In the early 2000s, a wave of DC record keepers emerged with bold predictions, but ultimately collapsed, including Emplanet and GoldK, while ExpertPlan was sold to Ascensus. However, Ubiquity (formerly Online 401k), which focused on small plans, survived. Today’s batch of fintech record keepers, including Guideline, Betterment, and Vestwell, collectively raised $1.5 billion. While they face profitability challenges, they exhibit varied approaches and strategic pivots. Guideline emphasizes reaching out to advisors, Betterment shifted focus to distributing 401(k) plans through advisors, and Vestwell diversified into state programs and student loans. These fintechs leverage growing trends such as the explosion of small plans and the convergence of wealth, retirement, and benefits, driven by data and societal forces.
Despite skepticism from some industry veterans, these fintechs address a growing need and client base, supported by state mandates, tax credits, and group plans. Unlike their predecessors in the early 2000s, today’s fintechs benefit from cleaner data, advanced technology, and substantial capital infusion, positioning them to navigate the complexities of the DC industry and potentially reshape it in the process.
To read more, visit Fred Barstein’s article on www.wealthmanagement.com titled, “Are Fintech Record Keepers Viable?”
