content on the Betterment, LLC website, including projected returns, functionality, tax-coordinated portfolios and links to investment philosophy, research, educational materials and FAQs apply solely to Betterment’s 2-dimensional portfolios and may not apply to MyRoboAdviser.com’s 3-dimensional investment recommendations.
Existing My Robo Adviser™ clients are reminded to login and update personal information whenever their goals or personal financial circumstances change. Clients should also confirm that their current goal allocation is aligned with the recommended target allocation provided for each goal. Clients with questions regarding their account, personal financial circumstances, goals, or an investment allocation with respect to our service should contact us via email or telephone.
Prospective clients contemplating opening an account with My Robo Adviser™ are advised to read My Robo Adviser’s Form ADV Brochure, Part 2A for important disclosures about our services, business practices, the costs and risks of investing, and other important considerations prior to opening their account. You can access the most recent version of our Form ADV via a link on our website.
ETF Model Solutions, LLC. is registered as an investment adviser with the SEC. Registration does not imply a certain level of skill or training. If you have any questions about our professional services, please call us at 920.785.6012 or email [email protected]