ESG Offerings Benefit Both Investors and Providers

ESG

As Environmental, Social, and Governance (ESG) investing becomes more popular, the wealth management and 401(k) industry is taking notice.

In fact, more than $1 of every $5 invested in the U.S., a total of $8.72 trillion, goes to socially-responsible investing (SRI). And in 2017, 75% of investors — and a whopping 86% of millennials — were interested in sustainable investing.

While the opportunity to invest in companies that align with an investor’s ethical standards, beliefs, and values sounds appealing, the ultimate question is whether ESG is good for the investors and funds involved.

We believe it is, and here’s why.

Good for investors: ESG investments perform competitively

ESG-screened investments perform as well as their non-screened peers 90% of the time, according to more than 2,000 academic studies of ESG performance.

These investments can reflect the values of those who are passionate toward issues such as environmental conservation, gender equality, gun control, and social justice.

2015 study also found that over a 10-year period, companies with the highest ESG scores (those that focused on ESG issues most important to their businesses) more than doubled the performance of those with lower ESG scores.

With results such as these, investors can be optimistic about the positive impact such investments may have not only toward their supported causes and companies, but also toward their financial portfolios.

Source: Khan, Mozaffer, and Serafeim. “The Accounting Review.”

Good for the industry: Attract more investors and business

SRI funds may also offer advisors and plan sponsors an advantage in competitive markets.

In fact, advisors in a 2017 study reported a 32% increase in interest in ESG investing than in the prior year.

Fifty-three percent of millennials, 42% of Gen Xers, 41% of baby boomers, and 39% of seniors also made investment decisions based on social responsibility factors.

A survey of Fortune 1,000 employees revealed that 74% of 401(k) plan participants would like their companies to offer socially-responsible funds in their plan investment menus.

Plan sponsors who offer such options can appeal to an increasing number of socially-engaged employees.

The DOL looks well upon SRI in retirement portfolios

In its latest Field Assistance Bulletin, the Department of Labor (DOL) confirmed that defined contribution plans can include SRI options, as long as they perform as well as and cost no more than traditional unscreened investment options.

Plans can even include ESG-screened target date funds as qualified default investment assets (QDIAs), as long as they don’t have lower-return or higher-risk potential than comparable non-ESG alternatives.

The tipping point

Increasing demand, competitive performance, and the DOL support combine to make SRI funds more attractive than ever for plan sponsors and participants. It’s time for fund managers to consider offering ESG target date funds and ESG exclusive retirement plan options and platforms.

 

A “Reasonable” Approach to Who Pays Plan Fees

plan fees

Written by Allison Brecher, Vestwell’s General Counsel

The recent barrage of litigation and emerging regulations about retirement plan fees have put plan sponsors on heightened alert to make sure the fees incurred by the plan are reasonable and that they are paid properly. It’s a difficult assessment to make, complicated by the broad array of administrative expenses, with confusing terms like back-end load fees, revenue sharing, and 12b-1 fees.  It’s hard enough for plan sponsors to understand what fees service providers are charging, much less whether the plan or plan sponsor should pay for them. However, it doesn’t have to be and there are plenty of opportunities for advisors to assist in making things more clear.

Depending on the plan sponsor client’s philosophy, sponsors may want to shift as much of the plan’s costs, like recordkeeping expenses, legal fees, and mutual fund expenses, to the plan and participants. Unfortunately, a plan sponsor can significantly harm the plan, and itself, by doing so without careful analysis.

Where to start?

The plan document may specify whether administrative expenses can be paid by the retirement plan assets. If the document says only the plan sponsor can pay, then the plan must reflect that. Some plans require the plan sponsor to advance the payment and get reimbursed by the plan later, in which case the payment and reimbursement should be made within 60 days in order to avoid a Department of Labor requirement for a loan agreement between the plan and sponsor.  If the plan is silent, then analyze DOL regulations to determine if payment by the plan is permissible. Costs relating to plan formation, termination, and design are typically paid by the plan sponsor whereas recordkeeping and investment consulting expenses can be paid by the plan.

The plan can only pay for reasonable expenses – but what is “reasonable”?

This is the central issue in dozens of lawsuits. Participants rely on their plan sponsor to negotiate the best deal with service providers and it therefore becomes the sponsor’s fiduciary duty to make sure the plan is only paying reasonable fees.

Unfortunately, it can be hard to understand all of the direct and indirect compensation paid to plan providers. Sponsors need advisors’ help to ask the right questions. Some expenses, like sales commissions and back-end load fees on mutual funds, are paid out of the assets’ investment returns and therefore charged indirectly to participants. Those charges may not be apparent on participants’ benefit statements. Worse yet, there is no single benchmark for retirement plans to use as a baseline comparison. For this reason, some sponsors prefer to pay for expenses themselves since only plan assets, not corporate assets, are within a regulator’s purview.

Advisors can help sponsors by reviewing the expenses paid by similar plans. All ERISA plans file Form 5500s annually, which are public and should disclose all fees paid by the plan. Making an apples-to-apples comparison can be difficult because some sponsors do not know, and therefore cannot disclose, all indirect compensation. Advisors can also help clients prepare requests for proposals to understand available pricing options, such as flat fees or per participant fees that are more transparent and easier to understand. They can also help evaluate the quality of services, since the DOL acknowledges that cost alone should not be the only determinative factor.

Monitor, monitor, monitor

Sponsors should periodically reevaluate the plan’s fees. Even though a sponsor hires consultants to assist, they remain a fiduciary and must regularly evaluate the changing marketplace. As always, documenting their decision making process is critical. Sponsors must also remember to check whether services are being provided by a party-in-interest and satisfy the prohibited transactions rules.

Understanding the Risks of Being a 3(38) Fiduciary

3(38) fiduciary

Retirement plan sponsors often turn to their financial advisors to help them handle key responsibilities. Since navigating the legalities and complexities of retirement plans is typically not their core competency, it’s natural for plan sponsors to offload many of the associated tasks required for proper plan administration.

Enter your role as a 3(38) fiduciary.

While you may welcome the business relationship of being assigned as the 3(38) fiduciary, it’s also important to understand the legal implications and risks involved with performing the role.

What’s a 3(38)?

In a retirement plan, 3(38) fiduciaries are given discretion over most decisions regarding investment choices, such as implementing the lineup of suitable and appropriate investment options to be offered in the plan. While plan sponsors are still responsible for overseeing these fiduciaries, they generally transfer much of the risk and responsibility associated with plan monitoring and selection over to a 3(38) fiduciary.

This is unlike the role of a 3(21) fiduciary, also known as a “co-fiduciary,” who has less authority when it comes to plan decisions. While plan sponsors may rely on the advice of a 3(21) fiduciary’s investment analyses and recommendations, it is ultimately the plan sponsor’s role to make major investment plan selections.

Today, the latter relationship is more common, with 82% of retirement plan advisors serving as 3(21) fiduciaries, despite the the number of 3(38) offerings doubling since 2011, likely due to the rise in litigation targeting 401(k) plan sponsors.

With great power, comes great responsibility

While you may charge a premium for performing the 3(38) role, you may not wish to take on the added risk of fulfilling much of the ERISA plan sponsor’s legal requirements. This is especially true for smaller plans where you may not be able to make the business case for the services involved. It’s worth considering the amount of business you’ll be providing in relation to the responsibility that comes with it.

As a 3(38) fiduciary, you are committing to serve as the formal investment manager for an employer’s plan. As such, you will be required to provide regular fiduciary reports to the plan sponsor, and document your rationale for investment and fund change recommendations as well as any time you execute on said recommendations.

Adherence to IPS

With the addition of full investment discretion, you must document that you are adhering to the plan’s Investment Policy Statement (IPS), and that all investment decisions are made in the plan participants’ best interests. You may even be asked to help develop an IPS. Importantly, as a 3(38) fiduciary, your processes and methods must be that much more detailed and circumspect than those of a 3(21) fiduciary.

Expertise Required

Being a 3(38) fiduciary is a specialized role that requires specialized expertise. Advisors who dabble in the 401(k) space and advise only a few plans may not wish to take on the responsibility – and liability – required. Fortunately, that’s where external providers can help with the heavy lifting. Integrated solutions now offer you the option to offload the certain levels of fiduciary liability while still putting the power in the advisor’s hands to personally guide clients with their retirement decisions. We recommend exploring how these options ease the fiduciary liability you carry while giving your sponsors and participants the customized plans and advice they value most from their trusted advisor.

 

Helping Your Clients with Required Minimum Distributions

Required Minimum Distributions

Among the many compliance requirements for a 401(k) plan is the obligation to make required minimum distributions (RMDs) to participants each year. Although the distribution need not be made until April of the year after the participant turns age 70 1/2, advisors should check in with their plan sponsor clients throughout the year to make sure they are their service providers are prepared. Participants and employers face stiff penalties – including plan disqualification – if distributions are missed or aren’t large enough. Advisors can also help sponsors now avoid those penalties by checking for and quickly correcting missed RMDs.

Some background: What is a RMD and how is it calculated?

Participants must start making withdrawals from their tax deferred retirement plans by April of the year after they turn age 70 1/2. Individuals who turned 70 1/2 in 2017 face double pain: the IRS requires them to take a RMD by April 1, 2018 and a second RMD by December 31, 2018. RMDs must then be taken by December 31 each year thereafter. These minimum distribution rules apply to tax-deferred retirement plans, including IRAs, 401(k) plans, 403(b) plans, profit sharing plans, and other defined contribution plans.

 Advisors should help plan sponsor clients throughout the year

The IRS assesses large penalties for missed RMDs. While the major crunch time for making RMDs has now passed, don’t let your client forget to check for any missed distributions. Ask the recordkeeper to confirm that all appropriate participants were identified and review the plan language to double check. If a RMD is missed, but detected and corrected quickly, you can save the plan and participants a big headache. Advisors should also understand the demographics of their plan sponsor client’s tax-deferred retirement plans and caution them to pay special attention to aging participants who turned or are nearing age 70 1/2. Advisors can also help sponsors locate missing participants, which the IRS also requires in order to maintain tax qualified status.

Opportunities for advisors to ease the pain and help with planning

The RMD is included in taxable income. Therefore, the RMD can push a participant into a higher tax bracket and become subject to additional state and local taxes as well as a 50% excise tax for missed or inadequate RMDs.

Ensuring clients plan early for RMDs is key. For example, advisors can help clients avoid having both RMDs taxed as income for the same year by encouraging them to make the first withdrawal in the year the participant turns 70½. Advisors should also help clients evaluate whether they missed taking a RMD or received a RMD that wasn’t large enough. The participant may be taxed an additional 50% penalty on a missed or insufficient RMD. If there was a reasonable error, the advisor can help the client request a tax waiver by filing Form 5329 and preparing a good faith explanation.

Advisors can also help reduce a client’s tax burden by making a “qualified charitable contribution” that will count towards the RMD and can be excluded from taxable income.  Advisors should also help participants review their benefit plan document, since that might allow them to wait until the year they actually retire to take the first RMD. Individuals who own more than 5% of the business sponsoring the plan must take the distribution, regardless of whether or not they are actually retired.

For individuals with multiple tax-deferred accounts or inherited tax-deferred accounts, the advisor may be able to help a participant select which accounts to take the withdrawal. For example, investors who make IRA and 401(k) contributions with after-tax money do not receive any tax deductions on their contributions. Therefore, it can be less expensive for them to make RMDs from those after-tax accounts.

Advisors should also help clients who contributed only on a pre-tax basis to carefully examine their retirement plans. For individuals with multiple IRAs, RMDs may be aggregated. In other words, the IRA owner calculates the RMD separately for each IRA account, but may take a distribution from only one of them to satisfy the total RMD requirements for all of them. A client with a 401(k) (or other defined contribution plan) and a traditional IRA cannot aggregate and must take a separate RMD from each plan. Advisors can also assist clients with reinvesting their distributions and estate planning strategies by advising how to pass their distributions onto their heirs.

Education is key…for everyone

Be it plan sponsors, their participants, or your private wealth clients, it’s helpful to know your demographic and who might be affected by RMDs. But most importantly, it’s important to continue to educate yourself, and your clients, to ensure everyone is prepared for what’s in store.

Your Clients’ Plan Audit Qs, Answered

 

Plan Audit

If your plan sponsors aren’t already, they should be preparing their year-end report. The penalties for failing to conduct an audit can be substantial. Issues can surface during the audit that may be easier and less expensive to correct now versus down the road.

For plans with 100 or more eligible participants at the start of the plan year, the annual report must include an audit report issued by an independent qualified public account stating whether the plan’s financial statements conform with generally accepted accounting principles. An audit should comfort participants, knowing their plan’s operating processes are in good order.

We’ve put together some common questions and answers to help your plan sponsor understand the audit rules – and so you can ensure your clients are taking them seriously.

IS THE PLAN EXEMPT FROM THE AUDIT REQUIREMENTS?  

Governmental plans, church plans, and certain 403(b) plans that qualify under safe harbor are exempt from the audit requirements.

HOW DOES A PLAN SPONSOR FIND AN AUDITOR?

ERISA requires that the auditor be independent. and Sponsors should utilize a firm that is separate from the employer’s accounting firm and does not do any other business with the company or any of its directors or owners.

HOW IS THE NUMBER OF ELIGIBLE PARTICIPANTS CALCULATED?

The eligibility rules can be complicated.  In general, plans with 80 to 120 participants at the beginning of the current plan year may choose to complete the current annual report using the same “large plan” or “small plan” category used for the previous year. If the Plan previously filed as a “small plan” last year, it may wish to again for the following plan year.

WHAT DOCUMENTS DO PLAN SPONSORS NEED TO PROVIDE?

Every audit is different, but the auditor will likely need to review records relating to participant enrollment, plan contributions and distributions, auto-enrollment, and payroll files. Sponsors may need to provide records relating to tax compliance, related party transactions, and the Plan’s benefits committee (if it has one).

HOW LONG WILL THE AUDIT TAKE?

Sponsors should begin the audit process at least 90 days before the Form 5500 deadline to allow enough time to gather documents, follow up on open items, prepare financial statements, and wrap up.

HOW MUCH WILL THE AUDIT COST?

An auditor may charge $2,500 – $10,000, or more, depending on the size and complexity of the plan.

Yes, Plan Sponsors are Still Fiduciaries

 

fiduciary

You may be confused by the recent news about the DOL Fiduciary Rule: Was the rule declared invalid? Will the SEC move ahead with its own Fiduciary Rule?  Will the Supreme Court issue a decision? Your confusion is appropriate as the status and future of the DOL Fiduciary Rule is still in flight. However, one constant remains and that is the Plan Sponsor’s fiduciary duty to the Plan and its participants.

ERISA and the DOL

The DOL’s Fiduciary Rule was finalized in 2016 and was supposed to go into effect at the start of 2018.

This rule was designed to eliminate financial advisor conflicts of interest when dealing with client retirement accounts. While it had provisions relating to 401(k) plans, it’s important to remember that any delay or even the possible nullification of the rule does not impact the fiduciary duties of a 401(k) plan sponsor.

Any financial advisor who works with plan sponsors can help ensure that their clients are aware of this.

A sponsor’s fiduciary role

 ERISA cites five standards of fiduciary care on sponsors of retirement plans. These boil down to the fact that a plan sponsor must make all decisions with the best interests of the plan participants in mind.

One key standard that has received attention in recent years is the responsibility to keep expenses low for plan participants.

While there is no firm standard for this, this issue has been the basis of a number of lawsuits against plan sponsors. Most of these suits have been brought against large employers, however, in recent years, even smaller plans have not been immune.

Reach out to clients now

 Periods of market volatility signal good opportunities to reach out to your current and prospective clients.

Start by confirming that their current plans are low cost and perform relative to their asset class peers. Find out:

  • Are all fees and expenses transparent, both those that are paid from the participant’s accounts and those paid by the sponsor?
  • Is there a process in place to select, monitor, and (when needed) replace investment choices?

Ideally, your client has an Investment Policy Statement in place for the plan. A solid, consistent, and documented investment process is a great way to demonstrate that the sponsor is acting in a responsible fiduciary capacity.

Beyond just meeting their fiduciary obligations, savvy plan sponsors want to provide the best possible retirement vehicle for their employees (and themselves) to ensure that employees can retire on time.

Advisors are also fiduciaries

 As an advisor you have two options as a fiduciary.

A 3(21) fiduciary serves as a co-fiduciary with the plan sponsor making all final decisions as to the plan’s investments and other decisions including the selection of service providers.

A 3(38) fiduciary has the discretion to make all investment and provider decisions; this is delegated to the advisor by the sponsor.

NYC Startup Vestwell Raised $8M

$8M

1/3 of Americans have nothing saved for retirement while half have less than $10K saved.  The outlook for retirement savings has been bleak but it doesn’t need to be.  Vestwell is a digital platform targeted towards financial advisors that can use the platform to ensure their clients can offer retirement plans for their employees.  Pensions have all about disappeared and employers need low cost ways to offer retirement investment options for their employees and employees need the help of their employers to achieve their retirement goals.  Vestwell facilitates this seamlessly and efficiently. No longer are employers forced to adopt out-of-the-box plans that do not meet their and their employees needs.

AlleyWatch spoke with founder Aaron Schumm about the startup, their Series A round of funding, and the state of the retirement industry.

Who were your investors and how much did you raise?

Thank you. We are very excited about closing our Series A. We raised $8M, led by F-Prime Capital. The round was entirely inside, with the same VC firms participating in our Series A. To us at Vestwell, it’s great to have such strong commitment from a highly talented team of investors around us.

Tell us about your product or service.

Vestwell is a turnkey solution for financial advisers providing them with the ability to offer clients a retirement plan without taking on the risk and costs typically associated with creating one. We remove the friction points of confusion, cost and compliance overhead that come with traditional retirement plans. Vestwell’s digital platform allows for seamless plan design, automated onboarding, and low-cost investment strategies, making it easier for employers to offer a retirement plan. Vestwell becomes an extension of the financial advisor’s services, acting in everyone’s best interest while scaling through technology and allowing financial advisors to focus on clients.

What inspired you to start the company?

My own experiences are what drove me to start Vestwell. Being a product person by trade, having cofounded a wealth management platform (FolioDynamix, now owned by Envestnet), I experienced first-hand, the difficulties in offering a retirement plan to our employees there. Being a huge advocate of advisors, with a deep understanding of how to build a scalable FinTech platform for the financial services landscape, I thought it was long overdue that we put a better solution in the hands of advisors to help their clients, the way they want to help them.

How is it different?

The 401k industry has been around for 40 years and sliced a million ways. Our differentiators are centered around how the platform is architected to scale an advisors practice while helping ease the pain, expense, and liability an advisor, plan sponsor and participant may be beholden.

Each user (advisor, company, and employee) has their own dashboard and interface that can sit across multiple record-keepers, custodians and executing brokers, without changing the user experience. Advisors no longer have to either shove a company in a box that doesn’t fit the company or customize a plan through various providers that won’t allow an advisor to scale his or her practice. We’ve figured out how to deliver a custom, white-labeled (e.g., ABC Advisors Retirement Platform), solution at a fraction of the cost, but still allow the advisor to do what s/he wants to do for their client while being compensated for it.

What market you are targeting and how big is it?

We work with RIA’s, independent broker-dealers, asset managers, and bank/trust custodians to equip them with a solution for advisors to services plan sponsors and employees at scale. The target plan sponsor size is $500K-$50M (2-2K employees). Upwards of 90% of this market is serviced through financial advisors, but they need a better solution to help their clients more effectively. The total asset breath in this space is upwards of $25T.

What’s your business model?

Primarily Vestwell charges basis points in an a-la-carte fashion based on the services provided. The solution is a full-service, unbundled turnkey suite. We become an extension of the advisory firm. They do what they do best, and we fill in the rest to compliment the advisor.   For example, if an advisor wants to be the 3(21) or 3(38) investment manager on the plan or hire a sub-advisor, they can do so, and we facilitate the technology, administration, trading, custody, and clearing, in a white-labeled capacity.

What should everyone know about retirement?

EVERY employee in America should have access to a 401k plan. It’s crucial for saving for retirement in one of the most effective ways possible, especially given company matching (free money) and tax deferrals. But, one should be mindful of the plan design, legal liability (as a fiduciary) and the cost, including the investment fees and ongoing administration. Paying too much or exposure to too much liability can be detrimental to a company or employee in the future. Fear or uncertainty shouldn’t stop one from setting up a plan or investing in one. It just needs to be clear, easily consumable and structured in a way that aligns everyone’s best interest.

What was the funding process like?

We were incredibly fortunate in our funding process. We hadn’t, officially decided to raise our Series A, with plenty of runway ahead of us. There was a lot of outside interest in Vestwell. But, our Series Seed investors said: “Listen, we are behind you 100% in whatever you feel is best for the company, and we are happy to do the round ourselves to help take Vestwell to the next level.” The group around the table have been a delight to work with, and added a significant amount of value beyond just capital. So the decision to keep the round internal was easy.

What are the biggest challenges that you faced while raising capital?

It’s a massive distraction from the business to raise capital. My focus was to keep the internal employees involved very small and contained, so the rest of the team could focus on funding while I finished up the funding.

What factors about your business led your investors to write the check?

Our investors are all there for specific reasons. We had an opportunity to be supported by teams that knew FinTech, the retirement industry, advisory practice, and B2B2C scaling better than anyone. They didn’t need much convincing. We all saw the fit and the strategic direction of the company. They were happy to support those efforts and take this to the next level.

What are the milestones you plan to achieve in the next six months?

We’ve already signed over 50+ advisory firms and are onboarding plan sponsors continuously. The next few months are focused on scaling faster and faster, while delivering on a few key strategic platform features we think will delight our users.

What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?

Listen, startup life is hard. There is zero glamor in it. I feel that many people have a skewed perception as to what it means to be an “entrepreneur.” But, I do stand by the notion that if you believe in what you are doing, you love it, and most importantly, you can add real value to this world and society, then it’s worth pursuing. One has to stay highly focused on how to add value a segment of the population with a more significant goal of sustainable benefit for all. If you can do that, while creating a clear path to a viable, sustainable business, you’ll find funding. In the meantime, ignore the fluff. Ignore the distractions. Stay focused.

Where do you see the company going now over the near term?

Generically, growing, scaling and providing value to advisors, companies, and employees. Specifically, I want to position ourselves to equip every financial services provider to create a more meaningful interaction with the American workforce through technology, while being a viable, scalable, profitable business.

Where is your favorite fall destination in the city?

These days, I feel my destinations only include our home, office, and an airport. But, my wife and I love taking our little 11-month old son to nearby Central Park or along Riverside, maximizing as much time together as we can, given our overly hectic schedules. People always say it, but it’s incredible how much joy and renewed perspective children give you.

Vestwell Announces New Joint Offering with Riskalyze

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

joint offering

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