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 →"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.
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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.
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