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. 

Open APIs as the Key to Growth in WealthTech

WealthTechToday, in a world that is changing more rapidly than ever, knowledge becomes the most valuable of all assets. For example, if an investor or financial advisor is able to find out useful information in good time, they can make worthwhile investments. With leaders of WealthTech companies, we discussed the API landscape and the APIs provided by their companies. Below, are some of their ideas and insights.“In today’s technology landscape it’s crucial to be able to establish connectivity across any industry player that either brings value to you as your core business or to your clients and their core business” said Aaron Schumm, Founder and CEO. More on this topic here.

Retirement Industry People Moves

payroll integration

Vestwell is partnering with Namely, a human resource (HR) platform for mid-sized companies, to provide an all-in-one retirement experience for plan sponsors and their employees.

Vestwell’s retirement offering will now integrate into Namely’s platform. Through single sign on, users will gain access to key benefits and retirement information, all in one place. More importantly, the new offering provides payroll integration, thus removing the significant administrative burden from plan sponsors of providing ongoing payroll information and updated election deferrals.

“By coupling Vestwell’s turnkey retirement solution with Namely’s humanized and savvy HR system, we’re able to create a more harmonious experience for the plan sponsor and their participants” The full article can be found here.

401(k) robo-revolution is underway


Tech upstarts are making inroads into 401(k) plans and that’s bad news for some retirement plan advisers.

Such fledgling companies as Betterment for Business, ForUsAll, Human Interest and Vestwell, as well as more established players such as Financial Engines, are using technology to deliver services to plan sponsors and participants that traditionally are offered by human advisers.

“Where do you best service your client — plan design, product selection, education services? We become the rest of that equation around the adviser,” said Vestwell founder and CEO Aaron Schumm. Read the full article here.

Retirement Plans; A Neglected Niche?

retirement plans

Since prospecting, selling and servicing retirement plans is such a complex, often inefficient, market, spread across many different stakeholders, it’s no surprise there has been a rise of digitally focused vendors seeking to reduce the inherent friction in building, implementing and servicing 401(k) plans. One of the more prominent is Vestwell, which calls itself the industry’s “first and only fiduciary-backed retirement platform for the financial advisor.”

Led by Founder and CEO Aaron Schumm, a serial entrepreneur who previously built and then sold FolioDynamix to a private equity firm (which then sold it to Envestnet), Vestwell still qualifies as a startup, but has recently been busy not just in finding additional capital but in partnering with advisor-focused firms like Riskalyze and Morningstar. They’ve added to their advisory board high-profile industry names like Josh Brown of Ritholtz Wealth Management and Lori Hardwick, formerly of Envestnet and Pershing, who recently founded Advisor Innovation Labs.

“Schumm says the lack of the necessary scale and structure for advisors to serve multiple retirement plans was the whole reason we built Vestwell”. Read the article here.