I opened a Betterment account, and a week and a half later closed it. I was anxious at investing myself and that is why I wanted to go an easier route, but I took the extra time to cram and research and when it came down to it, the monthly charge would be a large hit in the long run.
Even with the amount I'm starting with, 30-50K, its $7 a month for their "management". In a year that is $84, and 10 years that is almost $1000 which would nearly double to $1,967 in 10 years at 7% interesting. This math is of course assuming that your betterment account never grows, because their billing amount becomes larger the larger your account holding is! So as your portfolio grows with them, the management cost and loss for you grows as well!
The thing you need to realize is they are investing in index funds, which are purposely unmanaged. What they are offering as "account management" is simply the reallocation portion. Picking indexes and then moving funds around as time passes. The toughest part is picking the indexes, reallocation is easy.
Once you have your index funds selected, and then what % you want to put into each (say 60% stocks, 40% bonds) you then just need to manage those percentages. As one grows more than the other in your account, and gets reinvested in the same index fund(s) that percentage of your portfolio will increase.
Think of it like this;
You have a bowl of M&M's and Skittles. The M&M's are Stocks, the Skittles are Bonds. The Bowl is your portfolio. The total number of both candies represents 100% of your portfolio. The split, is the number of each candy you have in your bowl. In our case, lets say we have 60% M&Ms, 40% Skittles.
The total number of candies in your bowl grows based on the candies values in the market. Lets say the market is a brown bag mixed with both candies. As times goes by, the brown bag pours returns, (more candy) into your bowl. Now lets say with that pour you earn 7% more M&Ms, and 3% more Skittles. In volume of each type of candy (which represents the $ value) your percentages will change. If you make more of one than the other, than you might now find yourself with 70% M&Ms, and 30% Skittles in your bowl. The total number of both has grown (in our scenario) but the percentage of each in relation to the whole bowl has changed.
Reallocation is easy. You then take the extra 10% of M&M's, and trade them for Skittles, bringing your bowl total back (re-allocating) to the 60/40 split you want. This works the same if you were to make it more complicated and lets say, Split your M&M's into two types. One being Regular M&M's (lets say this is Large Growth Domestic Stocks), and the other being Peanut M&Ms (International Stocks). Of the 60% of M&Ms in your bowl, 40% might be Regular, and 20% might be Peanut.
Again, as the brown bag (the market) pours more of all candies into your bowl, you reallocate by trading in your candies to maintain your percentages.
This is a basic example, not accounting for loss instead of gain, or more complex splits, but it is what re-allocation is all about. It forces you away from managing winners and losers, and simplifies it by simply working towards maintaining percentages.
If you think you can do that, then Betterment isn't for you. Reallocation isn't something you need to do regularly, you can do it every year, or few months, depending on your preference. For a taxable account, the longer you go before reallocating the better chances you have of paying less taxes due to Long-Term Gains instead of Short-Term.
If you just want to give your money to someone else and tell them the percentages you want and then not have to move things around ever yourself, then go with Betterment. It might be worth the cost. But keep in mind, there are Vanguard Index funds that do this as well, and with no monthly account management fee!!
Picking a Life Strategy Fund, or Retirement Fund through Vanguard takes all the stress out of it. One maintains a split for you, the other will gradually change the split to safer investments as years pass. They are very much "Set it and forget it" type funds, and all without the cost of "active management" that Betterment is offering.