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401(k) Advisory Services Terms

Updated February 6, 2024
  1. Introduction. Client understands and agrees that these Advisory Services Terms govern all aspects of Client’s relationship with Betterment LLC (“Betterment”) and are incorporated by reference into the Betterment at Work Master Services Agreement (“MSA”).  
  2. The Program; Scope of Services. Betterment will recommend one or more Investment Styles to Client that are appropriate for the Plan and its Participants. Each Investment Style will be made available to Plan Participants for the investment of Assets in Participant Accounts, in accordance with the Participant Terms and Conditions.

    Betterment shall prepare and Client shall approve an IPS for the Plan. The IPS shall designate one or more investment strategies (each consisting of an Investment Style and asset allocation) as a “qualified default investment alternative” (“QDIA”) (as defined in DOL Regulation section 404c-5) in the IPS for the investment of Assets held in Defaulted Participant Accounts. A Defaulted Participant’s Participant Account will remain invested in the investment strategy the IPS designates as the QDIA until the Defaulted Participant accesses the Interface, agrees to the Participant Terms and Conditions, and selects an alternative investment strategy for the investment of the Assets of the Participant’s Participant Account.

    Client understands that the Products available for inclusion in the Program and Account are determined by Betterment in its sole discretion. Client appoints Betterment to manage Participant Accounts on a discretionary basis and act as Client’s attorney-in-fact with limited power and authority for Client and on Client’s behalf to buy, sell, and otherwise effect investment transactions in the name of the Participant Accounts in accordance with the Plan and fiduciary duties under ERISA. Betterment shall manage Participant Accounts by issuing trading instructions to Betterment Securities to cause the Participant Accounts to purchase and sell Products pursuant to the Plan. Betterment is responsible for placing orders for execution of securities in the Participant Accounts. Client will not be able to place trades in the Participant Accounts.
  3. Proxy Voting. The Plan delegates to Betterment the authority to (i) receive and vote all proxies and related materials for any security held by the Plan; and (ii)  vote on other corporate actions, like tender offers, which do not require a proxy or are not solicited via proxy. Client may request information regarding how Betterment voted proxies for securities held by the Plan. Betterment will vote, or cause to be voted by a proxy voting service, proxies, and shall provide instructions on any tender or exchange offer or other corporate action (including voluntary and mandatory reorganizations, such as mergers, name changes, stock splits and reverse stock splits), in accordance with applicable law, including ERISA. Unless Betterment otherwise agrees in writing, Betterment will not advise Clients or Participants or act for Clients or Participants in any legal proceedings involving securities held or previously held in the Account or the issuers of these securities.
  4. ERISA Bond. To the extent required by ERISA, Betterment will obtain and maintain a bond in compliance with ERISA section 412. For the avoidance of doubt, Plan Administrator is responsible for obtaining and maintaining appropriate fidelity bond coverage for its Plan.
  5. Betterment Fiduciary Status. Client hereby appoints Betterment as an investment manager, within the meaning of ERISA section 3(38), with respect to the Account. Betterment hereby accepts such appointment and acknowledges that Betterment is a Fiduciary with respect to the investment advisory and investment management services provided to the Account pursuant to the Advisory Services Terms. Except where required by ERISA, Betterment may, but does not have any obligation to, review any action or inaction of another Fiduciary with respect to an Account, and Betterment is not responsible for determining whether another Fiduciary's action or inaction satisfies the standard of care applicable to such Fiduciary’s handling of an Account.
  6. Interaction With Other Betterment Accounts. Client acknowledges and understands that a Participant may open, or may already have opened, an account or accounts with the Betterment Entities in addition to a Participant Account under the Plan (e.g., taxable personal accounts or IRA accounts). Such other accounts are not subject to the Services Agreements, and the fees payable with respect to such other accounts are not covered by the fees specified in the Administrative Services Terms. Additionally, if a Participant has opened such other accounts with the Betterment Entities, Betterment may offer certain services that consider all Assets held in all of the Participant’s accounts with the Betterment Entities holistically (including Assets held in the Participant Account under the Plan). If a Participant opts into such services, Betterment may, after considering all of a Participant’s Betterment accounts, choose different Products to facilitate tax loss harvesting or recommend a different allocation for the Participant Account. Accordingly, Betterment may manage the Participant’s Account differently than it would otherwise. 
  7. Account Contributions and Distributions. Client understands and agrees that, subject to applicable law, including ERISA, erroneous contributions will be credited as Plan Assets, and Client will direct their allocation. 
  8. No Guarantee of Performance. Client understands and agrees that the Betterment Entities offer no guarantees of investment performance based on the predictions and suggestions of the investment tools or other advice provided through the Program, or via Supplementary Services. Client represents that Client is aware of and is willing to assume risks involved with investing in the Products pursuant to the Program. None of the Betterment Entities guarantees or makes any warranty of any kind, express or implied, regarding the projections or recommendations generated by the investment tools.