Investing carries inherent risks, yet it is crucial that these risks stem from market conditions rather than brokerage practices. At Betterment, we prioritize your security by implementing a range of measures designed to protect both your account and your investments. This article explores the various strategies we deploy to empower you to manage your finances with confidence.
Account security measures
We have established several foundational practices to enhance the security of your Betterment account. Each of these protocols plays a significant role in safeguarding your sensitive information and ensuring only you can access it.
Two-factor authentication
Two-factor authentication (2FA) acts as an additional layer of security for your account. This method requires not only your usual password but also a secondary verification, such as a code sent to your mobile device. Utilizing an authenticator app like Google Authenticator further enhances this security. With 2FA in place, even if your password is compromised, unauthorized access to your account remains blocked.
Encryption and password protection
When you interact with our platform, whether via our website or mobile app, your data is protected by strong encryption protocols. This means that any information exchanged between your device and our servers is scrambled, ensuring that only authorized personnel can interpret it. Additionally, we use password hashing to transform your password into a unique string, making it virtually impossible for anyone to retrieve, even if our systems were compromised.
Moreover, we advise users to create distinct passwords for third-party applications. This practice ensures that if a third-party service is breached, your primary account remains secure. Some applications may also support the OAuth standard, which allows for secure access without compromising your login credentials.
Investment safety protocols
In addition to securing your account, we prioritize the safety of your investments. Our processes are designed to ensure transparency and integrity in managing your assets.
Transparency in holdings
At Betterment, we believe in transparency, which is why we provide clear and accessible information regarding your investments. You can easily verify your holdings, track every transaction, and view the details of each trade made on your behalf. This includes the number of shares you own, the specifics of fractional shares sold, and their respective proceeds and cost basis.
Independent oversight and fund segregation
To maintain accuracy and trust, we engage independent auditors to routinely review our activities. These auditors cross-check every dollar and share we report against our actual holdings. They also conduct random checks on customer accounts to ensure our internal records align with your statements. Furthermore, we adhere to strict policies to prevent commingling of funds. Your investments are kept separate from Betterment’s operational funds, ensuring that your assets remain secure even in the unlikely event that the company faces financial difficulties.
Additional security features
To further enhance your protection, your investments at Betterment are insured by the Securities Investor Protection Corporation (SIPC). This insurance covers up to $500,000 per customer, which includes a cash claim limit of $250,000. While SIPC insurance does not protect against market fluctuations, it offers a safety net in the event of a brokerage failure.
Taking personal precautions
While we implement rigorous security measures, we encourage you to exercise caution as well. Remain vigilant against suspicious communications, such as unexpected phone calls, texts, or emails, particularly those with unusual URLs or typographical errors. Remember, Betterment will never request your password or 2FA code outside of secure login procedures or when you are modifying your personal details. Always use a strong, unique password for your account to further enhance your security.
We have established several foundational practices to enhance the security of your Betterment account. Each of these protocols plays a significant role in safeguarding your sensitive information and ensuring only you can access it.0