Why Betterment CEO Sarah Levy Isn't Afraid Of Market Volatility
In a small meeting room in digital investment advising firm Betterment's office in Manhattan, chief executive Sarah Levy seems relaxed in a hoodie and sneakers. Just outside the room, a wall-mounted television plays a news broadcast covering the ongoing market volatility as a result of President Donald Trump's new tariff policies.
Two months earlier, Betterment had just acquired the automated business of Ellevest, a robo-advisor focused on women's wealth. It was the fourth and the latest in a string of acquisitions the company had made since Levy assumed her role in 2020. Adding Ellevest to Betterment's coffers boosted its customer count by nearly 80,000 customers, adding more than $2 billion to its assets under management. Then the market lost more than $6 trillion in the first week of April.
Despite the uncertainty playing out on the television outside the meeting room, Levy remains steadfast in her plans. 'I would be more than happy to continue to consolidate in the industry,' Levy says. In other words: There is an estimated $643 billion digital advice market, and Betterment is primed to snap up the fintechs that can help the firm take on Wall Street Goliaths.
So far, her buying strategy has paid off: Betterment has more than doubled its assets under management from $22 billion to $56 billion under Levy's leadership, and has grown from 300 employees to nearly 550 employees. The fintech company has been profitable for two years and surpassed $200 million in revenue in 2024. Aside from the incumbents like Vanguard, Schwab and Fidelity, Betterment is one of the biggest of the digitally native firms. Wealthfront, which has more than $35 billion AUM by comparison (and another $45 billion across other accounts), reached profitability last year and recorded nearly $200 million in revenue.
For all the recent growth, Levy didn't seem like an obvious choice when she was appointed to her role by Betterment founder Jon Stein nearly five years ago. She was coming off of more than 20 years at media conglomerate Paramount Global (then Viacom), where she was chief operating officer at Nickelodeon for more than a decade before taking on the same role at Viacom Media Networks.
Levy, who was listed on the 2022 Forbes 50 Over 50, had spent the better part of her career merging Viacom's cable brands into a single platform – but when Viacom and CBS merged in December 2019, she said it felt like a 'rinse and repeat' of her prior work. It felt like a good time to move on.
Stein, Betterment's then-CEO who founded the company in 2008, was looking for someone with experience in launching and growing plans to help manage the business, a CRO or perhaps a COO. A game of telephone got Stein all the way to Allison Mnookin, a Harvard Business School lecturer who'd been friends with Levy in college. ''I have this crazy idea,'' Mnookin recalls telling one of Stein's board members. 'You're gonna think I'm nuts, because Sarah's not from the industry… but she's got the smarts to be strategic and the curiosity to learn new things.'
Shortly thereafter, Stein met Levy; he remembers feeling an 'instant rapport' with Levy. 'As I got to know her, I became confident she could not only do any job, but she could do my job,' Stein said in an email to Forbes. He wondered if it was time to pass the torch – he had a young family, he wasn't sure if he wanted to be Betterment CEO forever, and he 'was out of ideas of what more to do' as CEO. For her part, Levy hadn't heard of Betterment before she met Stein, and she knew she didn't have experience in the investing industry. Still, the opportunity to grow a retail business into a wealth platform was too exciting to pass up.
'I thought this idea of expanding access to great financial advice was a really exciting idea, but in my mind, it was a brand that was unknown,' Levy said. 'So I thought, here's a great opportunity to build a brand that has great values and an incredible mission.'
Her appointment gave some in the investing industry pause, Morningstar analyst Drew Carter said, because her executive experience had not been in investing. 'Investing is a trust business,' Carter said, pointing out that it's been a bit of a longer road for Betterment as they try to reach customers beyond those who are okay with an advisor that's digital-only. Carter said that the company has, under Levy's tenure, worked to improve its transparency with clients on its investment approach.
Since taking the helm at the digital investment advisor, Levy has expanded the business beyond its robo-advisor roots. She's 'over the term robo,' she says, because 'it puts the wrong idea in people's minds about the services we provide.' Levy has spent time tweaking Betterment's products, too: Since 2020, Betterment has added the option of accessing human advice where needed and expanded its business-to-business services such as solo 401(k)s and mutual funds. It also replaced its expensive and convoluted cryptocurrency offerings with a more focused and cheaper crypto ETF last year.
Levy's peers on Wall Street have been measured in their public statements about the market's tariff-induced swings, though the word 'uncertainty' has been a favored term in April earnings calls. Levy herself acknowledges that her customers are smarting from the whiplash, but she also says that her approach to business strategy is the same as advice to customers – 'by having a balanced portfolio, you weather the storm.'
The company has positioned itself to reap different revenue streams from its products in retail, B2B, and tax savings tools. Automated tax-loss harvesting for individual investors—selling losing assets to offset other investing gains to lower taxes—kicks in during an unstable market, Levy says, making up most of the tremendous amount of trading volume the company has seen just this month alone. The platform has so far recorded $3 billion worth of trading in April, a threefold increase of its typical monthly volume.
Betterment is now gearing up to introduce some new products and features, including a self-directed investing offering that will let customers buy single stocks at their discretion, Levy says—something that could increase the company's competitiveness with brokerages and other trading platforms, like Vanguard and Robinhood.
Despite having never worked directly together, Mnookin credits Levy's leadership so far in the fast-changing markets to her curiosity, a quality of Levy's that she's seen since college. 'There's friends that you love, and they're good people, but you'd never want to work with them,' Mnookin told Forbes. '[Levy] was always one of those who I absolutely would bet a business I cared about on her.'
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