Maybe I'm not understanding but I believe Betterment's 0.15% is on top of the ETF fees that the underlying ETFs charge (though you'd be hard pressed to find that info on their site! I've just spent 10 minutes looking lol). Wheras with Vanguard's Target Retirement Fund the 0.17% ER includes everything.
When I'm managing my funds on my own, my effective ER is 0.10% (according to the Vanguard portfolio analysis).
If instead I used any Vanguard Target Retirement fund, the ER is 0.17%. Therefore, the cost of having Vanguard manage the funds for me is 0.17% - 0.10%, or 0.07%.
Betterment uses a much more complex portfolio mix than I would use on my own, but they charge 0.15% on top of Vanguard fees.
Whether I'm getting charged 0.07% or 0.15%, I'm still getting charged a proportional fee of some type. Why rail against the robo-advisors for using a proportional fee structure, then recommend as an alternative a company that also uses a proportional fee structure?
There actually is an alternative to using a proportional fee brokerage account. You can use a normal brokerage account where you're charged a commission per trade. You can provide discretionary trading authority to someone else to manage your money for you. Typical human financial advisors charge 1% of assets under management for this, but you might find someone to do it for a flat fee.
If you did find that someone, would you trust them with your assets? In an industry where the normal fee for managing $2,000,000 is $20,000/year, and you find someone willing to take full control of the entire account for a flat $120/year (only $10/month!) would you actually hand them your $2 million? Or would you suspect you might not get it back?
I don't mind companies making money, but I want to know how they're making that money. If I can't find it, I get distrustful. Hidden fees, shared revenues, and undisclosed commissions make me think their advice may be biased. Then I make a decision as to whether or not I'm willing to spend that money for their product or service.
I do believe in the philosophy of keeping costs low. As such, I tried out Betterment but ultimately decided I could do it better on my own. On the other hand, I know people whose temperaments and fear of investing are such that they would be ideal candidates for robo-advisors. I like the math and learning about investment concepts. Others have more important things to do with their time.
I disagree with the statement that Betterment's fees are hard to find on their site. They can be found on the front page, under a tab marked "Pricing." Wealthfront's fees are only slightly harder to find. They list an FAQ link on their front page -- one of the categories is "Fees."