Betterment is a New York based financial advisory company that specializes in cash management services and robo-advising. The company was founded in 2010 by Jon Stein in the aftermath of the 2008 financial crisis. Betterment’s main goal is to provide quality financial guidance to everyone, not just the wealthy. The company has more than $25 billion in managed assets and more than 550,000 customer accounts.
Currently, Betterment has yet to file for an IPO, and didn’t immediately respond to Grit Daily’s request for comment.
Will Betterment IPO?
Stein stepped down as Betterment CEO last December, and had nothing but praise for his successor, Sarah Kirshbaum Levy. In Stein’s official statement, he said that:
“Sarah started out at Disney and spent the last 20 years at Viacom, home to beloved brands including Nickelodeon, BET, MTV, and Comedy Central. Through a series of senior leadership roles, culminating in Chief Operating Officer, she’s shepherded global phenomena, from SpongeBob to The Daily Show with Trevor Noah, connecting with audiences in meaningful ways. With her experiences leading large public companies, Sarah is the right executive to lead Betterment now, as we contemplate a transition from private to public in the coming years,” the company writes.
Although this isn’t an official confirmation that Betterment will IPO, it does appear to be a goal for the company, or at least for the founder and former CEO. That’s a good sign that the company will likely try for an IPO in the future, as most companies with that goal tend to hint at it early on.
One of the frequently asked questions on Betterment’s official website asks, “What happens to my money if Betterment goes public?” Here is the response.
“Betterment Securities is a member of the Securities Investor Protection Corporation (SIPC). At a high level, you can think of SIPC as providing protection for funds held in a brokerage account in the event that the brokerage fails.
The Securities Investor Protection Corporation (SIPC) provides insurance that protects your investments, including those held by our broker, Betterment Securities. It covers up to $500,000 of missing assets, including a maximum of $250,000 for cash claims.
The limit applies only to the value of missing securities, not losses due to market volatility. If there are securities identified as belonging to the customer, these (or their equivalent value) will be returned regardless of account size, and the $500,000 limit will apply only to the difference.
Types of accounts and investments generally protected by SIPC include stocks, bonds, mutual funds, money market mutual funds (MMMFs), certificates of deposit (CDs), annuities, government securities, municipal securities, and U.S. Treasury securities (Treasuries).”
What Are Some of the Services Betterment Offers?
Betterment offers Betterment Checking, a mobile first checking account and Visa debit card. Betterment states on their website that they reimburse ATM fees, foreign transaction fees and that the company cut out overdraft fees and minimum balances.
More interested in saving? Try the Betterment Cash Reserve, a high-yield cash account, “designed specifically for the money you save every day.”
Betterment also offers individualized investing portfolios specific to your investing and spending needs. The Betterment investing strategy is based off of Nobel Prize winning research to help customers earn better returns of investment.
Betterment also currently offers long term retirement savings advice with “Tax-smart” technology that’s designed to help customers out long-term. (Betterment quotes a potential up to 38.8% figure in potential earnings with the help of their retirement recommendations and the Betterment robo-advisors.)
Current Betterment CEO Sarah Levy spoke to Ria Biz about what makes Betterment rise above competitors.
“Advisors [and their clients] want and deserve more from a platform partner,” she says. “Our delightful end-user experience and amazing tax solutions have always been advantages…Now we’re adding incremental investment to enhance advisor customization, drive a steady stream of better platform capabilities for advisors and grow the relationship management team.”
A Betterment IPO has yet to be confirmed, but the company seems to be increasing its customer platform every day. Stay tuned for updates.