Digital investment advisor Betterment has announced its plans to acquire the automated investment arm of Ellevest, a wealth management and investment company created by and designed for women.
Betterment is the largest independent digital investment advisor in the United States with more than 900,000 customers and manages over $55 billion in assets, according to the company. It grew partially through acquisitions of other investment accounts like Wealthsimple’s advisory arm in 2021 and Goldman Sachs’ Marcus Invest in 2024.
“This acquisition further cements our leadership in the digital investing space,” said Sarah Levy, Betterment CEO, in a statement. “We look forward to welcoming Ellevest’s clients to Betterment and to continuing to support them on their wealth-building journeys.”
Sallie Krawcheck
The former Bank of America and Citigroup executive told American Banker her aim was to provide women with goal-based investing experience and close the gender gap in investing.
“When I recognize women don’t invest as much as men do, the whole industry says it’s because they’re risk averse. Maybe it’s actually because the whole industry is so overwhelmingly male and they’ve built businesses for themselves,”
Betterment, which launched in 2010, is only purchasing Ellevest’s automated investing accounts and assets under management, not any additional accounts or business assets. Ellevest will continue to offer wealth management and financial planning.
Ellevest automated investing accounts are projected to transfer to Betterment mid-April of 2025, barring closing conditions. Customers will be given the option to opt out of the transfer. Sylvia Kwan, CEO and CIO of Ellevest, said in a statement Betterment is “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,” Kwan said. “We built a platform that makes it easy to invest in a way that works for our clients’ needs, goals, and values — and the same is true of Betterment under the leadership of their CEO, Sarah Levy.”
In addition to automated investing, Betterment offers taxable investing, retirement planning, high-yield cash holding options and 401(k) plans for businesses.
Speaking at the event in April 2024, Krawcheck said she sees real opportunity for female investors in the upcoming “great wealth transfer” from boomers, particularly elderly men, to first their spouses and then millennials.
“The reason I feel so bullish about this is when you ask men about the great wealth transfer and you say, who is this going to benefit most? Only 17% of men say it’s going to be women,” Krawcheck said. “And so I feel like the industry certainly is looking the other way and the opportunity to be there for her is significant.”