Just two weeks after announcing a partnership with
"Crypto Investing by Betterment" is now live, adding four managed cryptocurrency portfolios to traditional investing portfolios on the platform. The new offerings are available to both retail customers and advisors. Betterment has more than 730,000 customers.
In a twist for industry, Betterment recommends that customers limit their crypto exposure to no more than 5% of their investable assets. But the robo-advisor won't force them to.
"We are excited to introduce a crypto product that helps to simplify this emerging asset class," Betterment CEO Sarah Levy said in a statement. "Expert-built portfolios, coupled with educational content, will guide interested Betterment customers into digital assets. Our aim is to be a trusted partner to our customers and empower them to make crypto a part of their long term investing strategy."
Crypto Investing by Betterment includes four crypto portfolios with different focuses:
Universe: A collection of cryptocurrencies including established coins like Bitcoin and Ethereum. Betterment says the portfolio offers broad exposure across the crypto landscape from decentralized finance to the metaverse.
Sustainable: Includes cryptocurrencies that transact sustainably or those on networks with a path to sustainability, like the newly transitioned Proof of Stake Ethereum.
Metaverse: Focuses on cryptocurrency projects currently building a network of immersive digital experiences and new approaches to digital commerce, including real estate, gaming and entertainment.
Decentralized Finance: Provides exposure to assets leveraging blockchain technology to offer financial services without the need for banks or other centralized institutions.
Financial advisors and retail investors will also have access to evolving information on the asset class via an educational resource center, a bi-weekly crypto newsletter and regular commentary from Betterment experts.
The offering "represents the next phase in providing customers more investing choice," a company statement said. "The addition of four crypto portfolios follows on last year's introduction of an innovative technology portfolio. The new sustainable crypto portfolio builds on the three socially responsible portfolios that have become popular options for Betterment customers."
Betterment's offerings are the latest in a flurry of moves by some of the biggest names in fintech and financial services to set up shop in the digital assets space.e. Last week,
Chicago-based Envestnet also pulled back the curtain on plans for an educational partnership with Anthony Pompliano, the founder of Pomp Investments and cryptocurrency recruitment firm Inflection Points.
Nikhil Sharma, the head of
"Their stated 5% position limits place meaningful guidance around what some consider a higher risk investment, and keep even ambitious clients focused on their long term financial plans," Sharma said in an email to Financial Planning. "Betterment's approach has been leading with advice vs. products. It will be interesting to see how they incrementally enhance the crypto offering into their holistic financial planning suite."
Sharma added that despite significant client demand, advisors haven't had many platforms to support crypto integration into the wider suite of wealth management services.
"Betterment is bridging the gap by competitively positioning advisors to deliver on this demand and provide advice on this volatile asset class," Sharma said.
Thomas Leahy, a senior financial analyst of Condor Capital Wealth Management, said that Betterment's cryptocurrency option is a natural evolution for a platform that tends to cater to younger investors.
He said that instead of forging a separate relationship, Betterment's add-on option gives customers access to crypto investing alongside low-cost ETF portfolios and financial planning under one roof.
"The fact that clients are encouraged to hold no more than a 5% allocation is a welcome piece of advice as long-term retirement goals can be thwarted by the allure of short-term speculation," Leahy said in an email. "Meanwhile, if robo-advisors turned a blind eye to this asset class, younger investors may feel the fear of missing out and therefore be driven to online brokerage platforms that do not have these guidelines in place.
"For example, the fact that Betterment offers live human advice and digital financial planning tools can help those with crypto in their portfolios keep this volatile investment in the right context, their retirement."
Editors note: This story has been corrected to clarify that Envestnet is launching an educational partnership with Anthony Pompliano.
