letting customers invest their savings in a carefully-selected blend of stock and bond portfolios which are rebalanced regularly and automatically. The New York City startup is a registered broker dealer and financial adviser. The only fee it charges is a management fee that is about one percent of assets in each account (soon this fee will become tiered so that larger accounts pay a smaller percentage).

Since opening up earlier this year, the service has attracted thousands of customers and millions of dollars in savings. Annualized returns are tracking the S&P 500. Betterment will use the new capital to hire more engineers and rol out new products, such as an IRA. Expect more game mechanics to be introduced into the service as well which will reward people for making smart financial moves.

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Authors: Erick Schonfeld

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