Young retirement robo ForUsAll scoring high employee participation rates

The company's founders, who hail from Financial Engines, have grown the new business to $100 million in assets

Jan 20, 2017 @ 12:53 pm

By Liz Skinner

ForUsAll, a budding retirement robo-adviser launched by three former Financial Engines employees, is having more success convincing plan participants to save for their futures than the industry as a whole.

Companies using the automated advice platform for its retirement plans are seeing nearly 90% of eligible employees contributing to their 401(k) account, according to ForUsAll. That compares to about 84% of eligible participants with balances in 401(k) plans nationwide, the 2016 Plan Council of America retirement report issued earlier this month found.

The firm's founders credit their success with employee engagement to Dave, ForUsAll's tech-enabled virtual adviser. By regularly staying in front of employees through emails and texts, Dave keeps employees engaged, answers their questions, and gets people to stay in the plans, said Shin Inoue, chief executive and founder of ForUsAll.

“Our goal has always been to make it as seamless as possible for plan sponsors to offer good retirement savings plans,” said Mr. Inoue, formerly director of new business at Financial Engines.

Sunnyvale, Calif.-based Financial Engines is the nation's largest independent investment adviser, with total assets of $134 billion.

(More: How 401(k) advisers an make financial wellness programs more effective)

While at Financial Engines, which focuses on serving Fortune 500 companies, Mr. Inoue and his two co-founders found that small- and medium-sized companies were underserved and overcharged for retirement plans. They started ForUsAll to provide cheaper, technology-based services for companies of this size, he said.

ForUsAll costs about half of a typical traditional 401(k) plan available to small- and mid-sized businesses, Mr. Inoue said. The firm's technology simplifies the onboarding process and automatically enrolls investors into target date funds.

“You shouldn't have to work for a Fortune 500 company to have a good retirement,” Mr. Inoue said.

He started the firm in 2015 with David Ramirez, who was a portfolio manager at Financial Engines and is ForUsAll's chief investment officer, and Dave Boudreau, who was a customer service principal at Financial Engines and is heading up customer service, including "Dave," at ForUsAll.

(More: Automatic enrollment gaining ground in the smallest 401(k) plans)

In addition to convincing participants to save for their own retirements, the San Francisco-based firm appears to be presenting an effective argument to attract clients, as it grew assets on its platform to $100 million from $5 million at the start of 2016.

The ideal retirement clients of ForUsAll are businesses with $1 million to $10 million in assets and 50 to 2,000 employees, Mr. Inoue said. It's attracted many professional services companies, such as real estate management businesses and hotels.

CMC Properties, a firm using the robo platform for its 401(k), said cost and its employees were top of mind when selecting ForUsAll.

"We chose ForUsAll because we were looking for a plan that helps encourage higher participation and savings rates, lowers our costs, and helps our employees save for retirement,” said Chasta Postler, a CMC Properties' regional director.

ForUsAll reports average savings rates in its plans of 6.5% to 7.4%, compared to an average of about 7% for all plans, the Plan Council of America report said.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

The power of automation

With good data and great workflow processes, advisers can outpace the competition. Junxure's Robert DeFrancis offers some strategies for success.

Latest news & opinion

Nontraded REITs to post worst sales since 2002

The industry is on track to raise just $4.4 billion, well off the $19.6 billion it raised just four years ago, as new regulations hinder sales.

Broker protocol for recruiting a boon for clients

New research finds advisers whose firms have joined the agreement take better care of customers.

Meet our 2017 Women to Watch

Introducing 20 female financial advisers and industry executives who are distinguished leaders, advancing the business of providing advice through their creativity and hard work.

Raymond James executives call on industry to keep broker protocol

Also ask firms to pay for the administration of the protocol to 'ensure its longevity and relevance.'

Senate committee approves tax plan but full passage not assured

Several Republican senators expressed reservations about the bill, and the GOP cannot afford too many defections.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print