John Stein and co announce a secret squirrel plan, hatched after Betterment tried to get a 401(k) plan for its employees from Vanguard.
Betterment will focus on the competitive small-plan 401(k).
RiaBiz does a full tear-down of Betterment's plans, which include going straight after retirement incumbent Fidelity.
“We’re doing everything,” says Stein. “We’re doing recordkeeping. We’re doing advice. We’re doing the participant account opening. We’re an end-to-end bundled solution and no one has done this [full offering] since Fidelity came into the space.” In service of this vision, Betterment has hired dozens of new employees from the retirement arena and has rented a new floor in its Silicon Alley headquarters to house them. The 401(k) program will use a built-from-scratch platform and will serve as the record keeper, advice-giver and fund-picker. Betterment charges about 60 basis points and the firm will serve as a fiduciary to plan sponsors offering low-cost ETFs on its platform, which the company says is open-architecture.
