Can Vestwell Revolutionize How Advisors Sell Retirement Plans?


Jun 02, 2017


Wealth Management


When Josh Brown, the CEO of Ritholtz Wealth Management and author of the popular finance blog, “The Reformed Broker,” hosted the 2017 Benzinga fintech awards, he name-dropped Vestwell as a company with the potential to radically change the wealth management industry.

That’s right, Vestwell, a company looking to make it easier and more cost-effective for registered investment advisors to design, sell and administer 401(K) and 403(b) plans using digital automation. What exactly does Brown find so revolutionary?

Brown got started in the retirement plan space a year ago, and is considering adopting Vestwell for some of their clients. But Brown thinks the user experience of Vestwell is such an upgrade over incumbent platforms that it could attract swaths of new advisors to the$6.8 trillion dollar defined contribution market currently dominated by large financial institutions.

Vestwell founder and CEO Aaron Schumm, believes his company has the potential to make an impact on the industry, he doesn’t necessarily plan to take down the biggest players in retirement. He says Vestwell works best at creating plans for small to midsized companies with less than $50 million in assets. Schumm has also talked about potentially partnering with incumbent retirement providers about using Vestwell to service this client segment.

If Vestwell gains enough traction, it could encourage existing providers to update their own technology platforms for advisors, which Brown said currently range from bad to terrible. Just accomplishing this would be enough to qualify Vestwell as revolutionary in his book.

“It’s not a comment on how much marketshare Vestwell will take, it’s a comment on if it could be game-changing with their approach,” Brown said. “They are asking the question, ‘why does this have to suck so much?’ That’s where the best fintech comes along. It answers that question.”

Schumm is hoping Vestwell answers that question and shows that for independent RIAs, selling 401(K) plans really doesn’t have to suck at all.

If Vestwell can take something that takes Vanguard two weeks and condenses it into a few minutes, it’s going to open up the accessibility for a whole host of firms that don’t have huge back offices and don’t have the resources to dedicate. More advisors would be doing the retirement plan business if it wasn’t such a huge time eater and it wasn’t so cumbersome.

Josh Brown, CEO - Ritholtz Wealth Management


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