Betterment has launched an “all-digital” solo 401(k) solution for independent financial advisors and their self-employer clients, complementing its employer-sponsored retirement planning solution, Betterment at Work.
“The solo 401(k) is one of our most requested new products, and we are thrilled to launch a solution tailored to this market,” Thomas Moore, head of Betterment Advisor Solutions, said in a statement. “Self-employed owners have traditionally been underserved by retirement products, and this innovation closes the gap for them and the advisors who serve them.”
For self-employed individuals, solo 401(k)s offer various advantages, according to Betterment. These include tax breaks, investment flexibility and loan options. But such plans can also be burdensome and time-consuming to set up using traditional, paper-based approaches. There are also key compliance considerations that arise in the operation of solo 401(k)s.
To address this issue, Betterment’s solo 401(k) delivers a fully digital experience for both advisors and clients. Features of the platform include paperless account opening, no setup fees, digital contribution processing, cost-free spousal participation and Roth-style account options.
The firm says the solution will benefit advisors by giving them a tax-advantaged saving option while also benefiting their businesses, as more than 80% of growth-oriented advisors manage 401(k) plans, according to Betterment surveys.
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