With a third of Americans lacking any retirement savings, startups and banks are beginning to target small- and medium-sized businesses to offer 401(k) management through robo-advisers. These plans traditionally offer a flat monthly rate for employers while employees pick up any fees associated with building a portfolio through low-cost indexed investments. These robo-advisers span from newcomers to mature businesses and all seek to improve the retirement climate.
Betterment for Business
The New York City-based company, which currently has 200 plan sponsors, is particularly adept at conversion plans, says Cynthia Loh, general manager of Betterment for Business.
“In the first three months that we were in market, approximately 15% of the plans were conversions,” she says. “Over the past three months, almost 40% of our new plans have been conversions, with the largest being $15 million plus.”
Betterment for Business has flexible pricing that is dependent on the number of assets within the plan.