Tegra118 acquires retirement planning fintech RetireUp

Tegra118 has closed its acquisition of fintech RetireUp in a strategic move to enter the insurance segment while also addressing challenges advisers face with retirement planning, the company announced Wednesday. 

In light of the coronavirus pandemic, record high unemployment rates and roughly 10,000 baby boomers retiring daily, there is a “big need” for retirement income annuities, Tegra118 Chief Executive Officer Cheryl Nash said. Additionally, RetireUp’s platform works in the insurance segment, which Tegra118 had not yet entered. 

With these goals in mind, acquiring RetireUp before moving on to other acquisitions was top of mind, Nash said.

Terms of the deal were not disclosed.

Libertyville, Ill.-based RetireUp is a tech-based retirement planning platform that leverages illustrations like charts and graphs to simplify financial concepts so clients can be more active participants during the financial planning process. The 14-person RetireUp team, founded in 2012, will join Tegra118 as part of the transaction. 

“There’s been a gold rush into the retirement space,” Michael Roth, formerly RetireUp’s president and now, vice president of retirement at Tegra118 said. “There’s demand for lifetime income products because these baby boomers are wanting guaranteed income, but there’s political forces with the SECURE Act and commission compression going on in the accumulation side … it’s the most complicated issue at hand right now.” 

Moving forward, Tegra118 is looking out for other potential fintech acquisitions during the next six to 12 months with an eye on front office capabilities like automation efficiency and artificial intelligence.

“Those capabilities are really critical for us right now,” Nash said.  

Tegra118’s first acquisition announcement comes just 100 days after private-equity firm Motive Partners  closed its acquisition of a majority interest in Fiserv’s investment business and relaunched it as an independent company. Today, Tegra118 has 5,000 advisers on its platform and 6.5 million client portfolios.

DREAM FORWARD

The deal also comes on the heels of a similar acquisition of a retirement planning fintech. Expand Financial, a Denver, Colo.-based retirement industry consultant, announced Thursday the closing of its acquisition of Dream Forward’s 401(k) business.

Dream Forward’s technology is designed to simplify the administrative process for plan sponsors, in order to make 401(k) plans more accessible to small businesses, the company noted in a press release. 

“The retirement industry was already in the midst of a wave of acquisitions before the recent economic turbulence,” Dream Forward Co-Founder Ryan Kahn said in a statement. “New market conditions — along with recent regulatory changes brought about by the SECURE and CARES Act — will only accelerate 401(k) industry consolidation. We expect to see more 401(k)-related acquisitions — both mega-deals between large national players and smaller deals between regional players.”