If Betterment were to go public or be acquired, you would maintain complete control of your brokerage account. All the underlying securities in your Betterment portfolio are owned by you; you would be free to add, withdraw or transfer your funds at any time.

In the unlikely event that Betterment were to close, your money would remain safe, and you would simply choose a new home for it.  Betterment’s own corporate funds are completely separate from your customer-owned money at all times, and Betterment is not allowed to use your money to pay for its operations or take any actions other than investing for you. You own all the underlying securities in your Betterment portfolio, and if you close your account, your money will be transferred back to your linked checking account. If we were to close, the funds would then be transferred to the broker of your choosing.

Furthermore, Betterment accounts are also SIPC-protected (up to $500,000 per account type) against losses resulting from the failure of a broker-dealer. Unlike FDIC insurance for banks, SIPC does not protect against losses due to normal swings in the market. An explanatory brochure is available at http://www.sipc.org

Please note that $500,000 is the standard amount that SIPC offers for investment companies. However, also note that this amount is specific to each account type. If you open one or more of the following accounts with us, each of these comes with $500,000 in SIPC protection per account:

1) Traditional IRA
2) Roth IRA
3) Trust account
4) An account solely under your spouse’s name
5) A Traditional IRA under your spouse’s name
6) A Roth IRA under your spouse’s name
7) A joint account
8) Taxable investment account

While SIPC insurance is an important source of reassurance for investors, it only applies in cases where securities belonging to customers become unaccounted for during a wind-down. We’re subject to intense, routine scrutiny from our regulators, specifically to ensure that customer assets are segregated from the broker dealer’s assets, and are always available. 

If we were to wind-down, SIPC would step in and return all customer assets in our possession - not just assets up to $500,000. The insurance covers scenarios where those assets are not available, but we have instituted a number of internal and external controls that ensure that SIPC insurance won’t need to come into play should there be a wind-down. 

To provide a concrete example of how this coverage works: if your account contained $1,500,000 and $1,000,000 were recovered, your holdings would be made whole by SIPC, since the unaccounted amount is $500,000 and covered by the limits of SIPC.

You can also read more in-depth about the safety and security of your account in the following article:  Your Security and Trust Come First