The fact that so many start-ups have jumped into this space speaks to a problem with a basic business model that has plagued the financial advice industry for decades. Helping people sort through their investments, budgets, employee benefits, taxes, estate planning and insurance takes time. No two clients are exactly alike.

If advisers earn their compensation through commissions from investment or insurance companies, then they’re likely to favor those funds and policies. This often isn’t in the best interest of the customers, most of whom ought to be in low-cost index funds. And the better index funds and similar investments tend to come from companies that don’t pay commissions.

Customers can pay advisers directly, and many do pay them 1 percent each year of the money under management. But a large number of the best advisers won’t get out of bed for less than $5,000 or $10,000 annually (drawn from a $500,000 or $1,000,000 portfolio), given the amount of time and resources it takes to do right by a client. Some others charge by the hour and still agree to work in a client’s best interest, but plenty of customers dislike being on the clock.

Some people need no professional help at all. They don’t mind spending time managing their finances. They invest in the right things, don’t bail out when the markets go bonkers and don’t have messy financial situations resulting from inheritances or disabled children or small business tax complications.

But companies like Betterment and Wealthfront realized that many other people wanted a bit of hand-holding when it came to investments. So they built easy-to-use sites that sought customers’ goals and risk tolerance and then put the money in a portfolio of index or exchange-traded funds. To address the question about what these random entrepreneurs know about investing, both companies cite decades of research about the right way to construct their collections of investments and rebalance customer holdings when markets rise and fall.

Security is a slightly different question. An event like the Ponzi scheme perpetrated by Bernard L. Madoff is exceedingly rare but never entirely impossible, though thieving financial planners do steal money stored with well-known third-party companies, too. Some faith is necessary with any financial services start-up. At the same time, the power of legacy brand names can allow many financial service companies to collect much more in fees than they deserve.