The largest consumer robo-advisory service has announced that Betterment for Business, a 401(k) platform that offers personalized investment advice for participants, will launch in Q1 2016.
The new platform establishes Betterment as a competitor providing investment management and plan administration capabilities in the growing small-business, defined-contribution plan market,
Betterment for Business carries no upfront fee for plan sponsors with more than $1 million in assets and an assets-based fee ranging from 10 to 60 bps.
"Based on our findings, Betterment for Business is the only full-stack, bundled 401(k) provider to launch in the last three decades," said Jon Stein, Betterment's CEO and founder. “Current 401(k) offerings—and we have examined them all—have poor user experiences, high costs and a clear lack of advice. Not anymore.”
Participants enrolled on the platform receive a globally diversified portfolio of index-tracking ETFs, with personalized advice in a goal-based investing framework, Betterment says.
Participants will also be able to customize taxable investment accounts, traditional and Roth IRAs, and trust accounts—and view all side-by-side with their 401(k) accounts, the company says.
The accounts will be tax-managed, together—a service that Betterment says no other provider in the market provides.
Launched in 2010, New York-based Betterment now has more than $2.6 billion in AUM as it continues to expand its technological offerings.