For many US workers, the journey to financial security is anchored in workplace retirement accounts that constitute a significant portion of their accumulated wealth. The 401(k) and 403(b) accounts embody more than just savings; they represent the comfort and security we all aspire to have in our later years. Yet, despite their importance, there is a striking gap in one’s ability to receive professional advice to effectively manage these accounts. This gap is due to challenges in cybersecurity, compliance, and data quality. While experts are frequently brought in for important life events like tax or legal matters, managing held-away retirement accounts has often been left to individuals to navigate alone.
Options for financial advisors looking to support clients in managing these assets have also been limited and are fraught with challenges. Many financial advisors decline to oversee this portion of their client’s wealth due to these hurdles, while others have had to make recommendations based on incomplete data and without oversight of the actual implementation of recommendations. Some directly use their client’s credentials for access, which brings about many risks around compliance, security, and custody. While there are platforms that provide basic visibility into the client’s 401(k) accounts, these solutions are hindered by the need for constant re-authentication, broken links, and imperfect data, and still do not enable the advisors to place orders on their client’s behalf.
Pontera revolutionizes the status quo and addresses this growing need by offering financial advisors a secure and compliant pathway to proactively manage their client’s workplace retirement accounts. That’s why we are excited to lead the company’s latest $60 million financing round alongside existing investors Blumberg Capital, Collaborative Fund, Hanaco Ventures, Lightspeed Venture Partners, and The Founder’s Kitchen.
A mission to help retirement savers better manage their wealth
When we first met Yoav Zurel, Pontera’s CEO and co-founder, we were immediately captivated by his steadfast determination to help individuals retire with greater wealth and financial security. Yoav and his team originally started by founding FeeX, a platform to help consumers compare and analyze fees across different retirement funds—a seemingly simple but, in reality, very complex problem that necessitated retrieving and reconciling constantly changing data from a variety of disparate sources. In the process of building that initial product, the team discovered a larger opportunity to provide consumers with a seamless way to receive proactive professional help with their 401(k) assets.
Research has shown that over 60% of plan participants wish they could completely hand over retirement planning to a professional. The team began to build out an order management system to fill this need in 2018 by leveraging their existing core platform and data infrastructure they had already spent years building. FeeX was subsequently rebranded to Pontera, drawing from the Latin word “pons” or “bridge,” to embody its mission to be the vital link connecting individuals with a better retirement.
Securing access and simplifying management of held-away assets
Historically, 401(k) accounts have largely been overlooked, as the processes for managing them were manual and insecure.
Gone are the days of having to overlook one of the largest aspects of clients’ portfolios. Gone are also the days of reactive, manual processes and insecure methods of accessing client accounts. Pontera enables financial advisors to proactively analyze and rebalance plan accounts without handling client credentials and accessing accounts. Advisors can seamlessly integrate high-quality data into the advisors’ existing systems by Morningstar, Orion Advisor Solutions, Addepar, Envestnet, BNY Mellon, SS&C, and more.
Importantly, advisors are now also equipped to make the best decisions for their clients without any conflicts. IRA rollovers are common in the marketplace and often drive revenue for advisors, but they can introduce additional costs to clients given the low fee advantages of maintaining assets in 401(k) accounts and other benefits. Now, advisors can, together with their clients, decide on what is best at a more holistic level.
A win for the retirement ecosystem
Pontera also stands out by providing value to all stakeholders across the retirement investment management journey. Consumers now have access to holistic financial guidance, transforming the management of their wealth into a journey of informed decisions and enhanced peace of mind, While financial advisors can help more clients while growing their business through increased assets under management. Additionally, employers and their plan custodians (financial institutions) benefit from longer participation through suboptimal rollover reduction.
Our enthusiastic support for Yoav and Pontera stems from a shared vision: a future where every individual has the tools and guidance necessary to build a prosperous retirement. We are excited to partner with the team on their mission to expand access to comprehensive wealth management for millions of people across the United States. Welcome!
Published:
December 7, 2023
