Get the weekly research letter
Companies change their terms quietly. We read every version and catch what actually changed. One email a week on the changes that matter and what they mean. No account.
The policy states that Betterment is authorized by plan sponsors to share plan participant personal information with employer-selected third-party advisors, and those advisors may use participant information both to provide investment services and to market their other services to participants, and may further direct transmission of plan information to additional third parties.
This analysis describes what Betterment's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
This provision establishes a data sharing chain in which plan participant personal information flows to employer-selected third-party advisors based on employer consent rather than individual participant consent, and those advisors may use the information for marketing purposes beyond plan administration.
The updated policy discloses a new Fully Paid Securities Lending program through Apex Clearing, under which Betterment will share customer personal information and account details with Apex if customers choose to participate. The revised terms also establish that generative AI service providers have committed that personal information will not be used for model training. For customers participating in promotional offers requiring offline fulfillment, the policy now explicitly states that personal information including mailing address may be shared with third-party partners. You can review the FPSL Program supplemental disclosures for details about the securities lending arrangement, or choose not to participate in the program.
View change record →Under this clause, 401(k) plan participants' personal and financial information may be shared with advisors selected by their employer, and those advisors may use the information to market their other services to participants. Participants do not individually consent to this sharing; consent is provided by the employer as plan sponsor.
Cross-platform context
See how other platforms handle 401(k) Plan Participant Data Sharing with Employer-Selected Advisors and similar clauses.
Compare across platforms →Monitoring
Betterment has changed this document before.
Receive same-day alerts, structured change summaries, and monitoring for up to 20 platforms.
"Further, if your employer has engaged a third-party advisor to provide advisory and/or investment management services to the 401(k) plan, Betterment is authorized by your employer to share your information with the third-party advisor, and the third-party advisor may use your information to provide investment advisory services or market its other services to you. Your plan's third-party advisor (with your employer's consent) may also direct Betterment to transmit plan information to other third-party service providers in connection with such third-party advisor's services to your 401(k) plan.Excerpt from Betterment's Privacy Policy
1) REGULATORY LANDSCAPE: This provision engages ERISA fiduciary obligations applicable to 401(k) plan sponsors and service providers, as well as Department of Labor guidance on plan data privacy. The SEC and FINRA have jurisdiction over third-party investment advisors who receive plan participant data. GLBA may apply to the financial data shared. CCPA/CPRA may apply to non-GLBA-covered data, though employer-sponsored plan data may benefit from ERISA preemption in some contexts. 2) GOVERNANCE EXPOSURE: Medium. The authorization for employer-selected advisors to use participant information for marketing their other services beyond plan administration is a use case that plan participants may not anticipate and do not individually consent to. Whether this practice is consistent with ERISA fiduciary standards and applicable privacy requirements warrants assessment. 3) JURISDICTION FLAGS: Federal ERISA preemption may limit the applicability of state privacy law rights for plan participants with respect to plan-administered data. However, where state privacy laws apply to non-ERISA-covered data elements, California and other state residents may retain opt-out rights for marketing uses. 4) CONTRACT AND VENDOR IMPLICATIONS: Employer plan sponsors should review their service agreements with Betterment for Business to understand the scope of data sharing authorized and whether restrictions on advisor marketing use of participant data are included. Advisors receiving participant data should confirm their data use practices are consistent with applicable fiduciary and privacy obligations. 5) COMPLIANCE CONSIDERATIONS: Compliance teams should assess whether the marketing use of plan participant data by employer-selected advisors is disclosed in plan documents provided to participants; whether ERISA plan fiduciaries have evaluated this data sharing arrangement under their fiduciary duty; and whether any state privacy law rights survive ERISA preemption for California or other state residents who are plan participants.
This provision establishes a data sharing chain in which plan participant personal information flows to employer-selected third-party advisors based on employer consent rather than individual participant consent, and those advisors may use the information for marketing purposes beyond plan administration.
Under this clause, 401(k) plan participants' personal and financial information may be shared with advisors selected by their employer, and those advisors may use the information to market their other services to participants. Participants do not individually consent to this sharing; consent is provided by the employer as plan sponsor.
No. ConductAtlas is an independent monitoring service. We are not affiliated with, endorsed by, or sponsored by Betterment.