Betterment is acquiring the automated investing accounts and assets managed by Ellevest, a robo-advisor founded by financial services veteran Sallie Krawcheck to serve women investors.
The transaction does not include additional accounts, technology, employees, or operations, according to Betterment’s announcement on Wednesday. Terms of the deal were not disclosed.
This acquisition highlights the ongoing consolidation in the robo-advisor sector, as some firms have exited the space due to challenges in scaling and sustaining growth.
Accounts will transfer to Betterment on or around April 17, though Ellevest clients have the option to opt out. Ellevest will continue offering financial planning and wealth management services to high-net-worth individuals, families, and institutions with investable assets of $500,000 or more.
David Goldstone, manager of investment research at Condor Capital Wealth Management, notes that Ellevest’s move to retain private wealth clients while divesting its robo accounts signifies a shift toward a traditional advisory model. “Because low-asset accounts generate small amounts of revenue, reaching scale is critical to serving these clients profitably,” he says. “Robo-advisors are built for scale, but achieving sustained growth remains challenging in a competitive market.”
Ellevest’s most recent Form ADV filed with the SEC reported over $2.1 billion in assets under management across more than 70,000 clients. Goldstone points out that these assets were roughly evenly divided between high-net-worth and non-high-net-worth clients. “With 70,000 non-high-net-worth clients representing $1.1 billion in AUM, the average account size is just $16,000,” he says.
Betterment, in contrast, serves more than 900,000 customers and manages over $55 billion in assets. “This acquisition further cements our leadership in digital investing,” says Betterment CEO Sarah Levy. “We look forward to welcoming Ellevest’s clients and continuing to support them on their wealth-building journeys.”
In December, Krawcheck announced she was stepping down as CEO of Ellevest, citing health reasons. She remains on the company’s board, with Sylvia Kwan stepping in as CEO while also continuing her role as CIO.
“As we expand our wealth management and financial planning services, Betterment was the logical home for our digital-first clients,” Kwan says. “Beyond automated investing, Betterment offers features that many of our clients have requested, including joint accounts and other cash management options.”
Betterment, a pioneer in the robo-advisory space, has built its reputation on offering professionally managed portfolios at a fraction of the cost of traditional financial advisors. The firm’s standard service charges an annual management fee of 0.25% of assets under management.
Despite robo-advisory’s appeal to investors, many firms have struggled to achieve scale and profitability. Over the past decade, several have folded or been acquired. Large banks such as JPMorgan Chase have exited the pure digital advice space. Betterment has capitalized on industry consolidation, acquiring Wealthsimple’s U.S. advisory accounts in 2021 and Goldman Sachs’ Marcus Invest accounts in 2024.
Beyond retail investors, Betterment is expanding its presence in two other areas: workplace retirement plans and services for registered investment advisory (RIA) firms. This diversification aims to strengthen Betterment’s market position as it continues to evolve in the digital wealth management space.
