Betterment CEO Sarah Levy on crypto, first principles, and scaling fintech

Executive overview

Betterment, the largest independent digital investment advisor, acquired crypto platform Makara to extend its diversification-first philosophy into digital assets. Sarah Levy, who became CEO during the pandemic, is shifting the company from product-led to brand-led — expanding into financial wellness while holding to core investing principles.

Active trading tools democratised finance; now the real opportunity is making passive investing emotionally engaging.

Entering crypto through diversification

• Betterment resisted crypto until convinced the asset class was permanent
• Makara replicates Betterment's model: diversified, long-term, registered investment advisor
• Existing ETFs track futures, not underlying currencies — still a single-coin bet
• Over 17,000 digital assets make individual selection impractical for retail investors
• Makara was first in-market player combining diversification with fiduciary status

Robo-advising vs. active trading

• Betterment pioneered democratised finance: digital tools for lower-asset-threshold investors
• Mobile era gave rise to self-directed, gamified investing — an extension of the same access story
• More money has moved to digital platforms overall, whether self-directed or passive
• Core principles remain: dollar-cost averaging, early starts, diversification, long-term hold
• Evolution: passive investing paired with shareholder activism (climate, social equity) — not at odds

Succeeding a founder and scaling operations

• Founder John Stein was product-led; Levy's focus is brand-led — customer experience, sales, operations
• Betterment's 401k product was well-built but lacked sales and operational infrastructure to scale
• Great Resignation surfaced demand: small businesses need benefits differentiation to compete for talent
• Student loan debt is the top reason employees skip 401k participation — Betterment is addressing it
• Financial wellness package links 401k, retail investing, and holistic employee financial health

Socially responsible investing

• SRI entered Betterment's offering in fall 2020 with a clear first principle: no performance trade-off required
• Greenwashing and vague definitions are real; Betterment's answer is to source the best available products dynamically
• Partnership with Engine No. 1: VOTE ETF takes activist positions inside "bad" companies rather than excluding them
• Collective assets used to drive corporate behaviour change — an emerging, scalable vector
• SRI is attracting more women and diverse investors to the platform

Lessons from big company to startup

• Large public companies are constrained by legacy businesses and cash-generating cores
• Startups have no past to protect — every idea looks forward
• Communication process is the biggest gap: information flow breaks down as teams grow
• Power dynamics in any industry can breed bad choices; media's glamour amplifies the risk