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Betterment still sees growth amid volatility

Nicole Sinclair
Markets Correspondent

Robo-advisors have seen their popularity soar in recent years as their tax-efficient, low-cost automated investing strategy appeals to many young investors. But as we approach year seven of the bull market, with the Fed starting to take its foot off the monetary gas pedal, and volatility heightened, what does this mean for these popular services?

Jon Stein, founder and CEO of Betterment, an automated online investing service with $3 billion under management and over 125,000 customers, joined Yahoo Finance to talk about how his business has grown since its launch in 2010 and what he sees going forward.

This week the Federal Reserve raised interest rates for the first time in almost a decade, and concerns remain about global growth, commodity weakness, and a bond market rout. But Stein remains very positive on future growth for his business.

Even during volatile markets, Betterment sees robust growth, Stein says. “Everyone’s talking about volatility this year. It’s top of mind for lots of people,” he says. "When the market is volatile, we see ourselves growing at 85% of our normal rate.”

And as we approach the end of the year -- also a prime time for financial New Year's resolutions -- Stein emphasized the importance of goal-based investing as a focus for his platform. “Goals are excellent for keeping what you’re saving for in mind,” he says. “One of the most important things we can do for people when it comes to investing is helping them make better decisions.”