Robo Advisor Betterment Officially Launches 401(K) Platform
Robots are coming for your 401(k) business. Automated investing provider Betterment caused a stir in September when it announced a plan to target the 401(k) plan market. They made good on Wednesday with the official launch of Betterment for Business. The new 401(k) platform, which uses technology and includes personalized investment advice for all plan participants, is now live for a charter group of plan sponsors and participants. “Since Betterment launched in 2010, our mission has been to improve the way people save and invest through smarter technology,” Jon Stein, founder and CEO of Betterment, said in a statement. “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.” Boxed, a New York-based mobile wholesale shopping app, has signed up as a plan sponsor and rolled out the Betterment for Businesses 401(k) offering to all of their employees. “At Boxed, we’re a technology company at heart, so working with Betterment is a natural fit for us,” said Chieh Huang, CEO and founder of Boxed. “We are thrilled to able to provide our employees a true cost-effective benefit and help set them up for retirement.” Boxed has previously been recognized for their employee benefits, including paying for the four-year college tuition of their employees’ children. “When we announced Betterment for Business earlier this year, we anticipated the response we’d received from companies would be high, but we’ve been blown away by the reception,” said Cynthia Loh, General Manager of Betterment for Business. “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.” Betterment for Business has formed an advisory board and its first two members are Thomas E. Clark Jr. and Ray Kanner. Thomas E. Clark Jr. is Of Counsel at The Wagner Law Group, a law firm specializing in ERISA & employee benefits. Earlier in his career, Thomas worked for the law firm of Schlichter, Bogard & Denton on such landmark cases as Tibble v. Edison, which was decided by the U.S. Supreme Court last year. Ray Kanner heads IBM’s global pension and savings system, one of the largest systems in the United States, overseeing approximately $140 billion of assets. Participants enrolled on the Betterment for Business platform are invested in a globally diversified portfolio of index-tracking exchange-traded funds (ETFs) and benefit from personalized advice in a goal-based investing framework. The Betterment platform currently serves more than 130,000 retail customers. Participants will also be able to easily open and customize taxable investment accounts, traditional and Roth IRAs, and trust accounts-and view all of them alongside their 401(k) accounts. The accounts will be intelligently managed, together-a service that few other providers in the market offer. In 2015, Betterment was announced as a launch partner with the Social Security Administration’s initiative to integrate participants’ Social Security benefits into their retirement planning. Consistent with Betterment’s retail service, Betterment for Business aims to lower costs and offers a simple, easy-to-understand fee structure, with 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%.
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