Stan Smith becomes CEO of SaveDaily, which has been around since 1999, way under the radar

March 5, 2018 — 10:38 PM UTC by Dina Hampton


Brooke's Note: In free enterprise, they don't award points for degree of difficulty but if you venture into a market everyone else considers impossible -- and you succeed -- then you might get rich. Stan Smith quit his day job at Fidelity to go after micro 401(k) accounts in places like Dubai, Africa and America's hinterlands. He is now CEO of SaveDaily, which sounds faith-based and, perhaps with God's help, has survived since 1999 and is now ready to gear up in 2018 with new capital, new hires and a belief that technology has finally caught up with its before-its-time business plan. I don't think I have to explain how difficult his mission is. Or how cool it'll be if it clicks.

A Fidelity Investments wholesaler of 401(k) investments with a $34-billion West Coast book of business has jumped ship to become CEO of one of his former clients -- a dot-com era 401(k) robo-advisor that never gave up.

Stan Smith joined SaveDaily Inc. last month to raise its profile and raise capital. Its last raise of $3 million came a staggering 18 years ago. Smith was with Fidelity for the previous 15 years.  

The Costa Mesa, Calif.-based firm offers low-cost recordkeeping and other outsourced services to banks, brokerages and advisors through a variety of white-labeled portals. Through the portals, advisors offer the services of firms like Fidelity. See: Why exactly Fidelity chose 2018 to levy visible .05% 401(k) surcharge on Vanguard funds

Acorns and breadcrumbs

Founded in 1999 by Jeff Mahony (he is now chairman), the firm now has 70,000 accounts, all with balances under $10,000 with the average account balance clocking in at about $2,000. The firm declined to name the credit unions and banks SaveDaily services.

Smith, 42, spent almost his entire career in the Newport Beach, Calif. offices of Boston-based Fidelity, consulting with West Coast banks and trusts, retirement advisors, RIAs and recordkeepers with a cumulative $34 billion in managed assets.

One of those clients -- for seven years -- was SaveDaily. 

Though Fidelity is known to be strong in bringing 401(k) plans to small companies, Smith wanted to be part of a venture aimed at micro-investors -- an area of the market heating up with the surging fortunes of Stash, Acorns, Robinhood and a host of 401(k) robos. See: As Acorns grapples with monetizing 1.1 million micro-accounts, the laid-back LA robo-advisor brings Wealthfront’s former chief exec onto its board.

In Mahony's words, SaveDaily's mission is: "Doing everything we can to support the everyday savers by bringing high-net-worth services, with no transaction fees, to those that may only have as little as $1 to invest.” See: As the 'finance Snapchat,' Stash rakes in another $40 million of VC funding as it onboards at rate of 1,000 new 'HENRY' investors every business day.

Dubai and beyond

SaveDaily got its start with a 2000 funding round from investors including EQ Partners based in Seoul, Korea; financial writer Harry Dent Jr.; and Eric Solis. One of Smith's priorities will be get to work raising more money from private equity sources.

He'll also start hiring with an eye toward upping the firm's employee count from its current 20 to 30 by year's end, including three new customer reps to staff the phones for Go Vest, the firm's robo component, and three engineers to build out portal and website interfaces.

Surveying the competition, Smith calls established outsourcers like Envestnet Inc. and Riskalyze "great brands" but points out that they offer dashboards for advisors whereas SaveDaily partners with institutions in offering portals for the end-investor.

Smith says SaveDaily has another leg-up on the competition -- especially in regard to newer startups -- by virtue its international reach. "We're global -- in Dubai, Africa. fintech is a global phenomenon," he says, adding that one developer is currently posted in Dubai. Mahony is currently visiting Dubai and Smith plans to travel there later this month.

Vexed ex-pats

The overseas market, Smith says, is starved for retirement products, as 401(k)s have minimal reach abroad.

"Coming from the banking channel, there's no retirement channel for spreading 401(k)s to non-U.S. midsized companies," he says, a situation particularly vexing for American expatriates.  See: Power Player: Larry Raffone is racing to 'lock up' the 401(k) market by taking its robo head start and combining it with a semi-national RIA.

No people referenced

Share your thoughts and opinions with the author or other readers.

Submit your comments: