Assertion Not checkable as stated
Stein: Betterment's Tax Management Saves Clients More Than Platform Fees
“We tax manage for you to save you more than you even pay us in fees. In taxes, we give you net positive returns on your investment with us”
Disclosure
Jon Stein: I do not want to leave my children an inheritance
“They'll probably someday accuse me of wrongdoing for saying this, but I don't want them to have an inheritance. I don't want to set them up where they don't have to work, because I think work is part of happiness.”
Insight
Stein: Managing Personal Investments Is Nearly Impossible for Everyday Savers
“If it was that hard for me, ah, someone who's had all the benefits of, you know, ah, business school, and a degree in economics, and a CFA, and all of these, like, and working in the industry, wow, it must be impossible for the average person to manage their m…”
Opinion
Stein: Banks and Brokers Earn Bad Reputations by Pushing Manufactured Products
“I didn't want to be a bank. I didn't want to be A broker. I didn't want to be any of those things, because I think they all have bad reputations for a reason. They're manufacturing product and selling product.”
Assertion Supported
Stein: Financial Advisor Discovery Still Runs on Referrals, Not Data
“Today, financial advisor discovery
Still runs on referrals, not data.”
Insight
Founders Should Master One Growth Channel at a Time Before Expanding
“I've seen firsthand at Betterment and at other companies that I've advised over the years, how too many simultaneous growth paths can dilute focus, even if they're all promising and maybe they're all things you want to do in the long run. I think that you can …”
Insight
Craft Businesses Must Target 80% Profit Margins to Safely Fund Expansion
“A general rule of thumb that I'd love to see is, is 80% might be profit. 20% might be cost of goods, right? So if you think about what you'd have to do to your prices to get there, then you would have room to rent space and hire people and expand confidently.”
Insight
B2B Sales Provide Repeatable Scaling When D2C Marketing Efficiency Caps Out
“Focus doesn't mean exclusivity. So we still market direct to consumer at Betterment. That's a lot of the brand origin story. That's where we came from. It's, and we built around that customer. But our marketing dollars, there's only so many dollars we can spen…”
Assertion Not checkable as stated
Stein: Only 2% more Betterment users withdrew funds in March 2020
“Among all of our customers, only two percent more customers withdrew in March than did in a normal month for us, and by far more customers were depositing the withdrawing”
Assertion Not checkable as stated
Stein: 26% more Betterment users made ad hoc deposits during crash
“26% more of our total customer base was depositing ad hoc, not just auto deposit, but actually actively putting more money in than pulling money out.”
Assertion Not checkable as stated
Stein: 37% more millennial Betterment users deposited than withdrew
“For millennials, the most interesting thing is that for millennials, it was 37% more were putting ad hoc money in than withdrawing.”
Assertion Not publicly verifiable
Stein: Older Betterment investors were more likely to panic-withdraw than youth
“For investors who are closer to retirement, we're recommending more conservative portfolios. We're putting them into more cash. We're putting them into more bonds that are less volatile in times like these. And nevertheless, they're more likely to withdraw tha…”
Opinion
Stein: Vanguard offered great funds in the mid-2000s but had terrible UI
“Then I looked at investing, and I had a Vanguard account, and another company I have tremendous respect for I had you know, some great Vanguard mutual funds, but the interface was terrible. The experience was just not keeping up”
Disclosure
Stein: Betterment's Target Customer Makes Over $100,000
“We think of our target customer as being someone who's making over a 100,000 dollars. That means they're a professional.”
Assertion Not checkable as stated
Stein: Robo-advisors founded after 2008–2009 stayed tiny or were acquired
“There were a couple other competitors that started at that time that still exist. Everyone who started since is either really tiny or has been acquired or this or that.”
Insight
Stein: Never Fully Script a Pitch or Major Speech
“I've written and scripted the entire thing, which I would never do again and would not recommend. Never script a speech like this”
Disclosure
Stein: Early Betterment employees took salary cuts and contributed capital for payroll
“And by the way, in that time, we're asking our employees to reduce their salaries and even contribute capital. To buy more equity, to pay themselves. So we were buying time as best we could until we could raise some capital.”
Assertion Not checkable as stated
Stein: Betterment co-founders agreed to reduce their initial equal 33% equity stakes
“I had to come back to them and say, I don't think we did this right, and I want to renegotiate our split here. And that was tough, but you know, ultimately they were they agreed that that, that they should take smaller shares.”
Assertion Supported
Stein: Betterment clients hold Vanguard funds, making Vanguard a partner
“Anyone who's invested with us is also getting some Vanguard funds. So in a sense, we're partners with them.”
Assertion Supported
Betterment Manages Over $60 Billion for More Than One Million Americans
“That's right. Even, even more than that today. And we manage money for over a million Americans.”
Assertion Supported
Harden Furniture Went Bankrupt Due to Debt and Foreign Competition
“The company doesn't exist anymore. My family furniture company, partly because they took on debt and partly it was due to foreign competition. But ultimately, you know, went, went under they couldn't service the debt payments.”
Prediction Not checkable as stated
Rising Import Costs Will Allow Custom Woodworkers to Profitably Raise Prices
“The prices of goods from abroad are going up. So I'm optimistic that Mike's going to be able to raise his prices and find a path.”
Assertion Supported
Betterment survey: 33% of Gen Z lost jobs to COVID vs 8% Boomers
“In our survey of millennials, I think it was 33% of Gen Z lost jobs in our survey due to COVID versus only about eight percent of the baby boomers had lost jobs.”
Disclosure
Stein: 40% of Betterment users invested stimulus checks; only 15% spent them
“We're seeing another 40% put it into long-term retirement savings, things like an IRA, Or a four Oh one K and actually the smallest minority, maybe it's maybe it's 15% is putting putting that money toward say an immediate spending need.”
