J.P. Morgan partners with Vestwell to expand 401(k) business

Another large financial institution is working with Vestwell to grow its workplace retirement business.

J.P. Morgan announced Thursday that it selected the New York City-based fintech company as a new record-keeping option and to help power Everyday 401(k), Chase’s workplace savings program for small businesses.

Vestwell is a digital record keeper that lets financial advisors create retirement, education and health care savings programs for small business-owning clients, as well as manage those assets rather than offloading them to another firm. The company says it serves 30,000 small businesses, 1 millions savers and $27 billion in assets.

Vestwell will act as the private-labeled record-keeping solution for Everyday 401(k), allowing J.P. Morgan to provide fiduciary 3(16) administrative service, plan access to an assigned client success manager, a structured third-party administrator offering and enhanced payroll integrations, a J.P. Morgan spokesperson said in an email.

The firm also has a mid-market offering called Retirement Link and works with SS&C in the micro-market.

Wealth management firms increasingly see workplace savings accounts as a path to asset growth, especially with several states mandating that small businesses offer employees a retirement plan.

“In light of recent regulatory tailwinds and our modern technology solutions, we’ve experienced unprecedented demand from financial advisors for the ability to offer retirement plans to their clients,” Aaron Schumm, founder and CEO of Vestwell, said in a statement. “These new partnerships and integrations signal the rapid growth across the savings industries with strategic interest from the world’s leading advisory and asset management firms.”

Vestwell has similar partnerships with Carson Group, RBC Custody & Clearing and Morgan Stanley. Vestwell also powers retirement savings programs offered by the states of Oregon, Maryland and Connecticut, and recently won a bid to administer the auto-IRA programs in Colorado and New Mexico.

The retirement industry is experiencing unprecedented growth, with small businesses seeing affordable and digital retirement plans in record numbers, said Steve Rubino, head of retirement at J.P. Morgan Asset Management. Partnering with a company like Vestwell will help meet that demand.

InvestmentNews reached out to J.P. Morgan to ask how their product will differentiate from those of competitors also using Vestwell to offer retirement plans to small business. The firm declined to comment on the record.

Vestwell announced a partnership with Envestnet in 2020 to deliver a “turnkey retirement plan solution” to advisors. However, Envestnet recently announced a new partnership with Empower, a retirement plan service provider with $1 trillion in assets, to distribute retirement plans to advisors.

“Envestnet currently serves as an option to be an investment adviser for Vestwell and provides them with plan-level fiduciary services,” Sean Murray, head of retirement for Envestnet, said in an emailed statement. “Our new partnership with Empower represents a deep and holistic integration, which includes a managed account solution offering.”

In addition to working with J.P. Morgan, Vestwell announced two new distribution partnerships with Commonwealth Financial Network and Cambridge.

Vestwell also expanded integrations with payroll providers Gusto and Intuit Quickbooks.  

Related Topics: J.P. Morgan, J.P. Morgan Asset Management, Vestwell