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Forbes
21-04-2025
- Business
- Forbes
Why Betterment CEO Sarah Levy Isn't Afraid Of Market Volatility
Sarah Levy in Betterment's New York City headquarters. 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.'
Yahoo
28-02-2025
- Business
- Yahoo
Betterment buys automated investing business of Ellevest
US-based robo-advisor Betterment has purchased the automated investing business of compatriot Ellevest, a women-focused company. As part of the acquisition, Betterment will take on Ellevest's automated investing accounts and assets under management. This transfer will be effective on or about 17 April 2025, contingent on certain closing conditions, with clients having the provision to opt out of the transfer. However, Betterment will not absorb the technology, staff, operations, or additional accounts of Ellevest. Ellevest will continue to provide financial planning and wealth management services, focusing on clients with investments of at least $500,000. Ellevest CEO and CIO Dr Sylvia Kwan said: 'As we focus on our growing wealth management and financial planning business, Betterment was the natural home for our digital-first clients. 'On top of automated investing, Betterment offers features that many of our digital clients have expressed interest in, including joint accounts and other cash account options.' Betterment said that the purchase will offer Ellevest clients access to 'tax-smart' tools, as well as 'diversified' portfolios. Additionally, clients will benefit from a variety of account types, educational resources, planning tools, along with human advisors, further noted the company. The latest deal continues Betterment's expansion, following the purchase of Wealthsimple's US advisory accounts in 2021 and Goldman Sachs' Marcus Invest accounts last year. At present, Betterment caters to over 900,000 customers and manages assets exceeding $55bn. Betterment CEO Sarah Levy said: 'This acquisition further cements our leadership in the digital investing space. 'We look forward to welcoming Ellevest's clients to Betterment and to continuing to support them on their wealth-building journeys.' Ellevest is claimed to be the eighth fastest-growing fee-only registered investment advisor in the US. "Betterment buys automated investing business of Ellevest" was originally created and published by Private Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
