Betterment CEO Sarah Levy joins 'Influencers with Andy Serwer' to discuss the growing popularity of digital investing.

Video Transcript

ANDY SERWER: Sarah, how do you think we strike the balance between democratizing investing and then protecting retail traders from themselves?

SARAH LEVY: Well, that is the multi-billion-dollar, or perhaps trillion-dollar, question. You know, I think what's a little bit, you know, disheartening is the notion that retail traders, you know, don't understand-- many of them don't understand how difficult it is over the long term to make money, you know, picking stocks. And they don't necessarily understand the asymmetry of information and the idea that people who do this professionally do have a tremendous amount more information than they do.

Now, there are some things that technology has, obviously, advanced in terms of, you know, day traders' and investors' ability to sort of band together to drive outcomes. But the notion that you're always going to be at sort of the right moment in that, you know, groupthink, I think, is unlikely.

And so it seems to me that there is likely to be more regulation and that the government in particular could do a better job of education. And so I think where we at Betterment think we can be helpful is through education and guidance.

You know, we don't plan to be a platform for day trading. But I do think we can be a platform that is empowering with information. And so the hope is that, over time, you know, investors will get burned in ways that are not catastrophic, but that teach them important lessons about how to balance your long-term safety net, for example, with your play money and gambling. And I think it is in that dichotomy that they'll get the best outcomes.

ANDY SERWER: Yeah. I want to ask you a little bit more about regulation. Do you feel that the pressure to regulate fintech is coming mostly from legacy companies or are there legitimate questions? And what do you think the SEC is going to end up doing here?

SARAH LEVY: It's really hard to predict. I mean, I think at the end of the day, it's-- I think at the end of the day, you know, we need the process to play out. And I'm not really a prognosticator on these things.

I think that the biggest challenge is making sure that the regular investor does not get hurt by the system and the tools available to them. You know, there are complex tools being put in-- you know, in the hands of many. And, you know, just like power tools, right, we wouldn't expect anybody to be able to use a nail gun, right? I mean, it's sort of a similar concept that, you know, with training comes better outcomes.

And so I think training and education are the pathway. And by the way, I do think the government could play a hand in helping to require more of that education. But beyond that, I can't really predict the specifics because this is really complex. And it's evolving incredibly quickly.