Betterment strives to help people manage and grow their wealth as well as prepare for retirement through smarter technology at a fraction of the cost of traditional financial services. Betterment for Business wants to help employers to empower their employees do the same. Betterment for Business sets itself apart from other 401(k) providers through:
- Personal investing advice for all your employees: Common feedback we hear from plan sponsors is that their participants are confused as to which funds to invest their 401(k) in - there’s no readily available advice. Furthermore, participants don’t have any sense as to whether they will have enough saved for retirement. Betterment for Business works to solve both of those issues to better ensure retirement readiness for your participants.
Through Betterment, LLC, a registered investment advisor, each participant will be defaulted into a portfolio of stocks and bonds based on their age. Participants are then free to modify portfolio allocations at any time. In addition, Betterment provides tailored, automated advice within each participant's’ account using its RetireGuide which has a Retirement Calculator that takes into account details like cost of living, net worth, spousal assets, and income. This allows participants to manage their 401(k) accounts with all of their assets in mind.
- Low Fees: Betterment for Business has one of the lowest costs in the industry, with no upfront or annual fee for plans over $1 million in assets. Participants pay 0.10–0.60% in fees, depending on the plan size. Compared to 1.5% - 2.0%, which is the average fee for small 401(k) plans according to Brightscope, participants can save hundreds of thousands of dollars over their investing horizon. Employers even have the option of paying some of the fees on behalf of their participants. Betterment doesn't select or offer any proprietary funds like some mutual fund companies, so there isn't the incentive or ability to "pass" admin fees through proprietary fund fees. No trading fees. No rebalancing fees. No sales fees.
- Easy to use: For employers, offering 401(k) plans often goes along with mountains of paperwork, faxing, and dealing with multiple vendors. With Betterment for Business, we leverage technology and simplify your life. Betterment handles plan design, investment management (that’s how we got our start, after all), recordkeeping and compliance. By coordinating and streamlining every aspect of 401(k) in one place, we have simplified the experience for employers and participants alike. We also have a Business Success Team to help ensure smooth onboarding for new plans and plan conversions. Because Betterment LLC acts as a fiduciary under section 3(38) of ERISA, it is legally required to act in the best interest of the plan, thereby helping to reduce employers’ liability to select and monitor investments.
Participants access their Betterment 401(k) through a sleek dashboard, or via a mobile app, where they can see what they’re invested in and get personalized advice based on their own investment needs. To take advantage of Betterment’s advice, participants provide information on their current savings and income, and any other relevant savings assumptions such as desired retirement age and spending, and Betterment does the rest. Betterment can even take into account their spousal assets and external accounts in order to offer holistic advice.
- Transparent pricing: Many providers hide the costs of 401(k)s within fund expenses, making it difficult to determine what services are provided, and at what cost. Our pricing structure unbundles the key offerings we provide – advisory, investment, recordkeeping, and compliance – and clearly aligns a fee to each service. Employers even have the option of paying some of the fees on behalf of their participants.