Future Capital poaches RayJay exec. after Black Diamond deal explodes its access to RIAs who want to manage held-away 401(k) assets using its software

With its business burgeoning as the recordkeeping glue on held-away 401(k) accounts for RIAs, Future Capital has just hired Hannah Wilson as its first chief operating officer (COO).

The Chattanooga, Tenn., software and managed accounts vendor made the personnel move – at Raymond James' expense -- in the wake of a pivotal vendor agreement with  Black Diamond.

"Hannah's appointment comes at a pivotal time as we continue to expand our services to meet the growing demand," said Future Capital founder and CEO Jay Jumper in a June 3 release.

“Her expertise in operational excellence and strategic leadership will be instrumental,” he adds.

Black Diamond, which serves as reporting software for 2,700 RIAs with trillions of dollars of administered assets, made Future Capital its default option in a December deal. It will assist RIAs in executing the management of clients' 401(k) accounts. See: Pontera-like play wins Black Diamond deal.

Granting control

Wilson, who was RayJay's director of investment banking experience, saw opportunity in the operational challenges of steep growth.

“I'm joining Future Capital at such an exciting time along its growth journey … I look forward to strengthening our operational framework," she said in the linked release.

Traditionally, RIAs wait patiently for clients to roll over their 401(k) balances into IRAs. But with the emergence of software like FutureCapital's and Pontera's that picture continues to evolve. Those services can place employer-plan assets under RIA discretionary control.

Growth pains

FutureCapital is a Pontera-like business that uses a mix of data-sharing agreements and credential-sharing to let advisors directly manage client 401(k) accounts. It has recently signed deals with Hantz Group, AssuredPartners Investment Advisors, and Axos Clearing. See (Briefs): Future Capital and Pontera score $15-billion AUM.

At one time, it was feared that the gig was up for managing held-away assets after 401(k) giant Fidelity Investments disallowed the data-sharing agreements and credential-sharing known derisively as “screen scraping.” See: Pontera password-sharing business model is a bridge too far for Fidelity; it bans the practice for its 401(k) plans in blow to the fintech's future

But companies like Pontera and Future Capital have not given up and are even investing in talent to deal with potential growth pains.

Assets in defined contribution (DC) plan assets were pegged at $12.2 trillion at the end of the first quarter ending March 31, of which $8.7 trillion was held in 401(k) plans, according to the Investment Company Institute.