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Hi. I'm Aaron Weinman. Today, I'm highlighting a deep dive into Betterment, the disruptive startup that pioneered the robo-advisory space. The company set a trend that saw big banks and fintechs pile into the sector.
Now, it's charting a new path, so let's dig into that.
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1. Betterment changed the game for investing in the robo-advisory space. The New York investing startup pioneered the robo-advisory service and opened the door for individuals to manage their money beyond the traditional route of financial advisors.
But deep-pocketed lenders — see UBS' $1.4 billion acquisition of Betterment competitor Wealthfront — and disruptive fintechs now play in the robo-advisory sandbox.
Twelve years in, Betterment is moving away from its roots to further compete with Wall Street peers.
It's staking its future on selling retirement plans to small and mid-sized businesses, and also focusing on financial advisors and their wealth-management firms.
Being called "the robo" was not going to cut it if Betterment intended on being a sustainable business over the long term, Chief Executive Sarah Levy told Insider.
To set itself apart, Betterment is building out business-to-business channels for financial advisors and in the process, fit in with the legacy firms that it once sought to upend.
As it charts a new path, Betterment has experienced a raft of changes, shed some staff, and switched up much of its leadership.
Competition is fierce, but the company nabbed a round of Series F capital in the fall, which valued Betterment at $1.3 billion.
For the full story about the genesis of this robo-advisor, check out this deep dive from Insider's Rebecca Ungarino and Asia Martin.
And here's more on Betterment, the altered landscape of robo-advisory services, and wealth management:
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Betterment's CEO explains why the robo-advice pioneer is buying a crypto startup.
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Why UBS is shaking up its recruitment strategy by expanding where it trains and hires advisors.
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How UBS' $1.4 billion splurge for Wealthfront accelerates robo-advice M&A.
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Merrill Lynch has ushered in changes for its storied 'thundering herd' of financial advisors.
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