By Ryan W. Neal
Digital retirement platform Vestwell is developing a new technology infrastructure that would do away with the need for traditional record keepers.
Vestwell’s existing technology lets advisers create, sell and managed defined-contribution retirement plans, but founder and CEO Aaron Schumm said the engine still needed connections with archaic record keepers that slowed down processes and drove up costs.
“Legacy providers out there have been around for a lot of years. They work, they perform a function that’s critical to the equation, but it’s old,” Mr. Schumm said. “We’ve revisited, redone and rethought recordkeeping from the ground up.”
By Stephen Miller, CEBS
Congress overwhelmingly passed and President Donald Trump has signed into law an end-of-year spending bill and a companion tax extenders measure that contain several agenda items championed by the Society for Human Resource Management (SHRM), including full repeal of the so-called Cadillac tax on high-cost health plans. The SECURE Act, a measure to promote savings by easing compliance burdens on defined-contribution and defined-benefit retirement plans, was attached to the appropriations bill.
By Stephen Miller, CEBS
President Donald Trump on Dec. 20, 2019, signed into law the Setting Every Community Up for Retirement Enhancement (SECURE) Act, a bill to help employers create and run retirement plans for workers. The Society for Human Resource Management (SHRM) strongly backed the measure, which the House first passed in May and the Senate approved on Dec. 19 as part of a year-end appropriations package.
While there’s been no shortage of things to read about in the news these days, the bipartisan-supported Setting Every Community Up for Retirement Enhancement (SECURE) Act has been signed into law and it’s arguably the most impactful retirement plan security legislation in decades. For those wondering which of the hundreds of pages of legislation are most relevant to plan sponsors, here are some thoughts.
This month’s Winners of Wealthtech interview is with Aaron Schumm, the Founder and CEO of Vestwell, an entirely new kind of digital retirement platform transforming the way plans are offered and administered — for the benefit of advisors, employers, and employees alike.
Prior to founding Vestwell, Aaron was a co-founder of FolioDynamix, a wealth management and advisory services company that powered $800 billion in assets for over 100,000 advisors. At FolioDynamix, which was sold to Envestnet in 2017, Aaron oversaw the strategy, revenue, marketing, customers and product. Aaron holds a B.S. degree in finance from the University of Illinois and an M.B.A. degree from Duke University, The Fuqua School of Business. He was named as one of 40-under-40 by InvestmentNews and WealthManagement.com’s “10 to Watch”.
Listen to the podcast here!
By Denise Power
If you could create your own fantasy Board of Directors who would be on it? CO— connects you with thought leaders from across the business spectrum and asks them to help solve your biggest business challenges. In this edition, a CO— reader asks whether it is feasible for a small business to sponsor a 401(k) plan for employees.
Ben Thomason, executive vice president of revenue at Vestwell, answers…
Companies know it’s vitally important to have the right people on board to build the business, and a solid benefits package attracts the top talent they need. However, many small businesses assume they do not have the option to offer a 401(k) retirement savings plan.
In the quest to grow their businesses, advisors find challenges in new opportunities and in managing scale. But a survey from retirement platform Vestwell finds that they’re overlooking gaps in the way they approach making their practices more efficient.
Identifying new opportunities and managing scale were cited by retirement plan advisors as the biggest issues they struggle with in growing their practice, but a new study suggests they are not taking steps to create additional efficiencies.
In “Evaluating Operational Challenges to Drive Scale and Efficiency,” 39% of advisors stated that identifying new opportunities is their biggest hurdle to growing their practice, followed by 33% who see managing scale as their biggest hurdle. Yet, an even smaller percentage are outsourcing their most basic functions, according to the study by digital platform firm Vestwell.
Consolidation of recordkeeper service providers to the defined contribution market may not yet be as torrid as some early predictions, but it’s happening.
The trend is expected to continue among the largest national recordkeepers—a list numbering about 40—and among the scores more of regional providers.
“From a pure recordkeeping standpoint, there is excess capacity,” Alexander D’Amico, a partner in McKinsey’s financial services practice, told BenefitsPRO earlier this year.
As the world’s largest custodian bank and asset servicing company, and one of the oldest banking corporations in the US through its predecessor, many would believe that the Bank of New York Mellon Corporation (BNY Mellon) is a traditional financial services company that has not kept up-to-date with digital and technology advancements and is instead tied to its legacy past.
Read more about our partnership with BNY Mellon here.