Betterment launched a new savings option in 2019.
Trading apps aren't the only ones benefiting from the rise of meme stocks.
Betterment, a digital investment advisor, said it saw record growth in the first quarter of 2021. Despite offering so-called "passive" investing and not allowing clients to hand-pick stocks, Betterment's CEO Sarah Kirshbaum Levy said excitement around GameStop and "gambling" on markets during the pandemic still boosted business.
"What it's done is shine a light on investing generally," said Levy, former ViacomCBS chief operating officer, who took over the role in December. "Strategically, we're very different from other players in the market, but we're a nice complement."
In Betterment's first full quarter with Levy at the helm, its new clients and net deposits grew 116% and 118%, respectively. The firm added $10 billion in new customer assets, bringing its total under management to $29 billion.
The New York-based company was founded by former CEO Jon Stein in 2010, and offers retail investment advice, a platform for independent investment advisers and 401(k) plans for small and medium-sized businesses. Its majority millennial clients use Betterment for "long-term" and "safety-net" investing, and often have more than one account, Levy said.
"They're having fun with someone else for day trading," she said in a phone interview.
Some of Betterment's robo-advisor competitors have seen similar growth this year.
Wealthfront told CNBC it saw the highest number of net deposits on record in March, and crossed $25 billion in assets under management in the quarter.
Investment app Acorns doubled its accounts from the fourth quarter to the first quarter for its best three months on record. Its assets topped $4.5 billion.
Free-trading app Robinhood was at the center of the GameStop controversy amid a short squeeze in the stock, which was partially fueled by Reddit-driven retail investors. Still, it added 3 million customers in January alone, according to estimates from JMP Securities.
Charles Schwab on Thursday said it added a record 3.2 million new clients in the first quarter — more new accounts than in all of 2020. CEO Walt Bettinger credited "heightened market attention to certain names via social media" as one factor that "significantly bolstered trading activity."
Levy, who was also chief operating officer at Viacom's Nickelodeon unit, said she's looking to embrace the stock market's new intersection with social media. Betterment clients should be able to ride the viral stock wave safely, she said.
"We see the evolution of the space, and want people to experiment on the margin without losing their life savings," Levy said. "I worry about volatility — some people aren't going to be able to dump their GameStop shares, and they're going to get burned if they don't have a safety net."
Enjoyed this article?
For exclusive stock picks, investment ideas and CNBC global livestream
Sign up for CNBC Pro
Start your free trial now