Disqualification Events

Updated February 15, 2024


Because Betterment is an SEC registered investment adviser, we are subject to rules and regulations that govern how we compensate clients for making referrals or marketing our services. In order to receive promotions and offers from Betterment, you must not be subject to any “Disqualification Events” under Rule 206(4)-1 of the Investment Advisers Act of 1940 (the “Advisers Act”) in the past 10 years. We have summarized general types of Disqualification Events below:

Disqualification Events include both disqualifying actions by the SEC and disqualifying events, which are generally: 

  • Making false or misleading registration statements to the SEC
  • Convictions of felony or misdemeanor crimes (A) involving securities, false oaths, false reports, bribery, perjury, burglary, or conspiracy to commit any of those offenses, (B) arising out of conduct of the business of a broker-dealer, securities dealer, investment adviser, bank, insurance company, or fiduciary (among other securities-related businesses), (C) involving larceny, theft, robbery, extortion, embezzlement, forgery, counterfeiting, fraud, misappropriation of funds or securities, (D) violations of the federal securities laws, (E) punishable by imprisonment for 1 or more years, or (F) substantially equivalent crimes by foreign courts.
  • Permanent or temporary injunctions from acting as an investment adviser, broker-dealer, underwriter, or similar function
  • Wilful violations of the Securities Act of 1933, including wilfully aiding, abetting, counseling, or inducing another person to violate the Securities Act of 1933
  • Subject to any order of the SEC barring or suspending your rights to be associated with an investment adviser
  • Being found by a foreign financial regulatory authority to have engaged in any of the above conduct
  • Being found by a final order of any State securities commission (or agency performing similar functions) to have engaged in any of the above conduct