Betterment isn't necessarily better than a simple index fund though. I just went to Betterment's website here:
https://www.betterment.com/portfolio/
Then scrolled to the cumulative returns section, choose ten years (end of Dec 2006 until end of Dec 2016), and selected the stock allocation that gave Betterment the very best return. The result: 54.4% return (4.4%/year) in 10 years for the 50% stock / 50% bond option.
Then I went to Vanguard and selected their balanced fund (currently 59% stocks, 39% bonds, the rest in cash):
https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0502
For the same 10 year period: 86% return (6.4%/year).
Just buying one index fund, the simplest possible balanced fund from Vanguard, returned far more than cherry picking Betterment's best fund mix. And Vanguard's fee for that fund is about 1/3rd of what Betterment has. Vanguard does all that Betterment does but they advertise themselves differently. Basically Betterment takes Vanguard funds, adds a fee, and sells them back to you:
https://support.betterment.com/cust..._id=9042&_ga=1.175315302.557154610.1489624855
.