Allianz and Vestwell partner on 401(k) distribution

The life insurer is promoting Vestwell's automated services to retirement-plan advisers at independent broker-dealers

Jun 5, 2018 @ 2:07 pm

By Greg Iacurci

Allianz Life Insurance Co. of North America has forged a sales partnership with Vestwell designed to distribute the 401(k) robo-adviser's services through thousands of independent retirement-plan advisers.

Allianz, which offers insurance products to retail investors, is promoting Vestwell's services to the roughly 15,000 registered investment advisers affiliated with independent broker-dealers with whom Allianz does business.

"Advisers working with Allianz Life who are out there speaking with businesses needing a retirement plan, we can now offer a solution out to those financial advisers and their plan sponsors via the Allianz relationship," said Vestwell founder and CEO Aaron Schumm.

Vestwell is a digital platform for advisers working with defined-contribution plans like 401(k)s and 403(b)s, allowing them to offer services like fiduciary investment management, plan administration and record keeping to clients.

Founded in 2016, it is one of several tech start-ups trying to gain traction in the retirement-plan marketplace. Other new entrants include Betterment for Business, ForUsAll and Human Interest.

(More: It may be too early to write off robo start-ups)

This partnership follows on an investment that Allianz Life Ventures, the corporate venture-capital arm of the life insurance company, made in Vestwell earlier this year for an undisclosed sum. Mr. Schumm called it a "small minority investment."

Allianz also has invested in blooom, a direct-to-consumer robo-adviser that offers managed accounts to 401(k) participants, said Emily Reitan, vice president of strategy and business development for Allianz Life Insurance Co. of North America.

"This is the first investment where we feel like we can add value to our advisers directly [in the retirement-plan market] with this kind of sales partnership," Ms. Reitan said about Vestwell.

(More: Financial Engines to be purchased for $3.02 billion, combined with Edelman)

Robo-advisers providing automated investment management emerged roughly a decade ago in the wake of the financial crisis, leveraging technology to offer relatively inexpensive portfolios to consumers. Aite Group, a consulting firm, expects the number of robo-advice users to reach 17 million by 2021 — up from 1.8 million in 2016.

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