How Advisors Ease Non-Revenue-Generating Pain Points: Excel 401(k) 2020 Digital Series

While workplace retirement plans are the only source of invested assets for the majority of Americans, most plans are still delivered on recordkeeping technology built before the Internet even existed.

It makes efficiency and scale near impossible, a recent session at the Excel 401(k) 2020 Digital Series noted, especially in certain market segments.

Now is Always the Right Time: 5 Reasons Why It’s a Great Time to Start a Company-Sponsored Retirement Plan

We may all be living on the edge of uncertainty as we navigate the COVID-19 climate, but the one thing we can all be sure of is that Americans need a healthy nest egg in order to retire comfortably. So at a time when health and money are top of mind for most, if you don’t already offer your employees a tax-deductible way to save, this marks a great opportunity to start a company-sponsored retirement plan. Not only does a 401(k) help you do right by your employees, but it also offers many benefits for the company as well.

1. The SECURE Act Offers Meaningful Tax Credits

One of the most compelling incentives for starting a retirement plan is the significant tax credits afforded by the SECURE Act. Small businesses that sponsor a retirement plan for the first time are eligible for a tax credit of up to $5,000 per year for three years. Additionally, any small plan that implements automatic enrollment in 2020 or later is eligible for a $500 credit for three years. This applies to both existing and new plans and can be combined with the start-up tax credit for additional savings. Thanks to these credits, starting a 401(k) has become incredibly affordable. In instances where you pass some expenses onto participants, you might not end up paying any fees for recordkeeping or other services for up to three years.

By way of example, the cost of starting a standard Vestwell 401(k) could look like this in Year 1:

2. There are Company Tax Deductions Too

While employers are not required to match employee contributions – unless they’ve opted into a Safe Harbor Plan, which has many incentives – many chose to do so as a way to reward employees and help them save faster and more successfully. That said, the contributions help the employer as well. Not only are they tax-deductible, but they’re not subject to Social Security or Medicare taxes.

3. It can also reduce individual Taxes — Especially for owners

At a time when financial stress is at an all time high, reducing taxes now while at the same time saving for a financial future can be a big incentive. Annual pre-tax contribution limits are $19,500 a year as of 2020, with an extra $6,500 in catch-up contributions for those over 50 years of age, which means you can reduce your taxable income by up to $26,000 a year. Business owners can save even more. With certain plan types, like profit sharing, business owners can save as much as $57,000 a year before taxes or $63,500 with catch-up contributions.

4. you want your employees to retire…eventually

In June 2020, 72% of employees said they plan on working after they claim Social Security retirement benefits. This is up from 67% this May, a trend closely tied to the current economic climate. While this is an issue for individuals, it can also be an even bigger issue for businesses, specifically when it comes to rising payroll costs. A recent survey showed that 49% of employers are concerned that delaying retirement will raise benefits costs, 41% worried it would force up overall wage and salary expenses, and 37% feared it would block younger employees from promotions. Offering a 401(k) plan not only helps your employees become retirement ready, but it could also help with the long term view of your business.

5. employees want your support

52% of U.S. employees state that finances are their biggest concern, more than all other aspects of their wellbeing including physical, mental, and social health. Not only that, but 47% believe their employers have a responsibility to address their financial wellbeing (up from 40% pre-COVID). Offering a company-sponsored retirement plan allows you to educate and support employees when it comes to their financial future.

if you’re interested in implementing a plan on or before January 1, 2021, here are some deadlines to consider: 
  • August 15, 2020: Deadline for deciding to implement a Safe Harbor 401(k) plan in 2020. This type of plan is incredibly popular with small businesses because they allow companies to bypass certain compliance testing requirements. There is still time to reap the benefits for the 2020 calendar year if you act quickly.
  • November 1, 2020: Deadline for agreeing to move an existing 401(k) plan to Vestwell for a January 1, 2021 start date as well as the deadline for terminating a SIMPLE IRA and moving it to a 401(k) plan structure for 2021.
  • November 15, 2020: Deadline for deciding to start a new, non-Safe Harbor 401(k) plan for a January 1, 2021 start date. This maximizes your tax benefits for the 2021 calendar year.

It’s times like this when many take stock of what’s important. As a business, one can argue the financial health of the company and the people within it are paramount. Offering a company-sponsored retirement plan is not only surprisingly affordable, but can benefit the company and its employees for years to come.




3 Questions With Aaron Schumm Of Vestwell

By Financial Advisor Magazine

Aaron Schumm, who has spent almost two decades in the fintech and wealth space, is CEO of Vestwell, a digital recordkeeping platform for 401(k) and 403(b) plans.

How did you personally become involved in fintech?

There’s a long and short version of this story, so I’ll leave you with the cliff notes. But essentially, I knew at a very young age that I was going to go into finance. My dad is a retired carpenter, but he always had an affinity for the markets, so we started talking shop early. That set my course in undergrad to go into finance.

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Pensionmark Partners with Vestwell to Bring Modern-Day Recordkeeping to Advisors and Their Plan Sponsor Clients

NEW YORK, NY, July 7, 2020. Pensionmark Financial Group, a premier network of retirement plan specialists and financial advisors, has partnered with Vestwell, an advisor friendly digital recordkeeper, to provide a more effective way to scale in the 401(k) and 403(b) markets. Together, the companies will bring a unique approach to corporate retirement plans by solving the historical challenges faced by plans in the small-to-midsize space while giving clients the customized experience they deserve.

Marrying a tech-forward solution with retirement plan specialists and back office support means advisors can spend more time providing valuable services and driving better outcomes. The offering can be white-labeled to further define an advisor’s value-proposition by putting their brand and reputation at the forefront, while relying on the platform for the rest.

“Technology plays a vital role in helping advisors efficiently deliver better financial solutions,” says Troy Hammond, CEO of Pensionmark Financial Group. “Partnering with Vestwell means advisors have access to advanced reporting, integration, and servicing capabilities so they can more effectively bring clients the experience they demand and deserve.”

Through a bundled or unbundled approach, the partnership can also deliver institutional pricing, premier funds, and 3(38) or 3(21) fiduciary oversight through Cota St, Pensionmark’s investment management arm. This means companies that once lacked access to certain proprietary funds or competitive pricing can now engage in the same investments and cost benefits traditionally enjoyed only by the large plan market.

“Like most in the industry, we’ve always been impressed by Pensionmark’s reputation amongst the advisor community and the clients they serve. After being fortunate enough to dive into their business model, we all quickly recognized the clear alignment of our missions, making this partnership all the more exciting,” says Aaron Schumm, CEO at Vestwell. “Pensionmark knows exactly what advisors need and what plan sponsors want. Leading with technology while prioritizing service, they can more effectively grow, scale, and retain clients, and we’re delighted to be there alongside them.”

About Vestwell Holdings, Inc. 

Vestwell is the digital recordkeeping platform bringing the 401(k) and 403(b) industry into the modern Fintech era. We have rearchitected the workplace retirement offering from the ground up and built an engine to power the $30T industry. Our customizable, open architecture, and white-labeled platform becomes a natural extension of financial services and payroll partners, while removing traditional friction points plaguing legacy recordkeeping. The result is an easier, more efficient, and all-around better experience for everyone, delivered at a fraction of the cost. Learn more at and on Twitter @Vestwell.

About Pensionmark

The Pensionmark Financial Group network represents over 275 advisors and staff across 67 locations across the country with approximately 3,700 retirement plan clients. The Pensionmark network of retirement specialists include defined contribution, defined benefit and terminal funding, not-for-profit, wealth management, and executive/deferred compensation specialists.


Mind the Gap: Doing our part to acknowledge and change the acute disparity of accumulated wealth for people of color

By Aaron Schumm, Founder & CEO, Vestwell

Across every aspect of the retirement industry, from corporate offices, to advisory firms, to small businesses, to the average American worker, it is clear that a myriad of systemic racial issues has put BIPOC (black, indigenous, and people of color) at a disadvantage. I’ve spent the past twenty years in the financial services industry and the past handful building Vestwell, which focuses specifically on bringing retirement savings & investing plans to small and mid-sized businesses. As a company that has the privilege of leveraging the platform on which we stand, it is our moral obligation to do our part to amplify minority voices and break down racial barriers within the industry.

Acknowledging the Problem

There is much written about the overall lack of long-term savings, with 45% of Baby Boomers having nothing put away for retirement. But when you begin to break down the average retirement savings by race, it becomes clear that BIPOC are deeply and disproportionately affected. In 2016, the median white family had almost $80,000 in retirement savings, while the median black family only had about $30,000 saved. The median retirement savings for hispanic families was even lower, at only $23,000. Furthermore, in 2018, the median black household earned just 59 cents for every dollar of income the median white household earned.

So while there are several factors that lead to this discrepancy in retirement savings, including the extreme disparity in average income, there is also the issue of accessibility. Minorities are notably less likely to work for an employer that offers a plan. In fact, “Blacks, Asians, and Latinos are respectively 15, 13, and 42 percent less likely than whites to have access to a job based retirement plan in the private sector.” People of color are also less likely to have access to a defined benefit plan, with 24% of white households having a pension through a current job versus only 16% of households of people of color.

What Vestwell is Doing

Vestwell was founded to make quality retirement plans more accessible to everyone. This means not only making plans easier to implement and manage but also making sure that more – if not all – Americans have one. Knowing that BIPOC often work lower-income jobs and are less likely to have a company-sponsored retirement plan, creates both an opportunity and a responsibility for Vestwell. And we plan to do something about it.

Given Vestwell’s position as a 401(k) provider, we feel compelled not only to continue current conversations around racial disparity, but also to do more to close the retirement gap, especially for people of color. This starts with education as well as access. If you are a minority-owned business, or an advisor to a minority-owned business, we want to make it easier for you to implement a 401(k) including discounts for the plan.

The struggles that are currently being conveyed in the media are not new. But today, this moment has to become a movement…one that does not fade with a news cycle. We ask our industry colleagues and friends to continue to challenge us, educate us, and remind us to do what we can to create true racial equality within the financial services industry and within every fiber of working America.



Vestwell Brings All-ETF Target-Date Strategies To The 401(k) Market

By Christopher Robbins, Financial Advisor Magazine

New York-based Vestwell, a digital retirement plan recordkeeper, announced the launch of a service offering all-ETF target-date portfolios for the small plan market.

ETFVest, which Vestwell announced on Thursday, combines 3(38) investment management fiduciary lineup services from LeafHouse Financial, which already acts as a plan fiduciary for private and public retirement plans around the U.S., with an all-ETF target-date portfolio model from Stadion, which specializes in offering customized investment options to the retirement plan market, using Vestwell’s API-driven recordkeeping solution.

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Vestwell and LeafHouse Financial Launch an All-ETF Custom Investment Glidepath Solution for the Small Retirement Plan Market

New offering gives advisors a scalable, tech-forward program with smart investment strategies to effectively support the needs of plan sponsors

NEW YORK, NY, May 27, 2020 – Vestwell, a digital recordkeeper, announced today the launch of ETFVest, a new retirement plan solution that combines 3(38) investment management fiduciary line-up services from LeafHouse Financial with an all-ETF target date portfolio model from Stadion. ETFVest leverages Vestwell’s API-driven tech-forward solution to offer advisors a scalable, cost-effective, managed account solution in the small plan market.

The diverse, multi-manager line-up gives advisors exclusive access to an all ETF custom glide-path leveraging funds from Franklin Templeton, State Street Global Advisors, and Fidelity Investments. These ETF-based model portfolios built by Stadion, with fiduciary investment oversight from LeafHouse Financial, will be delivered through Vestwell’s modernized retirement platform and white-labeled as ETFVest.

“The small plan market is fraught with inefficiencies, so we’re always looking for innovative strategies to more effectively service it in a tech-forward, cost-effective way,” says Ben Thomason, EVP of Revenue at Vestwell. “With no revenue sharing, intra-day trading, low-cost yet highly effective funds, all built into a modern-day solution, we’re excited to bring ETFVest to market alongside some of the industry’s best advisory and asset management complexes.”

Featuring only ETFs with intra-day trading is unique to 401(k)s, but coupling that with funds from three of the industry’s most highly regarded asset managers makes it particularly appealing. In addition to their distinct portfolio construction, which offers the availability of specific beta exposure by factor, asset class, etc., ETFs offer price transparency with no revenue sharing. Additionally, using Vestwell’s intra-day trading capabilities may remove time out of the market as well as implicit trading costs.

“We’re excited to be a part of this innovative, tech-forward workplace retirement solution featuring several of our Franklin LibertySharesETFs, said Kevin Murphy, SVP, Head of Strategic Accounts for Franklin Templeton’s Defined Contribution Division – US. Innovation must be diverse and adaptive, and we feel this solution really checks those boxes with its inclusion of ETFs and transparent pricing delivered through a modernized technology platform.”

“In everything we do, we believe participants come first,” said Todd Kading, President of LeafHouse Financial. “ETFVest is designed to provide participants a low cost, diversified strategy for their retirement plan.”

About Vestwell

Vestwell is the digital recordkeeping platform bringing the 401(k) and 403(b) industry into the modern Fintech era. We have rearchitected the workplace retirement offering from the ground up and built an engine to power the $30T industry. Our customizable, open architecture, and white-labeled platform becomes a natural extension of financial services and payroll partners, while removing traditional friction points plaguing legacy recordkeeping. The result is an easier, more efficient, and all-around better experience for everyone, delivered at a fraction of the cost.

About LeafHouse Financial

LeafHouse Financial is an experienced, national discretionary investment manager and consultant for all types of retirement plans. LeafHouse acts in both a 3(21) and 3(38) fiduciary capacity for a multitude of private and public retirement plans that range from start-up to large institutions across the U.S. LeafHouse developed proprietary technology that is designed to prudently select, evaluate, and monitor investments that are solely in the best interests of plan participants and their beneficiaries. LeafHouse is a registered investment advisor. Registration does not imply a certain level of skills or training. More information about the firm, including its investment strategies and objectives, can be found in our ADV Part 2, which is available, without charge, upon request. Our Form ADV contains information regarding LeafHouse’s business practices and the backgrounds of our key personnel.