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Client Agreement Automation

Everything you need to know about this great feature. Scroll down to learn more and read our legal disclosures.

By Betterment Editors

Published Jan. 01, 2021 | Updated Sep. 23, 2022

Client Agreement Automation Sep 23, 2022 12:00:00 AM Everything you need to know about this great feature. Scroll down to learn more and read our legal disclosures. The Betterment for Advisors Client Agreement Automation function will make onboarding your new clients fast, easy, and completely paperless. By permitting your clients to execute your firm’s advisory agreement as part of the white-labeled Betterment for Advisors signup experience, you automate a manual process, giving you more time to focus on your business while providing your clients with a better experience. How to Get Started To get started, have a firm admin navigate to the Agreements page to upload the following documents: a PDF of the advisory agreement between your firm and your clients, signed by an authorized party at your firm a PDF of your firm’s Form ADV Part 2A a PDF of the advisor’s relevant Form ADV Part 2B, if applicable (see below) a PDF of your firm’s Form CRS a PDF of your firm’s privacy policy Note that an executed advisory agreement is required to use the Client Agreement Automation function, but the Form ADV Part 2A, Form CRS, and Privacy Policy are all optional. Any advisor may upload their ADV Part 2B, independent of the presence of firm-level documents. About the Client Agreement Automation Function The Client Agreement Automation function gives you the option to have your clients electronically execute your firm’s advisory agreement as part of the white-labeled onboarding experience. It also will permit you to provide your Form ADV Part 2A, Form CRS, and privacy policy to your clients at the time of onboarding. Additionally, each advisor on the platform may supply their Form ADV Part 2B if they choose to do so. This will be presented to their clients at the time of onboarding alongside the other documents that may be supplied at the firm level. Provision of the Form ADV Part 2B is optional, and can be implemented even if your firm does not supply any of the other agreements or disclosures. Use of the Client Agreement Automation function is optional. If you choose not to use the function or to provide only a subset of your firm documents, you will need to separately execute your agreements between your firm and your clients and deliver firm disclosures in a manner determined by you outside of the Betterment for Advisors platform. The Client Agreement Automation function is only intended to assist firms in presenting agreements and disclosures associated with account openings. Subsequent updates to these documents are not re-delivered to existing clients; the firm must make their own arrangements to deliver any such updates. Contact us with questions at support@bettermentforadvisors.com. How It Works Overview: The Client Agreement Automation allows your firm to provide a form advisor agreement, Form ADV Part 2A, Form ADV Part 2B, Form CRS and privacy policy to Betterment, which Betterment will then host. As part of the Betterment for Advisors client signup, Betterment will electronically deliver these documents to your clients and permit your clients to click a checkbox indicating their consent to your firm’s form advisory agreement. You have the option of providing only a subset of the documents listed above, though you must provide an advisory agreement to use this function. Only those documents which you upload to your firm dashboard will be provided to clients. Signup: As part of the Betterment for Advisors electronic signup process, your clients are presented with agreements between them and Betterment, and acknowledge receipt of Betterment’s disclosure documents. If you elect to use the Client Agreement Automation function, your clients are also presented with your firm’s advisory agreement and any disclosure documents you have uploaded as of the date each client signs up. This allows the client to execute and/or acknowledge these documents all at once, rather than separately. Your client electronically consents to the terms of these agreements by checking a checkbox and clicking a button to agree to create their account. Please note that Betterment does not collect traditional handwritten signatures for either your agreement or the Betterment for Advisors agreements. Instead, consent is indicated via mouse click or other electronic method of input, and the date and time of such consent is recorded and stored. Records: In the advisor dashboard, under the “Agreements” tab, each advisor can view which of their clients executed the firm’s agreement electronically, the date and time at which they executed the agreement, and a digital copy of the version they executed (along with the versions of the firm’s Form ADV Part 2A, Form CRS and privacy policy, and the advisor’s Form ADV Part 2B, provided these documents were uploaded at the time the client was onboarded). This table is your record that your client executed your agreement electronically. Note that you can view and download the agreement by clicking the “Agreements Package” button on the right of the table. Copies of Form ADV Part 2B will appear alongside the agreements package if one was present at time of signup. A similar page is provided to Compliance users in the Compliance page in the Betterment for Advisors platform, allowing those with the Compliance permissions to view all of the firm’s clients and their agreements. Important Considerations for Your Firm Please review these items carefully before deciding whether or not to use the Client Agreement Automation function. One of each type of document per firm: The Client Agreement Automation function only supports one of each type of document per firm at a time, meaning one advisory agreement, one Form ADV Part 2A, one Form CRS, and one privacy policy at a time. You may change that agreement by having a firm admin upload a new copy of the agreement via the Agreements section of the Betterment for Advisors web portal. Once a new form of agreement is uploaded, this new form will be presented to all new clients who sign up in the future, but it will not be presented or distributed to existing clients. Form ADV Part 2B: Each individual advisor on the platform may upload their own ADV Part 2B if they choose or if their firm directs them to do so. If a Form ADV Part 2B is present when a client signs up, a record of the acknowledgement of receipt of the Form ADV Part 2B and a copy thereof will be presented on the Agreements page as well as in the Compliance view, alongside firm-level agreements (if supplied). Form CRS: When present, the Firm’s Form CRS will be shown as the first disclosure alongside the other documents and disclosures during client onboarding that are a part of the Agreements Automation Service. In addition to client onboarding, the Firm’s Form CRS is presented to clients when adding additional services. Additional services when the Firm’s Form CRS will be presented include when the client opens a new type of account, on the client consent form when the advisor initiates the opening of a new type of account, when a rollover is initiated by a client, on the client consent form when the advisor initiates a rollover, on quarterly statement notifications, and when a user logs in for the first time since the Firm has uploaded or updated their Form CRS. Examples of opening a new type of account include, when a client with a taxable investing account opens an individual retirement account or when a client with an individual retirement account opens a joint account. Fee changes: When considering whether to use the Client Agreement Automation function, you should take into account that advisors have the ability to change the fees they charge specific clients in the advisor dashboard (subject to available Billing Plans, which can only be created by firm admins.) Before using the function, you should determine how, if at all, this impacts the structure of your agreements. Always on: If you decide to use the Client Agreement Automation function, it will be turned on for all of the clients that you bring to Betterment for Advisors. This means that all clients you bring to Betterment for Advisors will have to execute the agreement you provided to Betterment as part of the signup process. Multiple signatories: Currently, the Client Agreement Automation function does not support accounts with multiple signatories, such as trusts with multiple trustees and joint accounts. Agreement amendments: While agreements can be updated and will go live for future client onboarding, we do not support amendments to your agreements with existing clients on our system. If you would like to amend your agreement with some of your clients, you will need to do so yourself, using whatever non-Betterment mechanism and recordkeeping system you deem appropriate. Form ADV Part 2A, Form CRS and privacy disclosure updates: While Form ADV Part 2A and Form CRS can be updated and will go live for subsequent client onboarding, we will not send any updates to your Form ADV Part 2A, Form CRS, or privacy disclosures to your existing clients. You are responsible for complying with SEC rules governing when and how to deliver any required disclosures and amendments to these documents to your clients.

The Betterment for Advisors Client Agreement Automation function will make onboarding your new clients fast, easy, and completely paperless.

By permitting your clients to execute your firm’s advisory agreement as part of the white-labeled Betterment for Advisors signup experience, you automate a manual process, giving you more time to focus on your business while providing your clients with a better experience.

How to Get Started

To get started, have a firm admin navigate to the Agreements page to upload the following documents:

a PDF of the advisory agreement between your firm and your clients, signed by an authorized party at your firm
a PDF of your firm’s Form ADV Part 2A
a PDF of the advisor’s relevant Form ADV Part 2B, if applicable (see below)
a PDF of your firm’s Form CRS
a PDF of your firm’s privacy policy

Note that an executed advisory agreement is required to use the Client Agreement Automation function, but the Form ADV Part 2A, Form CRS, and Privacy Policy are all optional. Any advisor may upload their ADV Part 2B, independent of the presence of firm-level documents.

About the Client Agreement Automation Function

The Client Agreement Automation function gives you the option to have your clients electronically execute your firm’s advisory agreement as part of the white-labeled onboarding experience. It also will permit you to provide your Form ADV Part 2A, Form CRS, and privacy policy to your clients at the time of onboarding.

Additionally, each advisor on the platform may supply their Form ADV Part 2B if they choose to do so. This will be presented to their clients at the time of onboarding alongside the other documents that may be supplied at the firm level. Provision of the Form ADV Part 2B is optional, and can be implemented even if your firm does not supply any of the other agreements or disclosures.

Use of the Client Agreement Automation function is optional. If you choose not to use the function or to provide only a subset of your firm documents, you will need to separately execute your agreements between your firm and your clients and deliver firm disclosures in a manner determined by you outside of the Betterment for Advisors platform.

The Client Agreement Automation function is only intended to assist firms in presenting agreements and disclosures associated with account openings. Subsequent updates to these documents are not re-delivered to existing clients; the firm must make their own arrangements to deliver any such updates.

How It Works

Overview: The Client Agreement Automation allows your firm to provide a form advisor agreement, Form ADV Part 2A, Form ADV Part 2B, Form CRS and privacy policy to Betterment, which Betterment will then host. As part of the Betterment for Advisors client signup, Betterment will electronically deliver these documents to your clients and permit your clients to click a checkbox indicating their consent to your firm’s form advisory agreement. You have the option of providing only a subset of the documents listed above, though you must provide an advisory agreement to use this function. Only those documents which you upload to your firm dashboard will be provided to clients.

Signup: As part of the Betterment for Advisors electronic signup process, your clients are presented with agreements between them and Betterment, and acknowledge receipt of Betterment’s disclosure documents. If you elect to use the Client Agreement Automation function, your clients are also presented with your firm’s advisory agreement and any disclosure documents you have uploaded as of the date each client signs up. This allows the client to execute and/or acknowledge these documents all at once, rather than separately. Your client electronically consents to the terms of these agreements by checking a checkbox and clicking a button to agree to create their account. Please note that Betterment does not collect traditional handwritten signatures for either your agreement or the Betterment for Advisors agreements. Instead, consent is indicated via mouse click or other electronic method of input, and the date and time of such consent is recorded and stored.

Records: In the advisor dashboard, under the “Agreements” tab, each advisor can view which of their clients executed the firm’s agreement electronically, the date and time at which they executed the agreement, and a digital copy of the version they executed (along with the versions of the firm’s Form ADV Part 2A, Form CRS and privacy policy, and the advisor’s Form ADV Part 2B, provided these documents were uploaded at the time the client was onboarded).

This table is your record that your client executed your agreement electronically. Note that you can view and download the agreement by clicking the “Agreements Package” button on the right of the table. Copies of Form ADV Part 2B will appear alongside the agreements package if one was present at time of signup.

A similar page is provided to Compliance users in the Compliance page in the Betterment for Advisors platform, allowing those with the Compliance permissions to view all of the firm’s clients and their agreements.

Important Considerations for Your Firm

Please review these items carefully before deciding whether or not to use the Client Agreement Automation function.

One of each type of document per firm: The Client Agreement Automation function only supports one of each type of document per firm at a time, meaning one advisory agreement, one Form ADV Part 2A, one Form CRS, and one privacy policy at a time. You may change that agreement by having a firm admin upload a new copy of the agreement via the Agreements section of the Betterment for Advisors web portal. Once a new form of agreement is uploaded, this new form will be presented to all new clients who sign up in the future, but it will not be presented or distributed to existing clients.

Form ADV Part 2B: Each individual advisor on the platform may upload their own ADV Part 2B if they choose or if their firm directs them to do so. If a Form ADV Part 2B is present when a client signs up, a record of the acknowledgement of receipt of the Form ADV Part 2B and a copy thereof will be presented on the Agreements page as well as in the Compliance view, alongside firm-level agreements (if supplied).

Form CRS: When present, the Firm’s Form CRS will be shown as the first disclosure alongside the other documents and disclosures during client onboarding that are a part of the Agreements Automation Service. In addition to client onboarding, the Firm’s Form CRS is presented to clients when adding additional services. Additional services when the Firm’s Form CRS will be presented include when the client opens a new type of account, on the client consent form when the advisor initiates the opening of a new type of account, when a rollover is initiated by a client, on the client consent form when the advisor initiates a rollover, on quarterly statement notifications, and when a user logs in for the first time since the Firm has uploaded or updated their Form CRS. Examples of opening a new type of account include, when a client with a taxable investing account opens an individual retirement account or when a client with an individual retirement account opens a joint account.

Fee changes: When considering whether to use the Client Agreement Automation function, you should take into account that advisors have the ability to change the fees they charge specific clients in the advisor dashboard (subject to available Billing Plans, which can only be created by firm admins.) Before using the function, you should determine how, if at all, this impacts the structure of your agreements.

Always on: If you decide to use the Client Agreement Automation function, it will be turned on for all of the clients that you bring to Betterment for Advisors. This means that all clients you bring to Betterment for Advisors will have to execute the agreement you provided to Betterment as part of the signup process.

Multiple signatories: Currently, the Client Agreement Automation function does not support accounts with multiple signatories, such as trusts with multiple trustees and joint accounts.

Agreement amendments: While agreements can be updated and will go live for future client onboarding, we do not support amendments to your agreements with existing clients on our system. If you would like to amend your agreement with some of your clients, you will need to do so yourself, using whatever non-Betterment mechanism and recordkeeping system you deem appropriate.

Form ADV Part 2A, Form CRS and privacy disclosure updates: While Form ADV Part 2A and Form CRS can be updated and will go live for subsequent client onboarding, we will not send any updates to your Form ADV Part 2A, Form CRS, or privacy disclosures to your existing clients. You are responsible for complying with SEC rules governing when and how to deliver any required disclosures and amendments to these documents to your clients.