Betterment expands Solo 401(k) to advisor networks HUB and Osaic
A paperless, no-setup-fee Solo 401(k) brings the growing self-employed market into advisor workflows without the administrative drag.
Betterment Advisor Solutions is bringing its Solo 401(k) to the large wealth management networks on its platform, with HUB and Osaic among those offering the paperless plan, according to NAPA Net. The plan has no setup fee and is built for a narrow slice of the small-business market: sole proprietors and other small businesses with no employees beyond a spouse.
Betterment's rationale is that the self-employed market is growing while the retirement vehicle that fits it has remained administratively burdensome, difficult for advisors to oversee at scale. By widening the Solo 401(k)'s availability to national partners and advisor networks, the fintech-enabled custodian is offering an automated option that it says makes setup and ongoing administration more straightforward for both advisors and their clients.
Thomas Moore, senior director of B2B partnerships at Betterment, called the self-employed segment a “massive opportunity” that has historically been underserved by “complex, paper-heavy retirement products.” Greg Cornick, executive vice president of wealth management solutions at Osaic, said the collaboration hands Osaic advisors a “competitive, easy-to-use solution” for the entrepreneurs and small business owners they serve.
The interesting wrinkle is what the product does not try to be. Solo 401(k)s are not general small-business plans; add a non-spouse employee and the fit ends. That discipline is why an advisor can deploy this without building a retirement-plan back office. The plan is a wedge product for a segment Betterment expects to keep growing.
For the advisor, the appeal is administrative more than investment-driven. A paperless plan with no setup fee converts a client type that used to mean a stack of forms and an ongoing administrative load into something that can be handled inside existing workflows. If the self-employed market keeps growing the way Betterment expects, that wedge product could become a standard line item on the platform.