Betterment, the largest U.S. independent robo-advisor, is extending its reach into the B-to-B retirement market through a new partnership with Uber.
Starting today, Betterment will provide Uber drivers in select cities one year’s worth of free service on its investment platform, saving them 15 to 35 basis points – depending on balances – and allowing them to set up a Betterment IRA or Roth IRA account through their driver app.
Drivers will also be able to set up additional retirement and taxable accounts with automated investing, get low-cost investment advice and sync all of their outside accounts with their Betterment account. Eventually they may be able to set up a system to automatically deposit funds from each Uber payment into their Betterment account, according to a spokeswoman.
“We are integrating our platform at scale to seamlessly help hundreds of thousands of driver partners access retirement savings options,” wrote Betterment CEO Jon Stein in his blog about the new partnership.
Stein also noted the similarities between the two Internet-based companies. “Just as Uber is revolutionizing how people and goods move from A to B, Betterment is the largest independent robo-advisor with over 175,000 customers and more than $5 billion in assets under management.” Referring to the earnings of Uber drivers, he wrote, “What better way to invest those earnings than with an automated investing technology like Betterment?”
The Betterment offering is currently available to drivers in Seattle, Boston, Chicago and New Jersey and it’s expected to roll out nationwide later this year, a spokeswoman said. Uber reportedly has more than 300,000 drivers in the U.S. They are independent contractors, not employees eligible for benefits from an employer through a 401(k) or 403(b) plan, so they will be self-funding their Betterment accounts.
The Betterment/Uber partnership is the latest of several new initiatives announced by the robo-advisor. In January, Betterment launched its Betterment for Business 401(k) service, which offiers participants a globally diversified portfolio of index-tracking exchange-traded funds as well as personalized financial advice. As of late July more than 200 firms had signed up for the service for their employees.
In March, Betterment introduced an aggregation feature that links vital data about all the investment accounts belonging to an individual client, even those outside Betterment, on the Betterment platform. And later that month the firm announced its latest and largest round of financing, for $100 million, bringing the total to over $200 million, which increased its valuation to $700 million at the time. Since January 2015, Betterment has more than tripled the number of its customers and quadrupled its assets.
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