Why We’re Investors in Vestwell


I met Vestwell CEO Aaron Schumm in early 2016, after an intro from an industry friend and colleague, Ben Malka. A long-time investment tech veteran, Aaron founded Vestwell to use modern investment technologies (like the tech he designed at FolioDynamix) to bring a low cost, easy-to-use retirement platform to the large and underserved SMB employer market.

So we joined fellow seed investors FinTech Collective (who led), F-Prime(Fidelity owners’ VC fund) and Primary Ventures to help Aaron build and launch their platform to early customers. Over the past four years, we’ve seen Vestwell zig and zag (as all early stage startups do), but always moving the company closer to that realizing the same mission of serving the vacant SMB retirement market.

Today, Vestwell announced its Series B round, led by Goldman Sachs and including investments from Point72 Ventures, existing investors (like us) and a number of leading, highly-strategic investors, such as NationwideAllianzBNY Mellon and Franklin Templeton. The company is now enabling hundreds of advisors to serve thousands of small businesses, representing $100s of millions of retirement assets…but that is really just the beginning of the story. Large advisory channel partners are deciding to switch their entire SMB book of business over to Vestwell’s platform — it’s just that much better.


Goldman Sachs Backs Retirement Technology Platform Vestwell

Goldman Sachs

NEW YORK (Reuters) – Vestwell Holdings Inc, a tech platform for retirement plans, said on Tuesday it raised $30 million from Goldman Sachs Group Inc, Point72 Ventures and the Bank of New York Mellon Corp.

Franklin Resources Inc, Allianz Life Ventures and the venture capital arm of Nationwide Mutual Insurance Company also invested in the fundraising, which was led by Goldman Sachs’ principal strategic investments group, the companies said.

New York City-based Vestwell plans to use the funding to hire engineers and developers to expand its technology and customer service offering, said Aaron Schumm, chief executive and founder of the startup. The firm expects to add around 30 employees, bringing its workforce to nearly 80.


Led By Goldman Sachs, Vestwell Raises $30 Million

Led By Goldman Sachs, Vestwell Raises 30 Million Dollars

Vestwell, purveyors of an increasingly popular digital retirement platform, announced a $30 million funding round Tuesday. The round was led by Goldman Sachs Principal Strategic Investments (PSI). Other funding participants in the Series B funding round included companies like BNY Mellon, which announced a partnership with the firm in late 2018 to add firepower for the bank’s foray into state-sponsored retirement plans, and Fidelity’s F-Prime Capital. Vestwell said it moved up its timetable for the funding round by about a year after receiving funding inquiries on the heels of the BNY Mellon deal.

This deal, however, is separate from the BNY Mellon partnership, noted Vestwell founder and CEO Aaron Schumm. Up to two-thirds of the capital will be earmarked for accelerating technology and product builds, including some that were already in development, like advisor-focused reporting and analysis and efforts to streamline plan sponsor onboarding.

The company’s client service offerings will also be expanded to handle the organic and strategic growth Vestwell is experiencing. Between 20 and 30 advisory firms come to Vestwell per month, said Schumm, of which “most” are conversions of existing clients. As the company scales, it’s exploring integrating chatbots with its customer support to allow its staff to field more inquiries. Vestwell’s client list has grown 10-fold, according to company figures.


Participants Report Being Knowledgeable About Retirement Plans


Nearly eight out of 10 participants, 76.7%, in 401(k) or 403(b) plans are saving more than 4%, according to a survey by Vestwell, summarized in its report, “The Retirement Advantage.”

Additionally, 59.5% say they are comfortable with their knowledge about their retirement plan, and 64.7% know they need to save 10% of their salary or more for a comfortable retirement. More than two-thirds, 67.3%, said they know where to find their retirement plan fees. Just over six out of 10, 61.6%, said they engage with their retirement plan. Only 33.5% said they wish they understood more about retirement planning.

However, only 25.7% of those between the ages of 25 and 34 are saving more than 10%, and 44.2% of those between the ages of 55 and 64 are saving this much.

Simple participant education ideas can make a great impact, according to Vestwell; after hearing one Investopedia statistic about the benefit of saving early, 21.7% of respondents said they plan to increase their retirement plan contribution. Another 26.4 said it made them rethink their deferral rate but could not afford to increase it.


Vestwell Finds New Small Business Payroll Partner

small business payroll

Vestwell is partnering with small business payroll software provider OnPay, the company announced. The partnership is designed to make providing small business benefits easier for CPAs, advisors, plan sponsors and participants by providing turnkey retirement offerings.

The integration will give “advisors a more expansive solution for their clients, [while] offering plan sponsors an easier way to administer plans,” said Aaron Schumm, founder and CEO of Vestwell. “Having an advisor that can step in alongside a CPA and create a custom retirement plan is a fantastic value-added service.”


Multiple Employer Plan Solutions on the Horizon

multiple employer plan

Multiple Employer Plans (MEPs) have garnered quite a bit of attention recently as lawmakers continue to discuss ways to provide small employers with more opportunities to offer retirement benefits for their employees. There are many benefits to Multiple Employer Plans (MEPs), especially in the small plan market.    However, the question looms, are these plans right for every small business?

Vestwell Inks a Deal With BNY Mellon

BNY Mellon
Bank of New York Mellon and Vestwell are entering a partnership that will give the bank a technological boost as it embarks on a foray into service offerings for state-sponsored retirement plans. The bank signed Vestwell as an affiliate, meaning several of the banking behemoth’s units, including BNY Mellon Custody, Pershing brokerage services, Lockwood asset management and retirement plan management solution, Sumday, will all have access to the newly signed firms’ homegrown retirement plan-focused interface.


The Latest In Financial Advisor #FinTech (June 2018)

small businesses
One of the biggest challenges in the world of employer retirement plans is that a huge portion of workers are employed by very small businesses, many of which find it too confusing or time-consuming to open a 401(k) plan… with the end result than a mere 5.6% of businesses with fewer than 10 employees have a plan in place. And unfortunately, the economics of small business 401(k) plans are so weak that it’s even a challenge for advisors to be sufficiently compensated for the administrative time and hassles it takes to set one up. In this context, it’s notable that “401(k)-robo-for-advisors” platform Vestwell has announced a partnership with Namely, an “all-in-one” payroll and HR benefits provider, that will integrate Vestwell directly into its payroll system, to make it easier for advisors working with small businesses on Namely to quickly and easily establish a plan. 
Read the full article here.