Betterment Faces Class Action Lawsuit Over Cash Sweep Accounts
Action Required: Review cash sweep disclosures and yield arrangements for any automated platforms or third-party custodians currently recommended to clients.
Betterment is facing a class-action lawsuit alleging that the robo-advisor profited from cash sweep accounts that failed to generate interest for clients. This case highlights potential fiduciary risks associated with automated cash management strategies, a critical consideration for advisors utilizing or recommending robo-advisory platforms.
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