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Betterment for Business Integrates Carta, Adds Goldman Sachs Portfolio

The robo advisor wants to help participants get a better sense of the valuation of their options for retirement planning.

Betterment recently integrated an equity management software service to its plan sponsor platform, and will add another investment strategy alongside its own to the platform in August, the firm announced Friday.

The $13.5 billion automated advice platform has gradually added features and services to its business lines, like enabling investors to donate shares and advisors to shift asset-class weights in their clients’ portfolios. But the latest changes are coming to Betterment for Business, the plan sponsor platform through which companies can offer their employees a 401(k) retirement account. 

Betterment for Business, which counts many start-ups and technology companies as clients, integrated Carta, which is used to track a firm’s capitalization tables or the valuation of non-traded equity and stock options. Tom Conlon, head of client relations for Betterment for Business, said there is no revenue share agreement between Carta and Betterment and that the feature is intended to improve Betterment for Business, not an attempt to capture wallet share.

Aaron Pottichen, a principal at Alliant Retirement Consulting, said he saw a value in integrating the valuations into a retirement plan. “We have a large base of VC-backed companies and a part of the compensation package they offer for some employees does include options or future equity in the company," he said. "And I can see the value in easily incorporating that equity ownership (or options) into a financial plan.” 

Aaron Schumm, founder and CEO of Vestwell, a digital retirement solutions platform, says that while he uses Carta to help manage his own company, he doesn’t see much value in integrating it into a retirement plan platform because the value of participants’ options in a company can swing wildly, being up one day and worthless the next. It’s not an asset that should be considered in retirement planning, he said.

Betterment for Business will also begin offering a Goldman Sachs Smart Beta portfolio in August: the same one already available to Betterment’s retail clients. The strategy targets higher returns using rules-based factors to determine allocation.

Betterment for Business has more than 440 plan sponsor clients, including Casper, Bitly, Boxed and other recognizable names, Conlon said. He declined to share the amount of retirement assets currently invested through the 401(k) platform.

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