Betterment for Business Goes Live

Betterment for Business already confirmed it would be launching an integrated 401(k) advice and recordkeeping platform back in 2015, but now the service is officially available to employers. 

Betterment today announced the “official launch of Betterment for Business,” a new 401(k) platform which “uses smarter technology and includes personalized investment advice for all plan participants.”

Speaking with PLANADVISER, Betterment founder and CEO Jon Stein stuck with the firm’s (somewhat controversial) claim that Betterment for Business is the “only full-service platform providing recordkeeping and advice.” It should be noted that other firms argue they can offer just as much integration as Betterment, but it’s just not true, according to the firm.

“Since Betterment launched in 2010, our mission has been to improve the way people save and invest through smarter technology,” Stein says. “Today, we’re excited to enter a space that is in need of innovation and smarter technology. Betterment for Business is the only turnkey 401(k) service that includes personalized investment advice for all plan participants. The era of expensive, impersonal, unguided retirement saving is over.”

As part of the official launch, Betterment is highlighting one of its first full-service clients, Boxed, described as “a New York-based mobile wholesale shopping app.” According to Betterment, the employer has signed up as a plan sponsor and rolled out the Betterment for Businesses 401(k) offering to all of their employees.

According to Stein, in signing up for Betterment for Business, “plan administrators will have automated, easy-to-use tools so they can worry about their day-to-day responsibilities instead of whether their 401(k) is compliant.” Employers will be able to enroll new participants through a seamless, paperless onboarding process, he adds, and the employer dashboard will enable companies to easily administer plans and assist them in meeting their fiduciary and regulatory compliance responsibilities. Participants enrolled on the platform will receive a globally diversified portfolio of index-tracking exchange-traded funds (ETFs) with personalized advice in a goal-based investing framework that currently serves more than 130,000 retail customers of Betterment. 

“Participants will also be able to open and customize taxable investment accounts, traditional and Roth IRAs, and trust accounts—and view all side-by-side with their 401(k) accounts. The accounts will be intelligently tax-managed, together,” according to Betterment.

NEXT: ‘Blown away’ by industry reception  

Cynthia Loh, general manager of Betterment for Business, suggests firm leadership has been “blown away by the reception.”

“This reaffirms our view that plan participants and plan sponsors want a 401(k) that is easy to use, low cost, and includes investment advice,” she notes.

As part of the formal launch, Betterment has formed a Betterment for Business advisory board, and announced its first two members: Thomas E. Clark Jr. and Ray Kanner. Clark works as counsel at The Wagner Law Group, a law firm specializing in ERISA and employee benefits, while Kanner heads IBM's global pension and savings system, “one of the largest systems in the United States, overseeing $140 billion of assets.”

Turning to pricing, Betterment for Business “aims to lower costs and offers a simple, easy-to-understand fee structure.” The pricing includes “no upfront fee for plan sponsors with more than $1 million in assets, and an assets under management-based fee ranging from 0.10% to 0.60%.”

Stein says the reason the program uses only ETFs is that “Betterment finds ETFs are more efficient and have a lower cost than mutual funds.”

“We have pricing that appeals to the entire market,” he says. “For those with more than $1 billion in retirement plan assets, 10 basis points (bps) is the all-in price; the smallest plans pay 60 bps. We feel this puts us at a price point at the lower end of market, smaller than what we found when we were searching for a recordkeeper for our own plan.”

In related news, Betterment also today announced it is a launch partner with the Social Security Administration's initiative to integrate participants' Social Security benefits into their retirement planning. More information is at