Advisers on Betterment’s platform can now offer their business-owner clients a 401(k) solution, a move by the robo-adviser to help attract additional assets while fostering the growth of both its advisory and retirement plan business lines.
Betterment announced Tuesday the national launch of its Advised 401(k)s, which are available to the 550 advisory firms on the Betterment for Advisors platform, according to a company spokesperson.
By integrating the 401(k) function from Betterment for Business with its adviser service, Betterment can act as the plan’s 3(38) investment manager. Betterment collects the assets under management fee advisers set themselves, and forwards it to them on a quarterly basis.
With a significant portion of individual wealth held in 401(k)'s combined with the recent surge in robo-advisor account openings, it makes sense for Betterment to leverage the momentum and capture assets as they roll out of 401(k) plans, according to David Goldstone, Backend Benchmarking’s head of research.
“Betterment's integration of these two business lines and the recent Personal Capital acquisition by Empowerment are both examples of how firms are seeking to find synergies between 401(k) plans and individual wealth management businesses,” Goldstone said.
Further, tapping into 401(k) plans allows advisers to attract additional business and get their foot in the door with a marketplace that isn’t typically in their wheelhouse, according to Celent analyst Andrew Schwartz.
“As robo-advisers become more sophisticated, they’re going to start looking into areas to offer their advisers more options,” Schwartz said. “People like the ability to choose from a myriad of offerings, and these tools can be a huge value add to allow certain firms to tap into another marketplace.”
The Carmel, Indiana RIA grew nearly 150% in assets since severing ties with its first backer following a FINRA dispute.
Meanwhile, Raymond James' employee arm adds a defector from D.A. Davidson, and South Carolina-based RIA Ballast Rock Private Wealth recruits a new advisor.
A FINRA arbitration panel sided with a former wealth manager fired over a $642 deli platter and a disputed client event.
From disruptive AI to a looming advisor shortage and an impending migration of clients amid the Great Wealth Transfer, every headline of crisis hides an industry-defining opportunity.
New ICI research shows savers approaching retirement are most likely to ditch the glide path for a more personalized approach.
As $84 trillion prepares to change hands, advisors who treat estate planning as peripheral are quietly building a sieve, not a book.
In volatile markets, the advisors who win aren't the ones with the best calls - they're the ones whose clients stay the course.
