Employee Benefit News
Everything you need to know about robo-advisers
By Andrea Davis
Betterment, which launched in 2010, announced in September it would be pursuing the 401(k) market. The retail side of the business has $3 billion in assets under management and 115,000 customer accounts.
Under Betterment’s model, the company acts as the plan’s recordkeeper and investment adviser. The firm is an SEC registered investment adviser. Betterment’s 401(k) service will default participants into a managed account of stocks and bonds through exchange-traded funds. “Most recordkeeping systems cannot handle ETF trading, but ours clearly can,” says Loh. “The big difference is that we’re auto-enrolling our participants into a managed account – essentially that is our QDIA [qualified default investment account.]”