Building off of the $70mn funding round from the summer Betterment is now reportedly worth $1bn; the $1bn mark is significant as it denotes that a company is considered a unicorn; the valuation makes Betterment the first robo advisor to reach unicorn status; the company currently has over $11bn in assets under management. Source.
Jon Stein first looks to the past of investing in stocks with significant milestones such as the introduction of index funds, trade automation and decreasing trading costs leading to the ability to be easily diversified; thus old models of charging people to trade or to be diversified don't work; looking at the current and future trends Jon discusses that investors are now more responsible than ever for their own retirement and need advice; Jon Stein shares how Betterment is providing financial advice to more people; the company manages over $8 billion in assets and has 240,000 customers. Source
PeerStreet has partnered with Betterment to provide increased access to its platform data for investors through the Betterment service; with the new partnership investors can now view their PeerStreet positions on the Betterment dashboard; the partnership is facilitated by data integration from Quovo. Source
In this episode we talk with Sarah Levy, the CEO of Betterment, about investing, robo-advice, the banking crisis, gender diversity and much more.
Robo advisors have quickly become a must have product for banks as they look to offer their customers comparable products...
I examine the unbelievable transformation and restructuring happening in high finance. Global bank HSBC is planning to lay off over 10% of staff, looking at reductions of 35,000. E*TRADE is being acquired by Morgan Stanley, integrating its 5,000,000 accounts and $360 billion of assets into the Wall Street investment firm. Legg Mason and its $800 billion of assets are being folded into Franklin Templeton for $4.5 billion, less than what Visa had paid for fintech data aggregator Plaid and half of what Robinhood is likely valued privately. How do we make sense of these developments? How do we appeal to the heart?
Through the partnership, the firm hopes to provide more personalization to their over 270,000 users; both portfolios were vetted by Betterment to ensure quality and affordability standards; Dan Egan, director of behavioral finance investments at Betterment stated, “We wanted to get these strategies out to our clients as quickly as possible, rather than build them out ourselves.” Source
In this conversation, we talk with Brian Barnes of M1 Finance, about finance “super apps”, the cost-efficiencies of robo-advisors, fractionalized share trading, and tackling the titans of the Wealth Management industry. We also discuss the nuts and bolts of the financial infrastructure making this possible.
M1 Finance bundles together roboadvisory, neobanking and lending into a single “super app”, allowing for combined pricing power (i.e., charging nothing on asset allocation). The firm currently has $3 billion in AUM, a growth of 50% in the past four months and tripling their total in just over a year. Notably, the company has its own broker/dealer and offers fractional shares, and partners with Lincoln Savings bank on the deposit accounts. That makes for a compelling business model from securities lending, interchange, and order flow.
This week, we look at Betterment launching a bank account and payments feature. They are not the first, but they could be the best! Still, it feels like the world has moved on. Barriers to entry around digital finance have collapsed, and shifted industry goal posts. Hundreds of companies are integrating API-based solutions that connect to banking and investment entities. Amazon, Google, and Apple are there already. And let's not forget the incredible pressure from the COVID recession: 20MM+ unemployed, $100 billion decrease in global remittances, 1 in 8 banks being unprofitable. Is it time for incremental improvement, or a sea change?
We are like the hungry at the all-you-can-eat buffet. In the beginning, there is not enough! Let's democratize access to food; to music; to transportation; to healthcare; to finance; to payments; to banking; to lending; to investing. The billions in institutional capital across universities, pensions, and sovereigns are delegated to smart portfolio managers. The day before yesterday, it was allocated by small cap stock pickers (hi Warren!). Yesterday, it was the alternative managers of hedge funds and private equity. Today, it is the trading machine and the venture capitalist. Tomorrow, it is the cryptographic artificial intelligence.