Betterment Experiences Blockbuster Expansion Amid Interest In Meme Stocks
Online investment adviser Betterment experienced blockbuster growth in the first quarter of this year, indicating that trading apps aren’t the sole beneficiaries of the rise of so-called “meme stocks,” CNBC reported on Friday (April 16).
Betterment’s new clients increased by 116 percent, while its net deposits expanded by 118 percent in its first complete quarter, with CEO Sarah Kirshbaum Levy leading the firm.
Levy said that interest surrounding GameStop and “gambling” on markets amid COVID-19 increased business, but CNBC noted that the company provides “passive” investment and doesn’t let customers choose their own equities.
“What it’s done is shine a light on investing generally,” Levy said, as per the report. “Strategically, we’re very different from other players in the market, but we’re a nice complement.”
Beyond Betterment, digital investment adviser rivals have also experienced growth in 2021.
In terms of more traditional investment platforms, Charles Schwab recently said it brought on a blockbuster of 3.2 million new customers in Q1 — that was a greater number than new accounts for last year as a whole.
Walt Bettinger, Charles Schwab president and CEO, said that one reason behind “significantly bolstered trading activity” is the “heightened market attention to certain names via social media,” as per the report.
In separate news, robo-adviser service BangNiTou, which is backed by Ant Group and Vanguard, has reached the 1 million user mark.
BangNiTou means “help you invest,” and the service is reportedly the most popular fund investment service in China. The firm’s minimum investment of 800 yuan (approximately $122) also assisted in engaging users.
The firm works by suggesting a portfolio chosen from 6,000 mutual funds once evaluating a user’s comfort with risk and investment aims.
The robo-advisory market in China is formidable, forecasted to reach $1.1 trillion by 2027. The interest has led traditional financial institutions and many FinTech startups to begin looking at ways to enter the market.