DOL Fiduciary Role Players

In response to: InvestmentNews’ Fidelity’s approach to DOL fiduciary rule rankles some 401(k) advisers

With the DOL fiduciary mandates effectively going into action, with a formal government action, financial service providers have begun to solidify their stances.

The question a provider asks themselves – Do I want to be a fiduciary to the plan sponsor and/or the participants?  Now, if you’re a provider that works with financial advisors and their clients, the answer is not black or white.

401(k) plans have been around nearly 40 years. During that time, they have been sliced one thousand ways, centering around different value propositions of the respective firms.  And for those of us that have spent a career working with financial advisors, we all know each advisor is unique in how they want to service their clients.

However, in lieu of the impending DOL fiduciary rule, some of the largest providers in the space have taken it upon themselves to push past their financial advisory network and strong-arm plan sponsor into a fiduciary offering that may not align with the advisor of record on the plan, nor the plan sponsor’s preference.  Firms have gone as far as sending 60-day negative consent letters to plan sponsors, whereby the they will be the named fiduciary for the plan sponsor as well as their employee participants.

Now, it can be applauded that firms taking this approach are looking out for their plan sponsor and participant clients.  But, where does that leave the advisors who want to help facilitate these important roles in the relationship?

There is still a lack of clarity about how far the “implemented” DOL fiduciary standards will go, but it is clear that the best interest of all parties will be front and center.  Many advisory firms have built their practices around this, dating back long before the DOL stepped in, simply to be pushed aside by their “partner” record-keeping and custodial providers, who want to play that role instead.  This will leave many advisors displeased, scrambling to articulate where they stand in their plan sponsor client relationships.

We believe that advisors should be enabled to play the roles in their client relationships where they feel they add the most value to their clients.  If s/he feels value is driven by the fiduciary services provided, and s/he wants to provide that service, that should be encouraged.  If the value prop is around investment selection, education, or advice, then they should provide that.  As the rule solidifies, and advisors get more comfortable with the new regulations, we will see increasing numbers of advisors offering fiduciary services to their list of client value add.

To encourage growing and enabling advisors, providers need to remain flexible around their platform and service capabilities.  The DC/DB plans need to be configured to compliment the services and advisor wishes to provide.  When servicing advisors, plan sponsors, and participants, we emphasize to advisors to think of us as an extension of their firm.   They provide the services they want to provide, and we round out the rest, as fiduciary or otherwise, acting as their technology and business support.

Just as the industry is constantly evolving, so are advisors.  We, as technology and services providers need to be there to equip advisors for the future of their businesses. 

Aaron Schumm interviewed on WealthManagement.com


Vestwell’s CEO, Aaron Schumm, was recently interviewed for an article about Vestwell at WealthManagement.com. Preview the article below or read the full story on their site.

“When Josh Brown, the CEO of Ritholtz Wealth Management and author of the popular finance blog, “The Reformed Broker,” hosted the 2017 Benzinga fintech awards, he name-dropped Vestwell as a company with the potential to radically change the wealth management industry.

That’s right, Vestwell, a company looking to make it easier and more cost-effective for registered investment advisors to design, sell and administer 401(k) and 403(b) plans using digital automation. What exactly does Brown find so revolutionary?

“I get most excited about fintech when it solves a serious pain point for a practitioner like myself. It’s not like I’m saying they’re doing something that no one has ever done before,” Brown told WealthManagement.com. He added that his firm got started in retirement plan space a year ago, and is considering adopting Vestwell for some of their clients. But Brown thinks the user experience of Vestwell is such an upgrade over incumbent platforms that it could attract swahs of new advisors to the $6.8 trillion dollar defined contribution market currently dominated by large financial institutions.”

Read More at WealthManagement.com

Vestwell Expands Team with Paul Newmann as Vice President of Sales

NEW YORK, June 1, 2017 – Vestwell announced today that Paul Newmann joined the company as Vice President of Sales. In this role, Newmann is responsible for implementing business development strategies and goals with financial advisors. In addition, Newmann is tasked with defining sales processes that drive desired sales outcomes as well as identifying improvements where and when required.

“I am thrilled to be a part of Vestwell’s mission to provide affordable retirement products to America’s workforce,” said Newmann. “Vestwell’s hyper-growth traction with advisors and their plan sponsor clients is a testament to the long-delayed innovation the retirement industry has needed. Having centered my career around working with advisors and their plan sponsor clients, it’s exciting to be part of a team that is revolutionizing the advisor-driven financial services industry.”

Prior to joining Vestwell, Newmann served as the head of advisor and channel distribution for the Betterment for Business retirement platform. In this position, he sourced new business for the company’s retirement plan products and oversaw strategic sales operations. Prior to that, Newmann was VP of sales for Mesirow Financial where he worked with the industry’s largest recordkeepers, B/Ds, RIAs, and Asset Managers to drive adoption of 3(21) and 3(38) fiduciary services for retirement plans. Newmann started his career at the communications firm FleishmanHillard as an account supervisor responsible for business development, client relationships and account management for a portfolio of financial services and investor relations clients.

“We are excited to welcome Paul to the Vestwell team. A large part of our early success is backboned by the great talent we have brought together. Paul’s talents are purely additive to Vestwell and our future clients,” said Vestwell CEO Aaron Schumm. “As we strategically build out our sales division, adding leaders like Paul, we will increase our outreach to financial advisors in need of low-cost, simplified retirement solutions.”

Things to Consider Before Deciding on a Multiple Employer Plan (MEP)

Vestwell’s VP of Business Development, Elsa Chan, recently wrote an article about the important choices that companies face when selecting a retirement plan.

With MEP resurfacing as PEP in a recent legislation proposed by Rep. Vern Buchanan (R-FL), a lot of advisors have asked me about MEP. I wrote this blog to open a dialogue with advisors and other industry stakeholders who are considering a MEP/PEP.

History of MEP
One-third of Americans have $0 saved for retirement. As many as 76 million people work for companies that don’t offer retirement benefits, according to the Employee Benefits Research Institute. Yet according to AARP, workers are 15 times more likely to save when they have access to a retirement plan.

Read the rest of the article on LinkedIn

Vestwell on WealthManagement.com

Aaron was recently inverviewed for an article on WealthManagement.com

Aaron Schumm, CEO of New York City-based Vestwell, believes retirement plans are an underserved market from a fintech perspective. He describes his company’s mission as “breaking down the friction points” that can develop in advisors’ work with plan sponsors. Those friction points include legal liabilities, costs and the cumbersome nature of designing and monitoring a plan, he says.

Besides working with 401(K)s and 403(b)s, advisors using Vestwell’s platform can propose, implement and manage custom cash balance plans and custom profit-sharing. Plan proposals start with advisors inputting details they’ve received from the plan sponsor, including the plan adoption agreement, employee census and other information from the sponsor’s Form 5500. The goal is to “design a plan that ensures all protected plan provisions are covered on their behalf, and will incorporate the services that will either meet or exceed what’s being offered today,” Schumm explains. The proposal includes a side-by-side comparison of the current and proposed plans; advisors can send the proposal through Vestwell’s platform and use online conferencing to discuss it. Vestwell’s target market is small- to medium-sized plans, says Schumm, although that audience could expand to the $25 million-plus plan size market as the firm adds features and functions to its service.

Read more

Zainab Noorali named Client Success Manager

NEW YORK, NY, March 27, 2017 – Vestwell announced today that Zainab Noorali joined the company as Client Success Manager. In this role, she is responsible for customer portfolio development as well as retention and expansion with the firm’s top advisors and plan sponsor clients. In addition, Noorali is tasked with cross-company collaboration with various departments, ranging from sales, marketing, product development, technology, and operations.

“The retirement industry is ready for a change,” said Noorali. “Vestwell is disrupting the market with an innovative platform and I couldn’t be more excited to join the team and be a part of the journey.”

Prior to joining Vestwell, Noorali served as retirement product sales strategy manager at Empower Retirement and oversaw the participant experience while building relationships with plan sponsors and advisors. She started her career at JP Morgan as an asset management analyst, and most recently served as financial education consultant where she trained employees on product offerings for institutional clients.

“With over 10 years’ experience in the financial services and retirement industry, we’re excited to welcome Zainab to the Vestwell family,” said Aaron Schumm, CEO and founder of Vestwell. “As our company continues to rapidly develop and expand, Zainab’s experience exemplifies the type of talent that we’re recruiting to service our clients.”

Vestwell is the industry’s first and only fiduciary, white-label retirement platform for the financial advisor community and beyond. For more information about Vestwell or to inquire about how your RIA can leverage the platform, please visit: http://www.vestwell.com/.

About Vestwell Holdings, Inc.

Vestwell Advisors, LLC, a 3(38) and 3(21) SEC registered investment advisory firm, is a wholly owned subsidiary of Vestwell Holdings, Inc., specializing in 401(k), 403(b) and other defined contribution and benefit retirement investment management services. Built by an experienced team with an average of 18 years of financial technology experience and led by CEO Aaron Schumm, Vestwell assumes 3(38) investment management and ERISA3(16) fiduciary responsibility on the behalf of advisors and their plan sponsor clients. Learn more at Vestwell.com and on Twitter @Vestwell.

This is not an offer, solicitation, or advice to buy or sell securities in jurisdictions where Vestwell Advisors is not registered. An investor should consider investment objectives, risks and expenses before investing. More information is available within Vestwell Advisors’ ADV.  There are risks involved with investing. Investors should consider all of their assets, income and investments. Portfolios are subject to change. All opinions and results included in this publication constitute Vestwell Advisors’ judgment as of the date of this publication and are subject to change without notice.

Media Contacts:
Jessica Torchia
917-636-4804
Jessica.Torchia@ficommpartners.com

Vestwell Announces Debut White-Label Partnership with Kovack Advisors, Inc.

Fully-Automated 401(k) Platform Provides Added Legal Protection Ahead of DoL Rule’s April Compliance Deadline

NEW YORK, NY — NOVEMBER 15, 2016 — Vestwell, the industry’s first and only fiduciary, white-labeled retirement platform for the RIA community and beyond, announced today that it has secured an advisory firm partnership with Kovack Advisors, Inc, an SEC registered investment advisor. Vestwell’s retirement plan management solution will be offered through The Kovack Choice 401(k).

Vestwell’s digital platform combines the best parts of automated investing with a human touch. In addition to allowing for automatic plan testing and enrollment of plan participants, and generating fully-compliant notices and agreements, the product suite includes investment services, trading, administration, custody, recordkeeping, and trustee services. Vestwell can also act as 3(38) and 3(16),taking on as much of the fiduciary responsibility as is allowable by ERISA and reducing legal liability related to retirement plan asset advisement.

“Advisors are concerned about the U.S. Department of Labor’s ‘fiduciary’ rule and want to reduce their risk of non-compliance. At Vestwell, we take on that risk on behalf of both advisors and plan sponsors, while also delivering a turnkey, time-saving solution that boosts efficiency to make offering retirement plan services good business again,” said Aaron Schumm, CEO of Vestwell. “We’re thrilled to be partnering with such a forward-thinking, industry-leading firm like Kovack Advisors on our white-label platform with them.”

“At Kovack Advisors, we are dedicated to providing our clients and affiliated advisors with the latest technology to both enhance our service offerings and quickly adapt to the latest DoL rules and regulations,” said Chris Mills, Executive Vice President of Kovack Advisors, Inc. “Vestwell’s innovative retirement platform retirement plan management solution makes it possible for advisors to offer defined contribution plans again, even if they previously shied away from them because of the hassle and risk of previous solutions.”

The Kovack Choice 401(k) platform is currently available to select advisor clients and will be available to all Kovack Advisor Inc.’s clients in the fourth quarter. For more information on Vestwell or to inquire about a white-label platform, please visit: http://www.vestwell.com. For more information regarding Kovack Advisors go to www.kovackadvisors.com and/or advisorinfo.sec.gov.

About Vestwell Holdings, Inc.

Vestwell Advisors, LLC, a 3(38) and 3(21) SEC registered investment advisory firm, is a wholly owned subsidiary of Vestwell Holdings, Inc., specializing in 401(k) and other defined contribution retirement investment management services. Built by an experienced team with an average of 18 years of financial technology experience and led by CEO Aaron Schumm, Vestwell assumes 3(38) and 3(16) fiduciary responsibility on the behalf of advisors and firms. Learn more at Vestwell.com.

This is not an offer, solicitation, or advice to buy or sell securities in jurisdictions where Vestwell Advisors is not registered. An investor should consider investment objectives, risks and expenses before investing. More information is available within Vestwell Advisors’ ADV.  There are risks involved with investing. Investors should consider all of their assets, income and investments. Portfolios are subject to change. All opinions and results included in this publication constitute Vestwell Advisors’ judgment as of the date of this publication and are subject to change without notice.

Vestwell Debuts Industry’s First Full-Fiduciary, White-Labeled Retirement Platform

Receives $4.5 million to create transparent, accountable, and automated 401(k) and defined contribution platform that gives financial advisors the ability to better service employers and employees.

NEW YORK, NY — SEPTEMBER 20, 2016Vestwell, the industry’s first and only full-fiduciary, white-labeled retirement platform for the RIA community and beyond, emerged from stealth mode today and announced $4.5 million in funding. The seed round of financing was led by FinTech Collective, with participation from F-Prime Capital, Primary Venture Partners and Commerce Ventures.

“Retirement savings is a $25 trillion market opportunity which we think is still best served by financial advisors. Vestwell’s mission is to provide advisors with a modern platform which reduces fees, increases transparency, and ensures compliance in a quickly shifting regulatory landscape,” said Aaron Schumm, founder and CEO of Vestwell.  “We’re thrilled to partner with our deep FinTech-focused investors, who share this vision to build out this essential platform.”

Vestwell’s turnkey solution modernizes the traditional and dated 401(k), 403(b), and defined contribution solutions by combining the best parts of automated investing with the human touch that only trusted advisors can provide. The full product suite includes investment services, trading, administration, custody, recordkeeping, and trustee services.

The recent U.S. Department of Labor’s “conflict of interest” rule changes the way investment advisors will have to run their firms.  While existing retirement solutions can put advisors—and companies—at risk, Vestwell assumes 3(38) and 3(16) fiduciary responsibility which ultimately reduces both financial cost and legal liability.

“With more than 50% of working Americans not contributing to a retirement plan, there is clearly a fundamental problem with the mix of offerings in the market today” said Brooks Gibbins, co-founder and Managing Partner of FinTech Collective. “Vestwell will allow companies to bring more employees into the fold in a guided and low cost manner, while helping advisors grow their assets and increase the quality of their revenue.”

“Vestwell’s platform is unique because it uses automation to empower advisors to offer competitive retirement portfolios while maintaining the human interaction that comes from years of relationship building,” said Benjamin Malka, General Partner of F-Prime Capital. “As fiduciary rules evolve, we see Vestwell not only protecting advisors but also providing them with the tools required to help their clients retire wealthier.”

“The Vestwell team’s proven track record, combined with a platform that offloads regulatory burden from both the RIA and the employer, will drive success for both parties in an increasingly challenging regulatory environment,” says Brad Svrluga, General Partner of Primary Venture Partners. “The opportunity to partner with Aaron Schumm, a repeat founder in the FinTech industry with unique insights into this complex market, was something we simply couldn’t pass up.”

About Vestwell, Inc.

Learn more at Vestwell.com and on Twitter @Vestwell.  Vestwell Advisors is a subsidiary of Vestwell, a 3(38) and 3(21) SEC registered investment advisory firm, specializing in 401(k) and other defined contribution retirement investment management services.

This is not an offer, solicitation, or advice to buy or sell securities in jurisdictions where Vestwell Advisors is not registered. An investor should consider investment objectives, risks and expenses before investing. More information is available within Vestwell Advisors’ ADV.  There are risks involved with investing. Investors should consider all of their assets, income and investments. Portfolios are subject to change. All opinions and results included in this publication constitute Vestwell Advisors’ judgment as of the date of this publication and are subject to change without notice.