Betterment

Betterment is a robo-advisory platform that offers both digital-only and hybrid investment management services for individuals and businesses. For individuals, the company offers automated investing services through ETFs linked to stocks and bonds based on preferences and risk appetite. The platform also offers cryptocurrency portfolios for retail investors, along with individual retirement accounts and banking products such as high-yield savings and checking accounts, pursuant to a license from FDIC member bank nbkc.

Betterment’s platform for businesses and employers allows them to provide and manage 401(k) benefits, investment services, and student loan management services. In addition, the company has a platform for investment advisors to build and manage custom portfolios on the back of Betterment’s automated trading features. In June 2023, the company launched Betterment for Advisors product offering which includes tax optimization, streamlined client onboarding, customizable drift thresholds tools to support advisors with offering customized tax-efficient investment management services at scale.

Betterment offers four main services: Investing, Cash Reserve, Checking, and Premium. The Investing plan charges either USD 4 monthly or 0.25% annually, with no minimum balance required. It includes features like multiple portfolio options, tax-saving tools, and automated rebalancing. Cash Reserve and Checking accounts have no fees, with Cash Reserve offering a 4.50% variable APY and FDIC insurance up to USD 2 million. The Premium plan requires a minimum USD 100,000 investing balance and charges a 0.65% annual management fee. This higher-tier plan provides personalized financial advice, access to Certified Financial Planners, an exclusive US-only portfolio, and additional benefits like a 0.25% Preferred Cash Reserve Rate boost and discounted estate planning services. 

Betterment agreed to acquire Marcus Invest's digital investing accounts from Goldman Sachs in April 2024. It planned to strengthen its position in the digital investing space by transitioning the acquired accounts to its platform, providing customers with automated investing, diversified portfolios, tax-smart tools, and access to human advisors. The company acquired the US clientele of Toronto-based Wealthsimple in March 2021 for an undisclosed amount. In February 2022, the company also announced the acquisition of cryptocurrency robo-advisor Makara for an undisclosed sum which was to be used as a foundation of its own cryptocurrency investment offerings.

Key customers and partnership

As of October 2024, the company had over 900,000 customers with over USD 50 billion worth of assets under management.

In June 2023, Betterment partnered with Ascensus, a financial tech solutions provider, to introduce employee wellness offerings that include 401(k), student loan management, personal retirement and investing, financial coaching, and educational savings. In September 2022, Betterment announced a partnership with Gemini, a crypto exchange and custodian, to offer curated crypto portfolios with listed digital assets on Gemini’s exchange. It also planned to use Gemini’s custodian services to allow its users to invest in cryptocurrencies and digital assets.

In July 2024, the company partnered with Goldman Sachs to launch the Goldman Sachs Tax-Smart Bonds portfolio, aimed at generating after-tax yield for investors in higher tax brackets. The portfolio personalizes bond allocations based on individual tax situations and adapts to market conditions to potentially achieve higher after-tax yields.