Betterment adds Philadelphia office, fueled by growth and recruiting drive
Digital advice firms are investing heavily in expanding both their human advisor rosters and their physical footprints. Betterment is the latest to expand beyond its roots, deciding on Philadelphia as its second home outside of New York.
The hybrid robo advice firm, which now manages $15 billion in assets for 400,000 clients, will open its new offices by the end of February, according to the company. Betterment also plans to hire 20 new team members by the end of the year.
“We saw this as a great opportunity to take advantage of growing not only in team size, but geographically. We want to be able to tap into new talent pools like the one found in Philly,” said CEO Jon Stein. Betterment currently has 240 employees, according to the company.
The firm scouted several other cities for a second home, including Denver, Austin, Portland, Seattle, San Francisco, Los Angeles, Phoenix and Salt Lake City.
“Philly was an obvious choice for us,” says a spokeswoman at the firm. “Aside from closeness, it's a city that has great schools and excellent, educated workforce. There's a diverse population there of people that we can hire to work in various fields including engineering and customer experience. An added bonus is the cost of living there.”
Other digital advice firms have expanded their footprint, too. Bay Area-based Personal Capital, which recently christened new headquarters in Redwood City, California, also in October opened up offices in Atlanta, adding to its locations in Denver, Chicago, Dallas and New York.
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There’s good reason for the expansion. Robo advisors that intend to keep their independence from established financial services firms have to keep growing — there’s too much competition, according to industry research.
Competitors like Charles Schwab have snatched up $30 billion in assets in the digital financial advice space since launching Schwab Intelligent Portfolios in 2015, according to a 2018 Morningstar report. Vanguard has over $100 billion in assets with its hybrid digital advice offering.
Betterment, with $275 million in funding, is continually seeking advisors to become part of Betterment’s Advisor Network, which refers clients looking for in-person advice. Additionally, the startup, which has 12 advisors on staff in Manhattan, says it intends to hire more at its new office location, although the company did not specify a timeframe.