Oisín Breen

I have only one question - how is the NextCapital offering different than Financial Engines?  Selling to plan sponsors - check.  Installation fee - check,  software licensing fee - check, fiduciary liability - (probably) check, revenue share - hmm...I guess that's a new one.  Seems like the ability to do either passive, or active, allocation on the fly has been around for years - what's really new here?

I guess the case can be made that they can map annuities into their framework...perhaps that's something new.

I do think the days of offering valuable advisory services (as opposed to products) is upon us, but is there something "extra" that their offering relative to the Financial Engines offering of 15 years ago?

With fears rising that robo-advisors can disrupt $2-trillion target date fund universe, NextCapital raises fresh $30 million and wins five big customers, but can its software spur widespread TDF adoption?

NextCapital

Francisco Partners

Rob Foregger

The days when RIAs were the outsiders at the 401(k) party are fast coming to a close. What's new is that the mass of 401(k) assets 
is getting critical at about $3 trillion; fiduciary advisors are getting appreciated; fat fees and questionable kickbacks are getting exposed and stepping out of line is getting dicier as the Department of Labor tightens the regulatory screws.

The old reasons why the 401(k) business is attractive are still in place: there are fresh assets pouring in every month and when employees leave jobs or retire, they produce rollovers that build up IRA accounts for financial advisors. The drawbacks of getting into the 401(k) business are still in place, too. Dealing with retirement assets is really a second line of business and it remains -- unless you overcharge with hidden fees -- a low margin business with high potential fiduciary liabilities.

Still, the outsourcers, infrastructure and accumulated knowledge for RIAs to capitalize on is growing daily and a the mega-shift of assets away from brokers is making the 401(k) business riskier and riskier -- to ignore.

401(k) Stories

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TDFs are cash cows and asset magnets but also dumb robots in an era of smarter ones and the Chicago-based outsourcer is promising answers -- most recently to Franklin Templeton

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