Modeled on its retail investment model, the platform is built exclusively with low cost, non-proprietary exchange-traded funds. All told, the firm now manages nearly $4 billion for 150,000 clients.

Cynthia Loh, general manager of Betterment for Business, told BenefitsPro that more than 100 sponsors have adopted the platform.

"We're seeing incredible traction from employers who believe that their employees deserve a better 401(k)—one that is customized for individual retirement goals," said Loh in an email.

"Simply put, too few people have access to a 401(k) with advice. The small to medium size market has been traditionally underserved," added Loh, noting Form 5500 data that shows there are 10,000 401(k) plans with assets between $5 million and $25 million with fewer than 100 participants.

"That's a significant segment of the population, and they deserve advice. On top of that, these employees are often paying too much, without understanding the layers of fees they are being charged."

Loh named three sponsor clients—Boxed, Estimize, and Stockwits—each relatively new companies with large portions of millennials among their employee base.

"With the pending DOL rule, it's going to be even more important for plan sponsors to take a closer look at the 401(k) plans—the reasonableness of fund fees, appropriate fund selection, and the product and service value they are receiving," said Loh.

In a previous interview, Betterment founder Jon Stein said sponsors with at least $1 million in assets are not charged any upfront fees. Participants will pay between 10 and 60 basis points, depending on plan size.

The 2015 edition of the 401(k) Averages Book reported that participants in micro plans with less than $2.5 million in assets pay an average of 144 basis points in fees.

And 2014 data from Deloitte Consulting and the Investment Company Institute found participants in plans with $10 million in assets paid 127 basis points on average; plans with up to $100 million averaged 82 basis points, and plans with over $500 million in assets averaged 37 basis points.

Adoption of low cost ETFs have catapulted in the retail market, but their intrductions has been slow in the 401(k) space. Charles Schwab launched an ETF laden 401(k) platform in 2014.

Loh said incumbent 401(k) providers have been reluctant to offer ETFs for structural and revenue reasons.

"The traditional recordkeeping systems were build 20 to 30 years ago, prior to ETFs gaining widespread popularity," explained Loh.

"The main difference between ETFs and mutual funds from a structural standpoint is that they allow for intra-day trading–traditional recordkeeping can't handle this," said Loh.

"For incumbent stakeholders, the way they have been paid previously is through revenue share classes in mutual funds – we don't allow this in ETFs either.  Why would a traditional player agree to get their piece of the pie cut out," she added.