“Advisors are under attack,” Jay Jumper bluntly said. “Retirement plan providers are using their 401(k)-plan access to get the participants' other assets."
It's a variation of the who-owns-the-participant-relationship conundrum. Jumper, CEO and President of Chattanooga, Tenn.-based Future Capital, a fintech solution “specializing in personalized services for workplace retirement plan participants,” added that for every in-plan dollar, his firm sees an additional $3 to $5 of outside assets.
It’s why Future Capital positioned itself at the proverbial convergence of wealth and retirement.
“Everybody’s trying to figure out how to take advantage of that,” he explained. “The convergence has created new demand for a workplace wealth solution. When it comes to outside assets, advisors have traditionally focused on serving the affluent market. To unlock new opportunities, we have to meet the mass affluent where they are—and that’s in the workplace.”
Noting that his mother retired 30 years ago with $54,000 in her 401(k), Jumper said she had little to no financial help because her assets weren’t large enough. It’s why he started Future Capital (originally ProNvest): to make sure professional financial advice and investment management were available to everyone who needs help managing their workplace retirement account.
“We bring customized management of 401(k) or 403(b) assets to the mass market, and we do so within the confines of the plan’s fund lineup. We personalize the managed account experience to help participant’s align their investment strategy with their goals and objectives.”
He's particularly proud of the firm’s digital onboarding solution, and while a small part of the business is direct-to-consumer, his main distribution partners are broker-dealers, banks, insurance companies, and "anybody who has a relationship with a large number of customers."
Noting the high amount of activity happening in the wealth and retirement plan marketplace, he once again emphasized that, as he sees it, advisors are under attack.
“Goldman bought Next Capital last year, and Morgan Stanley bought a company called Blooom,” he noted. "Empower launched a personal wealth division. There’s a lot of competition for outside assets, and providers are using workplace plan relationships to compete directly with the advisor for those assets."
Without a plan to protect those relationships, Jumper argued, the larger firms will win.
“That’s where this convergence of wealth and retirement is really going on,” he concluded. “In the old world, advisors could pretty much expect to get a majority of rollovers. That’s just not the case today. Advisors have to figure out a way to service their existing customers’ assets, or they’re going to look up in a few years and wonder what happened to their business.”
