Vestwell Announces New Joint Offering with Riskalyze to Deliver an End-to-End Digital 401(k) Experience Built Around the Risk Number®

The partnership will bring two of the financial advice industry’s leading financial technology platforms together for an optimal retirement planning and risk assessment experience

NEW YORK, NY, October 5, 2017 — Vestwell and Riskalyze today announced a new joint offering called Riskalyze Retirement Solutions, allowing advisors to access a new version of Vestwell’s retirement planning portal on the Riskalyze platform. The deep partnership will put Vestwell, the industry’s first fiduciary-backed retirement platform for the financial advisor community, and Riskalyze, the industry’s leading risk alignment platform, in the hands of financial advisors to better service employers and investors everywhere.

Aaron Schumm, CEO at Vestwell, was featured today during the main keynote address at the Fearless Investing Summit, where both companies discussed how the partnership will help advisors scale their practice, while enhancing the client experience, with compliance and a fiduciary mindset at the core.

Advisors will be able to simply log into the Riskalyze platform to generate 401(k) proposals and onboard clients electronically. In addition, plan participants will have access to pinpoint their own Risk Number® to help them get matched with the right asset allocation.

In addition to Vestwell’s 3(38) investment management services, the new joint offering will include access to several of the asset managers in Riskalyze’s Autopilot Partner Store. This will give advisors, plan sponsors and plan participants access to additional investment strategies, while still allowing Vestwell to assume ERISA 3(16) fiduciary responsibility on behalf of advisors and plan sponsors.

Overall, the new joint offering will allow advisors to clearly document their alignment and compliance with the pending DOL Fiduciary Rule, and demonstrate that they are acting in the best interests of plan participants. Users of the joint offering can look forward to the following features:

  • Operational Efficiency: The integration will remove an advisor’s administrative burden to sell, implement, and service retirement plans while handling both the HR participant notification process and the 5500 tax filing on the advisor’s behalf.
  • Holistic Planning: Riskalyze’s risk alignment platform will now enable advisors to offer an end-to-end digital 401(k) experience built around the Risk Number, by integrating risk assessment, goal analysis and asset allocation into Vestwell’s innovative experiences for advisors, plan sponsors and plan participants.
  • Scalability: By offering flexible, bundled or unbundled investment and fiduciary services, the digital platform will enable advisors to scale their business without heavy operational cost or burden. The platform does this by leveraging administrative services and fiduciary services as needed.
  • Enhanced Client Experience: With a streamlined and simple digital portal, advisors will be able to control the delivery of their client experience. By allowing advisors to deliver a consistent experience through an open-architecture, multi-custodian, multi-record-keeper platform, the platform will equip advisors to seamlessly guide clients in choosing investing strategies based on their individual needs while automatically rebalancing portfolios.

“At Vestwell, our number one priority is providing financial advisors with retirement technology that removes the administrative burden of implementing and servicing retirement plans,” said Vestwell CEO Aaron Schumm. “We’re thrilled to reach more advisors through our partnership with Riskalyze, an industry leader whose mission of equipping advisors with outstanding risk assessment technologies mirrors our own core values.”

The offering will be available to Riskalyze users including Registered Independent Advisors, Independent Broker-Dealers, investment managers, plan sponsors, and employees.

“Vestwell’s mission to make retirement plans affordable and accessible for all investors is reflective of our own hope: to empower fearless investing by providing investors with their true risk tolerance, and helping advisors align portfolios in the best interests of their clients,” said Aaron Klein, CEO of Riskalyze. “These shared values are what prompted us to choose Vestwell as our partner in delivering an end-to-end digital 401(k) experience built around the Risk Number.”

The integration will be available later this year. To introduce the offering to the advisor community, Riskalyze and Vestwell will be hosting joint webinars to help educate and train advisors using the platform. To learn more about Vestwell’s retirement planning platform, visit www.vestwell.com. For more information about Riskalyze, visit www.riskalyze.com.

 

About Vestwell Holdings, Inc.

Vestwell Advisors, LLC is a SEC registered investment advisor, 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 led by CEO Aaron Schumm, Vestwell can assume 3(38) or 3(21) 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.

 

About Riskalyze

Riskalyze is the company that invented the Risk Number®, which powers the world’s first Risk Alignment Platform, empowers advisors to automate client accounts with Autopilot, and enables compliance teams to spot issues, develop real-time visibility and navigate changing fiduciary rules with Compliance Cloud. Advisors, broker-dealers, RIAs, asset managers, custodians and clearing firms use Riskalyze to empower the world to invest fearlessly. To learn more, visit www.riskalyze.com.

 

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

Vestwell Raises $8 Million in Series A Funding led by F-Prime Capital Partners

As Vestwell’s Digital Retirement Platform Experiences Rapid Growth, Funding will be used for Market Expansion and Further Development of the Platform’s Technology


NEW YORK, Oct. 2, 2017 /PRNewswire/ —  Vestwell, the industry’s first and only fiduciary-backed retirement platform for the financial advisor community, today announced $8 million in Series A Funding led by F-Prime Capital Partners, the venture capital group associated with the parent company of Fidelity Investments, with participation from Primary Venture Partners, FinTech Collective, and Commerce Ventures. Launched in late 2016, Vestwell received $4.5 million in its initial Series Seed of financing in September 2016.

Vestwell has grown rapidly this year with an exceptional market reception. As advisors look to better engage with their clients, while scaling their practice, Vestwell’s platform can be leveraged to facilitate every aspect of the advisor, company and employee’s needs. The unbundled, turnkey 401(k) and 403(b) platform becomes an extension of the financial services firm, helping to reshape how plan sponsors and employees are serviced. The multi-recordkeeper, multi-custodial technology can also incorporate 3(21), 3(38) and 3(16) investment and administrative services.

So far this year, the company has signed over 50 registered investment advisor (RIAs) firms, as well as independent broker-dealers, asset managers, and bank/trust custodians, with plans to onboard several thousand advisors this year.  The funding will be used to grow the team while further enhancing the technology.

In conjunction with this funding news, Vestwell also announces Ben Malka as a member to the Board of Directors. Malka is a partner at F-Prime Capital and also serves as co-chairman of the Financial Services Venture Capital Association.

“We’re excited to increase our reach in the financial advice industry and continue to develop better technology for our clients,” said Aaron Schumm, Founder and CEO of Vestwell. “Vestwell was founded to provide advisors and plan sponsors with an affordable, compliant, and easy-to-use retirement planning solution to help close the retirement savings gap in America, and F-Prime has supported that mission since our inception. This announcement, combined with the outstanding leadership that Ben brings to the Board of Directors, is instrumental to Vestwell’s success.”

“Vestwell’s white-labeled platform provides financial advisors with the ease of compliance and automation while maintaining the human interaction that makes their businesses succeed,” said Malka. “By giving advisors and plan sponsors access to low-cost plan options, Vestwell is providing employees across the country with the tools and plans that can help them to retire happily.”

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

About Vestwell Holdings, Inc.

Vestwell Advisors, LLC is a SEC registered investment advisor, 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 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.

Source: Vestwell Holdings, Inc.

Related Links

http://www.vestwell.com

Vestwell Named Winner of XY Planning Network’s 2nd Annual Advisor FinTech Competition

The FinTech competition was held at the #XYPN17 Conference in Dallas, TX on Aug. 28-31

September 20, 2017 (BOZEMAN, MT) – XY Planning Network is proud to announce the winner of its second annual Advisor FinTech Competition. Vestwell (vestwell.com), the digital employer retirement plan platform for advisors, took home first place against six other finalists during a live presentation at the #XYPN17 Conference which brought together 500 attendees and 116 exhibitors in Dallas, TX.

The competition, which solicited a record-breaking 24 submissions, was hosted by advisor technology guru Bill Winterberg of FPPad, and overseen by an elite panel of judges including XYPN Co-founder Michael Kitces, and representatives from the FinTech competition sponsors Betterment for Advisors and Quovo.

“It was our explicit goal with the XYPN FinTech competition to provide these new startups a way to showcase their technology to our young, tech-savvy advisors, who need the help of technology to service Gen X and Gen Y clients efficiently,” said Kitces. “When you look at the scale and quality of submissions we received this year, it’s evidence that the advisory industry really is attracting a tremendous new wave of startups looking specifically to serve the growing needs of financial advisors.”

“The judges were extremely impressed with Vestwell’s platform, and the way that they have weaved together the complex and disparate elements of the employer retirement plan industry into a single technology platform that makes it easy for advisors to help their small business clients with qualified plans,” continued Kitces.

Launched in September 2016, Vestwell’s retirement technology combines the best parts of automated investing with a human touch, removing the friction points of confusion, cost and compliance overhead that come with traditional retirement plans. The white-gloved retirement platform includes modern dashboards and rich visuals demonstrating planning objectives at the participant level, and a low-cost, compliant solution to scale the advisor’s business.

“It was incredible to witness the energy and passion of the hundreds of advisors who attended #XYPN17,” said Vestwell CEO, Aaron Schumm. “A large part of Vestwell’s early success can be attributed to the many advisors who have been early adopters of our technology. These advisors, along with everyone involved with XYPN, have a shared vision to create an accessible, fiduciary future for financial services – we’re honored and excited to be a part of it.”

As the winner, Vestwell will be featured on Bill Winterberg’s FPPad.com and Michael Kitces’s Nerd’s Eye View blog. The company will also have a segment on the popular #XYPNRadio podcast, and appear on XYPlanningNetwork.com.

CSLA Technology won Honorable Mention for its Student Loan Repayment Tracker which reduces the complexity of the college decision process. The other finalists included DataPoints, Loanbuddy, RobustWealth, ROL Advisor, and Tolerisk.

The 2018 conference, renamed #XYPNLIVE, will again include a FinTech competition, and will be held in St. Louis, MO on September 23-26, 2018. To register, visit info.xyplanningnetwork.com/xypn-live.

For media inquiries, contact xypn@ficommpartners.com.

About XY Planning Network

The XY Planning Network, with nearly 500 advisors, is the leading turnkey financial planning platform for fee-only financial advisors who want to serve their Gen X and Gen Y peers, providing comprehensive financial planning services for a monthly subscription fee and without product sales or asset minimums. The Network offers a virtual community for new and established financial advisors who want to serve a younger clientele, and provides its members compliance support services, marketing support, business tools and templates, and a wide range of technology solutions. http://www.xyplanningnetwork.com/

About Vestwell Holdings, Inc.

Vestwell Advisors, LLC is a SEC registered investment advisor, 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.

Source: XY Planning Network

It’s National 401(k) Day!

Happy National 401(k) Day! How will you be celebrating it?

What’s that — You’re not celebrating it? That’s understandable. After all, every day is a holiday now — In addition to Halloween and Mother’s Day, there’s National Ice Cream Day (Ben and Jerry’s gives out free cones!), national Pokemon day, and Hug a Farmer Day. You can even register your own holiday. But National 401(k) day is a day you should actually pay attention to — it’s the day you should do your Annual 401(k) Checkup.

Looking into your retirement savings sounds about as much fun as going to the dentist (which, crazy enough, experts say you’re supposed to do twice a year). Fortunately, this isn’t as painful as you think, and getting your 401(k) set up right can make a big difference in terms of having a brighter future. With a quick checkup, you could make changes that could forever improve your future.

This article is written from the perspective that your employer is offering you a plan. Fortunately, about 80% of Americans are offered some sort of plan by their company, though many small businesses don’t have one available.

Increase Your Contributions
Are you already contributing to your 401(k)? If so, that’s a great start. Only about 44% of Americans are contributing. The first thing you should check is whether you’re maxing out your employer matching. Many employers offer additional funds to employees who contribute to their account. If you’re not maxing it out, you’re leaving money on the table.

Even if you are maxing out your company match, you should probably contribute more. Try bumping up the amount of money you contribute every month — The maximum for people under 50 years old is $18,000 a year. Now, that may sound like a big chunk of your paycheck, but remember it’s pre-tax dollars, so it’s the equivalent of only about $12,000 in take home pay. So regardless of how much you decide to invest, if you took it as salary, you’d only get about two-thirds of it, and the rest would go to taxes. So try saving more and see how it feels — you can always dial it back down later. Your future self will thank you.

Optimize Your Investments
Saving money for retirement isn’t enough — you also have to make sure it’s invested properly for your needs. A few tips: Think about how comfortable you are with risk. Long-term investments are all about remaining comfortable while weathering the storm of volatile markets, and though it can feel counterintuitive, it’s oftentimes best to just stick with your investments. Still, if you’re particularly risk averse, there are ways to invest your money which are less tumultuous.
Think about your future needs. When do you plan to retire? And is your 401(k) your sole source of retirement funds, or do you have a partner who will also be contributing? Thinking ahead can make a world of difference.

Roll Over Your Old Accounts
Have you switched jobs over your career? Most of us have, particularly younger Americans, who tend to jump from company to company with high frequency. When you switch jobs, it’s easy to forget about money laying around in old 401(k) accounts. A good option may be to “roll over” those accounts into your current 401(k) provider for a number of reasons. First of all, consolidating accounts is an opportunity to save on fees. Many older retirement accounts charge surprisingly high fees. Even a 2% fee can cost you a fortune by the time you retire.

Consolidating accounts makes it easier to see all your money in one place and keep track of it. It can be easy to lose track of old accounts, particularly when your previous employers may not have your new address after you move.

At Vestwell, we believe that everyone deserves the right to receive unbiased advice and quality investment services at an affordable price. We’re proud to be at the forefront of a wave of 401(k) reform. You can learn more about our offering on our website at Vestwell.com.

#XYPN17 FinTech Competition Award

By Aaron Schumm

I am pleased and humbled to share with you the great news that Vestwell has been selected as the winner of the XY Planning Network’s annual FinTech Competition.  This honor is especially meaningful because we were up against such impressive competition.

The other contenders included CSLA Tech, which has an awesome offering that helps advisors reduce the long-term consequences of student loans, as well as DataPoints, Loan Buddy, RobustWealth, ROL Advisors and Tolerisk, which are also designing amazing technology for the financial planning services community. Together, all of us are working to meet the needs of the next generation of advisors and their clients.

More than anything, this award speaks to the promise of FinTech and the need for continuous innovation. We are thankful that XY Planning selected Vestwell, as it affirms our mission to provide the next generation of solutions that advisors need and clients demand.

We are committed to keep pushing the envelope on solutions that enable every financial advisor to be able to offer their clients a low-cost, fiduciary and automated retirement platform. With these tools, advisors can focus on what they do best – building their business by focusing on establishing and nurturing exceptional customer service and relationships.

Thank you for partnering with us.  We’re looking forward to a bright future for all of us.

Turbocharge 401(k) Participation: Two Smart Strategies for Advisors to Turbocharge Retirement Plans

Two Resources, Two Effective Tactics, Two Essential Steps

By Vestwell Staff

Meet Allison. At 24, she is a second year auditor in the Boston office of a regional consulting firm. When Allison joined the firm, she sat in a room with 40 fellow recruits to listen to a mandatory presentation about the firm’s benefit package. Squeezed between inventory training and the happy hour, that session was a blur of legalese. How was she supposed to pick the right funds if they all looked the same? On her way out the door, Allison tossed the thick 401(k) paperwork package into her desk drawer. That’s where it still sits, two years later.

Robert, the IT support team leader with an office a few doors down from Allison’s desk, has his own retirement worries. Robert is a baby boomer, and fears of being unable to retire are looming large on his radar. He is a well-respected professional with a long, successful career, yet his contributions to the company’s 401(k) plan have always been just the bare minimum. While Robert worries about his lifestyle in retirement, without a clear understanding of his investment options or tools to make intelligent decisions, he struggles to find the motivation to invest more.

Allison and Robert are not alone. According to the Bureau of Labor Statistics, 55% of the American workforce has access to a 401(k) plan, yet only 38% of them choose to participate. And it is not only Millennials that are not adding to their savings. Half of baby boomers, many of whom are already past their peak earning years, have retirement savings of less than $100,000.

We believe that a major source of this problem is the way that retirement plan options are presented to employees.

Many employees just like Allison and Robert are discouraged from enrolling in their company’s 401(k) plan or using it to its full advantage. Common obstacles include the cumbersome onboarding processes, confusing investment fund options, cryptic language and intimidating systems.

It does not have to be this way.

At Vestwell, we envision a future where companies can rely on retirement planning advisors to offer a new generation of plans.

Here is what the future looks like.

Retirement Plans Must Offer Customized Solutions

The problem with traditional 401(k) plans is that employees are limited by poor choices when it comes to fund options. Many 401(k) offerings have excessive costs, poor performing funds and not enough diversification opportunities to allow investors to properly manage risk. Put bluntly, these “off the shelf” product offerings force employees into portfolios that are just not good enough.

Then there is the lack of independence. Too many 401(k) plans still lock employees into proprietary funds. This practice dates back to the early 1990’s when many of the 401(k) platforms were offered through large mutual fund companies. At the time, investment options were limited to the affiliate’s funds in part because the record keeping technology did not allow a broader spectrum of investment products. Technology has since advanced, but many providers remain stuck in the past.

The solution is clear. Plan sponsors need a modern platform that will allow them to offer a wide range of independent investment options. Otherwise, underperforming and poorly managed funds will continue to limit the potential of plan participants to save enough for retirement.

Streamlined Onboarding and Plan Maintenance Are Key

Pensions were once the gold standard of retirement planning. A guarantee of retirement income was provided in exchange for years of service. Today’s 401(k) participation is anything but automatic. Employees must complete numerous paper forms and read through hundreds of pages of boilerplate disclosures. The convoluted enrollment process, combined with complex terminology, means that many employees fail to opt into their company’s 401(k) plan participation out of sheer confusion.

But it is not just employees who are exasperated and confused by the status quo.

The first 401(k) plans were launched back in 1982, yet the volume of paperwork that plan sponsors have to deal with has only increased. They also have to manually track enrollment status and participant changes and there is a stubborn lack of visibility into the fee structure of funds, which makes it difficult to compare costs across providers.

The maintenance of a 401(k) plan has become a full-time job for sponsors and the results (measured by plan participation and fund returns) leave much to be desired.

What would it take to turn 401(k) plans into the valuable engine for retirement savings that they were intended to be? We believe that the answer lies in maximizing the use of technology. If vendors and partners could automate the time-consuming and error-prone processes of enrollment, account maintenance and reporting, plan management would become much easier. Adapting the design of the plan to fit the changing needs of the plan sponsor should take a few clicks, not dozens of forms and weeks of waiting.

The benefits of automation should also extend to plan participants. Vestwell’s research shows that companies with automatic 401(k) enrollment can double employee participation rates. Other surveys have shown that employees with automated enrollment begin saving for retirement earlier. They also report that saving for retirement is easier. A strong 401(k) savings plan can go a long way towards retaining valued employees, recruiting new promising talent and creating better retirement outcomes.

Tips for advisors to turbocharge retirement plans

The current state of retirement savings enrollment is costly, cumbersome and confusing. If your company’s retirement plan participation statistics are disappointingly low, maybe it is time for a new approach. The 401(k) may not be the magical cure, but when used correctly it can be a powerful tool for creating peace of mind in your employee’s retirement.

Contact us at info@vestwell.com for more information about turning your 401(k) offering into a benefit that is easy to administer and manage.

Day of Reckoning with the DOL

By Aaron Schumm, Vestwell’s CEO and Founder

It.  Is.  Here.  Department of Labor Secretary Alexander Acosta has made a wave in the political landscape by not further delaying the applicability date of the DOL Fiduciary Rule.  Many suspected the can would be kicked down the road, with another delay.  Without taking a political stance, this is a prime example of a highly publicized regulation not being “pared back” by the new administration by way of an executive order.

Forward-thinking shops have already moved to spiritually fulfil their fiduciary obligations – (Link).  But, as we all know, there are procrastinators.  The “wait & see” camp have been left scrambling for solutions.  The anecdote by John Castelly of Personal Capital perfectly captured the state of procrastinators, “This turnaround with a June 9 deadline is just like when we were back in school, thinking we would have a substitute teacher, so we didn’t do our homework, but the real teacher showed up instead and we are now not prepared.”

So, what does it mean for you?  Still, there remains a void that will be filled by the fiduciary rule becoming regulation on June 9.  In the simplest terms, the rule is about transparency of fees, suitability of financial products, and alignment of interests between advisor and consumer.  As it pertains to the 401(k) industry, there are a few key areas we will highlight.

Fee transparency. There can be no “hidden” fees, such as 12b-1’s, sub-transfer agent fees, etc.  Of interest to you, whether a company or an employee, might be the 408(b)2 and 404(a)5 fee schedules to understand who is being paid and how much.

Reasonable Fees. Expanding on point 1, the advisor and plan sponsor’s fiduciary responsibilities now include selecting providers and investments with a reasonable fee.  What’s a reasonable fee?  While that is debatable depending upon a number of factors, a strong argument can be made that with advent of low-cost investment products like index ETF’s and efficient technology platforms to help operationally scale, the total fees (including advisory, admin and investments)  can be totaled at well below 2%, and may be closer to 1% in practice (depending on the investments and service).

Fiduciary roles – There are 4 main areas in defined contribution plans:

    1. Named Fiduciary – This is typically borne by the plan sponsor but can also be aided by the platform provider.
    2. Named Investment Manager – If you’re picking the fund lineup for the employees, you’re picking up that responsibility.  But, investment managers, MF/ETF strategists, DCIO’s, financial advisors, and platform providers can step in to take on this role for you.  This is usually done under the SEC 3(38) and/or 3(21) construct.
    3. Named Administrator – This role is responsible for the final administrator processes on behalf of the company & employees.  Typically, the plan administrator named in the agreement is the plan sponsor.  However, it can be outsourced to a third-party administrator (TPA) and/or ERISA 3(16) provider.
    4. Named Trustee – This is the party acting as the trustee on behalf of the plan. Again, this is typically carried by the plan sponsor, but can be outsourced to a trust company or other third parties.

As the industry thankfully moves towards simplistic, fee-based, low-cost, and transparent environment, understanding the moving parts of retirement plans will become far less confusing for those less adept to 401k and 403b plans.

In every change, there is opportunity; the DOL rule may change the industry, in our eyes for the better.

If you have any questions around how the DOL rule impacts you as an advisor, company or employee, feel free to contact us here at Vestwell.  We are happy to help.