The convergence of wealth management and plan advising took another step forward February 1st with the announcement that Pontera’s 401(k) management capabilities are now integrated into Envestnet’s financial wellness ecosystem.
Pontera, the NYC-based 401(k) fintech platform (formerly named FeeX) that enables financial advisors to trade and manage 401(k), 403(b), and other held-away retirement accounts, can now plan, review, and bill on employer-sponsored accounts in applications within the Envestnet | Tamarac platform.
“This integration enables advisors to manage 401(k)s on behalf of their clients and gives them the ability to include these accounts in their existing billing process.”
Envestnet’s Dani Fava
In a statement announcing the news, Pontera said the integration enables advisors to incorporate clients’ retirement savings account balances into holistic views of their entire financial life.
“Our integration with Envestnet reflects our collective commitment to delivering technology that helps advisors create better financial outcomes for their clients,” said Dave Goldman, Chief Business Officer of Pontera. “We are proud to partner with Envestnet to enable more clients to manage their retirement and investment allocations in a single view.”
Utilizing Pontera capabilities within Envestnet applications, advisors can view held-away account data, run aggregated and performance reporting, and bill on those accounts in the Envestnet ecosystem.
“We have a shared goal to help resolve a longstanding problem for retirement savers—the ability to have the entirety of their assets professionally managed by their trusted advisor to better achieve an Intelligent Financial Life,” said Dani Fava, Group Head, Product Innovation at Envestnet. “This integration enables advisors to manage 401(k)s on behalf of their clients and gives them the ability to include these accounts in their existing billing process.”
Envestnet is used by more than 108,000 financial advisors managing more than $5.5 trillion in assets.
Richter’s reaction
Michelle Richter of Fiduciary Insurance Services and the executive director of The Institutional Retirement Income Council, reiterated a statement she made on LinkedIn to 401(k) Specialist: “This integration means that soon, ‘Held away assets’ may no longer be a thing, and rollovers occurring at the time of retirement a substantially less assured thing, as wealth advisors using Pontera can be directly paid for advising consumers upon plan-held assets.”
Richter went on to tell 401(k) Specialist she believes that, “Envestnet has long since already won the ‘tech for wealth management’ game in which the rest of us are now mere pawns.”
“This integration means that soon, ‘Held away assets’ may no longer be a thing, and rollovers occurring at the time of retirement a substantially less assured thing”
Michelle Richter
She followed that by adding: “Pontera, while costly, materially changes the dynamic on whether or not a rollover happens. If fully integrated with Envestnet’s stack then it doesn’t even care whether the rollover happens, it profits either way off those assets.”
The degree to which Pontera fundamentally changes the game on whether or not rollovers happen, Richter continued, will rely both upon costs coming down and how the DOL enforces on 2020-02.
“But it’s already the case that legislation favors in-plan advice and cost advantage and that recordkeeping pricing models have changed plan sponsor sentiment around retaining participants in-plan (substantially more favorable than was the case five years ago),” she said. “So while the wealth managers will continue to capture the $1m rolls, I am less confident that most participants will roll in the future.”
SEE ALSO:
• Pontera, RFG Advisory Partner on Held-Away Accounts (Like 401ks)
• 401k Fintech Firm FeeX Gets Major Capital Infusion, Changes Name
• Envestnet Streamlines Divisions to Spur Financial Wellness Growth
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
