A 401(k) that works for you and your team

Video Transcript

Betterment will help you find the right path for your company.

EDWARD GOTTRFRIED: Traditionally, the plan sponsor acts as fiduciary for the company and all of its employees. The way that Betterment helps to solve that is that we act as the fiduciary, taking that responsibility off of a plan sponsor, and making sure that all of their employees have access to investments that make sense for them.

Betterment is going to do that legwork and provide recommendations on which funds you should be invested in, what risk level you should be invested at to meet your goal, and how much you need to save, and what the most effective places to save are.

Betterment helps employees make better decisions by making it easier and quicker to do the right thing for their retirement.

The majority of people are not sitting around thinking about stocks and investing. It can be overwhelming for them in many cases. And they don't really want to sit around and read prospectuses and put together a risk managed portfolio.

ANDREW WESTLIN: The investments that we use in the Betterment 401(k) are index funds, specifically ETFs or exchange-traded funds.

In our investment strategy, we actually have real humans behind the scenes and investment team that is meeting quarterly to review our strategy as well as our fund selection. They look at a pool of over 8,000 ETFs to select the lowest cost, well-diversified solution that makes sense for our plans.

Are they globally diversified? What are their fees? Are they easy to trade? We will monitor them on an ongoing basis and we'll review the advice that we're giving them on a regular basis as well.

ETFs and mutual funds are pretty similar in the way that they allow us to invest in hundreds or even thousands of different companies very, very easily, but some benefits that ETFs have over mutual funds are that generally speaking, they're going to have less fees or less hidden fees. And they allow us to trade more frequently, which is really great for a lot of our automated investing.

KRISTEN CARLISLE: For millions of people, the 401(k) is the entry point to investing. Betterment is different from an investment standpoint because, first, we set every employee up with personalized advice specific to their needs and financial goals.

Betterment offers a curated selection of investment strategies to avoid that sort of analysis paralysis or overwhelming feeling when making a decision about how to invest.

One of the key things that we found at Betterment is that having a portfolio that an individual is comfortable and confident in investing in leads to greater investment success. So if you have participants who want to invest in socially responsible ways, who are uncomfortable with the idea in investing in oil or gas companies, offering a socially responsible option allows them to not only do better with their investment portfolios, but also do well and be happy and proud of how they invest.

The best part about Betterment is that it brings your goals to life. It takes what ordinarily is this boring, complicated process of choosing investments and takes it down to that personal level.

It's really difficult to navigate having a 401(k) at your company and not only do we couple technology, but a personal touch with that in all of our experiences with our clients and our customers. We put technology at the forefront of that to help you with the difficult things and a personal touch on actually helping you with the emotional side of retirement planning.

Much more than just having a place to invest money, having a Betterment 401(k) is like having a financial advisor who can help your employees set themselves up for success in retirement.