Betterment’s Jon Stein steps down as CEO

Betterment founder and CEO Jon Stein is stepping down as the company's chief executive officer, the automated advice platform announced Tuesday.

He will be replaced by Sarah Kirshbaum Levy, former Viacom Media Networks' chief operating officer, and remain with the company to serve as chairman of the board. The reason for the departure was a personal decision by Stein.

Levy has been an operating adviser at Betterment for the last several months, according to the announcement. Stein will remain on through the end of the month to ensure a smooth executive transition. 

"I'm extremely proud of the work we've done at Betterment over the past ten years," Stein said. "It's been an honor and a humbling experience to lead a company that has made such a significant impact on both the financial industry and consumers' everyday lives. But when I look at what is next for Betterment, the time has come for someone else to lead the company through its next stage of growth."

Stein launched Betterment in 2010 on the heels of the Great Recession, providing automated portfolio management services to the mass affluent when that service was typically reserved for the ultra wealthy. Stein has been credited with creating the “robo-adviser” space, according to the announcement.

Stein was named an InvestmentNews Innovator in 2016. To date, Betterment manages more than $25 billion in assets for more than 550,000 customers, according to the release.

In addition to launching the company's retail offering, Stein oversaw the company's entrance into the B2B space with the launch of both its 401(k) arm, Betterment for Business, and adviser services platform, Betterment for Advisors. 

"Jon Stein played a significant role in the robo-advice revolution,” said David Goldstone, head of research at Backend Benchmarking. “Betterment was one of the very first direct-to-consumer robo advice platforms and was a major player in the popularization of robo-advice across the industry. Jon and the Betterment team are among the few independent robo-advice platforms that have reached the scale to both survive and stay independent.” 

Although platforms like Betterment did not up-end the financial services industry like many predicted, these products have successfully democratized financial advice, greatly expanding the market and availability of professional advice

“Now, across the industry, there are financial advice products for those with just a few thousand, or even just $5, to invest,” Goldstone said. 

Betterment’s new CEO comes on the heels of her time as COO of Viacom Media Networks, where she oversaw global strategy, finance and operations for the $10 billion division that housed some of Viacom's iconic brands, including MTV, Comedy Central, and BET.

"I was determined to find a company with an authentic story and a brand that I could believe in, a brand making an impact and a difference in the world. Betterment's mission to help people pursue happiness through financial security hit the mark for me," said Levy. "I am really excited to connect with customers and help share the Betterment story with them, and I am looking forward to leading the company as we continue to improve the financial outcomes of millions of customers."

Levy is an interesting choice coming from a media background instead of a finance background, according to Goldstone. 

“Robo advisors like Betterment have always battled persistently high customer acquisition costs," he said. "Betterment may be looking for someone who can help the company sustain its high level of growth.  Betterment is still not a household name and can still make significant gains in both brand awareness and general awareness of robo advice products."