The battle between advisors and apps for di-it-yourselfers escalated, with Betterment, an app for investors, declaring in a headline that "Financial Advisors Are Bad For Your Wealth."
The Betterment post
cites a study by the National Bureau of Economic Research, saying it found that many advisors reinforce harmful behavior because it’s in their best interest to do so. Motivated by larger commissions, the advisor/brokers encouraged bad investing behavior like frequent trades and higher-fee funds.
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Betterment is not doing itself any favors. Instead of helping investors, it's scaring them. Perhaps the company is desperate for clients.
While some investors may be okay with a simple DIY service like Betterment, people with real wealth issues -- estate planning, tax issues, and portfolios diversified across private deals and business ventures as well as securities portfolios -- need professional advice. And many others simply don't want the burden of doing it themselves.
Moreover, tarring an entire profession for taking excessive fees is just plain dumb. Betterment acts as if all advisors are evil, which is about as silly as saying all DIY apps for investors steer them into bad portfolio decisions.
However, advisors need to take note of the marketing spin, which is why it is worth mentioning.