By Andrew Welsch

Wealth management company Betterment said it has acquired Rowboat Advisors, a provider of portfolio management software that specializes in direct indexing, tax optimization, and personalized investing.

Betterment says the acquisition will enhance its platform for independent financial advisors. The company has been working to drum up more business with advisors who use it to help manage portfolios and custody client assets.

President Mike Reust says the addition of Rowboat's technology will allow Betterment to provide direct indexing capabilities to advisors and offer more complex portfolios with varied asset types.

Rowboat founder and CEO Iraklis Kourtidis says his company will be able to help more advisors and their clients by joining forces with Betterment. Kourtidis will join Betterment's engineering leadership team as vice president of portfolio management and report to Chief Technology Officer John Mileham, according to the company.

Betterment, which didn't disclose terms of the deal, is perhaps best known for its robo-advisor that serves retail investors. In February, it grew that business unit through its acquisition of the automated investing accounts and assets managed by Ellevest, the robo-advisor founded by financial-services veteran Sallie Krawcheck to serve women investors. It has $56 billion in assets.

Betterment serves about 600 registered investment advisory firms, and it has been making efforts to enhance its offering for them. Last year, it made mutual funds available in its custom portfolio construction tools for advisors.

CEO Sarah Levy says the key phrase at Betterment this year is "product velocity," meaning the company wants to accelerate product launches for advisors.

Earlier this year it added solo 401(k) capabilities and securities-backed lines of credit. It also recently gave advisors the ability to include single stock positions in client portfolios.

That was a top request from Betterment's advisor clients, says Levy. Being able to support single stock positions enhances the company's offering in two ways, she says. First, it gives advisors more flexibility in how they create portfolios for clients. Second, it also enables advisors to bring to Betterment client portfolios that include legacy stock positions. "It is a meaningful feature that helps advisors bring that tranche of clients over," she says.

Write to Andrew Welsch at andrew.welsch@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 14, 2025 10:00 ET (14:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.