Ask Yon Perullo the all-important question about who owns the 401k participant, and, not wanting to alienate client constituencies, he delivers a very diplomatic answer.
“I’m not sure I have much to add to that conversation,” Perullo, Chief Executive Officer with fiduciary analytics firm RiXtrema, said. “Everybody wants to own the participant, but we give the people who want to own the participant the tools to make that happen.”
The company currently focuses on filling 401k advisor prospecting pipelines, which is RiXtrema’s niche. Data is a commodity, something many people have. The key is helping advisors use it to grow their businesses.
“We’ve got this whole marketing system where you can take all the information off the 5500 and put it into these customized emails,” Perullo added. “We have a database of what’s going to be 3.1 million contacts, but you can filter it the way you want.”
The reason for so many contacts is that it’s challenging to identify who at a firm can help with growth. Having all those contacts, LinkedIn profiles, emails, etc., is really powerful for an advisor.
RiXtrema got its start in risk management before moving into the 401k side of the industry. Acquiring Larkspur Data Resources in 2018 resulted in a focus on 5500 data, and a product called Planisphere (now Larkspur Executive).
“It has a more straightforward user interface, but we had to take it to the next level. So, we integrated marketing quizzes, email templates, email campaigns, and all that stuff. Now we’re bringing that marketing engine back over into the risk management side so that you can do some of the same things with your prospects and clients on the wealth management side.
Unlike its various number-based competitors who value “keeping it simple,” RiXtrema digs into different scenarios; what happens if the Fed continues to raise rates or China implodes? What about specific election outcomes, really any number of other possibilities? How will it affect a 401k or wealth portfolio?
“And it’s not just one answer. It’s more that it could happen if these scenarios come through,” Perullo said. But he pushed back on Monte Carlo simulation comparisons.
“If you think about Monte Carlo, there’s a whole series of possibilities that can almost range from you’re going to be a billionaire to you’re going to be broke and everything in between,” Perullo explained. “Yet, you don’t know what those in-between things are. Our system tries to help you figure out what the path is in-between and if you’re comfortable with the risks you’re taking based on the scenario.”
It’s not that advisors and clients will be right 100% of the time with these scenarios, he concluded. Still, they’re thinking about all the possibilities. When they happen, it’s therefore not a surprise when the portfolio reacts, even if it’s not exactly what they predicted.
Founded in 2010 as a quant risk management system that started serving advisors in 2015, RiXtrema serves 7,000 retirement plan advisors.
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