Betterment, the digital investment platform, has acquired Rowboat Advisors, a provider of portfolio management software with capabilities in direct indexing and tax optimization.
The acquisition strengthens Betterment's technology platform, according to the announcement, expanding its range of investment and client service tools used by RIAs via Betterment Advisor Solutions.
“This marks a significant step forward in our mission to empower advisors with modern, automated investment tools,” Sarah Levy, CEO of Betterment, said in a statement. “Rowboat brings exceptional talent and cutting-edge technology that will help us unlock new dimensions of tax-aware, customizable investing at scale.”
Integration of Rowboat’s tax-smart investing capabilities into Betterment Advisor Solutions is expected begin in the second half of 2025, with the full direct indexing solution to follow in 2026.
As Levy noted, direct indexing and tax-aware investing capabilities are in high demand by growth-oriented RIAs serving clients across the wealth spectrum. To that end, she said, the deal reflects Betterment’s focus on expanding product capabilities for advisor clients and follows a series of product launches earlier this year, including Solo 401(k) plans and securities-backed lines of credit.
Once full integration is achieved, advisors will be able to manage portfolios across a wider range of securities, building on Betterment’s growing ETF and mutual fund universe. They will also be able to run sophisticated simulations and use critical data to enact enhanced rebalancing, implement tax-loss harvesting, make tax-smart portfolio transitions, and improve asset location and intelligent withdrawals.
“Betterment is the platform for advisor-focused innovation,” said Iraklis Kourtidis, founder and CEO of Rowboat Advisors. “We saw a unique opportunity to join forces with Betterment's infrastructure, helping more advisors access the powerful tools they need to best serve their clients.”
Following the acquisition, Kourtidis will join Betterment's engineering leadership team as vice president of portfolio management, reporting to John Mileham, the chief technology officer.
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