Vestwell gets more financing

Vestwell has raised $125 million in a Series D fundraising round led by Lightspeed Venture Partners.

The funding will also go toward expanding Vestwell’s work on state-savings-program initiatives while creating other savings programs for partners, employers, and savers using Vestwell and for financial institutions using their recordkeeping services as a white label product, the firm noted. Along with Lightspeed, funding came from Fin Capital, Primary Venture Partners, and FinTech Collective, as well as newcomers Blue Owl and HarbourVest, according to Vestwell.

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The one thing people have problem with the most

If there is one thing that over time, I’ve realized that people have a problem with the truth.

I probably knew it from a certain time, probably college, that even opinions based on truthful facts can be a dangerous thing for the people that can’t deal with it. The student government at Stony Brook couldn’t deal with it. The folks at my law school who thought everything was wonderful had issues with my truthful opinions that things weren’t so Rory. Same with some jobs and even the retirement plan industry, I remember when an industry spokesperson (since retired) had issues with any provider that criticized the retirement plan industry over the lack of transparency on fees.

We were told when we were young, that we should always speak the truth, yet it’s the truth we speak that can lead us to be ostracized. We can choose to go along with the flow, but the problem is that going with the flow only continues the problems and issues we fight against.

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We are shaped by our experiences

When I used to write the annual article that Paychex and ADP were lousy third-party administrators, I would get a nasty retort from people who worked there. It’s not personal, it’s business, and my experience with these payroll providers as TPAs hasn’t been very good. I remember an angry plan sponsor that used one of them and had received my article from another TPA, wanting to debate me on my article. I have no time for debates and my opinion is my opinion, based on 24 years of experience. A plan sponsor who thinks their payroll provider is doing a great job as a TPA has their own experience.

An advisor commented on my latest article that his experience with these payroll providers was excellent. I simply told him that my experiences weren’t the same. My opinions are shaped by my experiences and I assure you that if my experiences with these payroll providers improve, then my opinion will too.

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When markets sink, plan sponsors lose interest

When I worked for third-party administrators (TPAs), nothing hurt prospecting more than a down stock market. Common sense would dictate that this might be the best time to prospect plan sponsors, but plan sponsors shut off discussions when they see those retirement plan statements,

As a plan provider, I suggest discussions with plan sponsors who are horrified by stock market losses, that fiduciary concerns should make them, more interested in reviewing their plan than when everything in the market is going gangbusters.

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How A Plan Sponsor Can Reboot Their 401(k) Plan

My latest article for JDSupra.com can be found here.

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The Signs That Your 401(k) Plan Is In Good Shape

Our latest article for JDSupra.com can be found here.

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Carson adds another advisory firm to its network

The Carson Group is adding Oakeson Steiner Wealth & Retirement to its network of more than 140 registered investment advisory firms. Hastings, Nebraska-based Oakeson Steiner provides financial planning, overseeing a total of $1.2 billion in client assets. The firm was formerly part of Resources Investment Advisors, a network of advisory firms that OneDigital bought in 2020.

The deal furthers Omaha, Nebraska-based Carson Group’s push into retirement plan advisement, in addition to wealth management. In June, it acquired Northwest Capital Management Inc., an advisory in both spaces. Earlier in the year, Carson announced a partnership with small and midsize retirement plan provider Vestwell so its advisers could offer a defined contribution retirement offering to clients who run businesses.

Oakeson Steiner President and Wealth Adviser Josh Yost and 13 wealth advisers and client services employees will move over to Carson with its network of 9,000 financial professionals globally. Yost will remain sole owner of the firm and lead day-to-day operations. The firms did not disclose details of the deal.

The Carson Group currently manages $31 billion in assets and serves more than 48,000 families among its advisory network of 140+ partner offices.

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The Prop Up

The idea of the prop up, and my issues with it, probably started around the 5th grade at Rabbi Harry Halpern Day School. Dr. Rohn got on the loudspeaker and announced that starting that morning, we would get a new, special cookie with our daily milk break. Up until that point, we were getting a special Burry cookie. You would find them in the local supermarket, sometimes it was fudge, sometimes it was chocolate chip, it was great. So when Dr. Rohn was putting these new special cookies over, we all thought something magical would be given out. Oreos weren’t Kosher at the time, but Hydrox were. Whatever it was, we awaited. So the morning came, and the milk order was accompanied by Kedem tea biscuits. The tea biscuit that the local fruit store was selling 2 for $1. No matter how Dr. Rohn was propping it up, the biscuits were awful for the next 3 years. Anytime I see those Kedem biscuits at Costco or ShopRite, I get a good laugh. Dr. Rohn was a wonderful man, but terrible at the promotion.

One person who was good at promotion was my mother. My Aunt is only around 5 years older than me. My aunt was a very insecure girl, her parents were older Holocaust survivors, my dear grandparents. When my dear grandfather died, my Aunt was only 12. Rather than dealing with that trauma properly through professional help, my family spoiled my Aunt to the point that she received more reparations than her Holocaust-surviving parents ever did. I adored my Aunt, I always looked up to her and always cared about her. But she was weak, she had low self-esteem and she enabled the narcissism of her sisters. She graduated college, got a teaching job through connections set up by my parents, and lasted weeks as a first-grade teacher, never to fully teach again. That was 1990.

My Aunt got married in 1990 to the next prop up. While my college graduating Aunt never achieved that ambition that her MENSA level IQ suggested, her husband lasted a few weeks at the local community college. My mother did so much bragging about my Uncle, raving about what a businessman he was. He owned a hot dog stand at a Long Island mall and a dry cleaning store that had no dry cleaning equipment, someone else did the work. My uncle was a failure at everything he did: as a worker, as a general manager, as a real estate agent, but more importantly as a father and husband. Yet to this day, my mother still pushes him to the moon, even though she truly despises him, and is no longer related to him. Like Dr. Rohn and the tea biscuits, the promotion of my Uncle was a failure.

My sister, I was close with, until I wasn’t. It all started when she started dating a man who had zero personality skills and all he did, was sleep at our house on the weekends, every single weekend. My grandmother (who lived with us) and I despised him. Yet, my mother would rave about him, despite divulging his psychiatric medications and the fact he had spent 10 years doing nothing, except watching his twin nephew and niece for a time. Plus, my mother pointed out, he folded well. I think he once worked at the GAP. His parents were ecstatic that my sister married him, and they moved out of town pretty quickly, afterward At least he was a gym teacher for New York City, which had a pension. I understand now, that this guy, who never really liked to work, retired as a teacher in his early 50s, and is selling crap on eBay to make ends meet. Yet I’m sure my mother is still propping him up.

Around the time my sister was dating “Mr. Wonderful”, I was dating my wife. My wife was pretty, well-educated, and a lawyer. My sister was jealous of my wife and felt rather competitive with her like she did with me. I never felt I needed to compete with my sister, but the feeling for her wasn’t the same. So while my mother was propping up Mr. Wonderful, she said very little of my wife, to the point that her work friends didn’t even know my wife was a lawyer. My wife was wonderful and still is wonderful, but my mother made sure everyone thought otherwise of her. My wife was a threat because, unlike my Uncle and Brother in Law, my mother couldn’t control, or think she was in control (she is not).

My mother never propped me up and never said how wonderful I was. When I didn’t do well in high school because I didn’t try, I’d get thrown insults, that felt like punches to the face. With all my success, I don’t think people care I got a 75 in Sequential Math 4. But my mother probably still does, because she needed my success to validate her insecurities. It bothers her that she can’t brag about my current successes because it’s a repudiation of her narcissism, and people would realize how broken she is.

Psychological abuse is almost as bad as physical abuse. A little encouragement and kind words would have gone a long way, but for my mother, I was always the target. Always the punching bag. Always the one to go out and do errands. But it never mattered, I never got the prop up.

At work, over the years, I’d hear about bosses praising certain employees. I never got the praise. It was always someone else and it was always someone inferior. I’d hear wonderful things about one employee who was going to run the administration side of our third-party administration practice. He was going to be the next Golden Boy and he flopped so hard, that he was demoted quickly. There was the actuary that the boss got for $75,000 annually. The actuary was terrible at everything he did and his claim to fame was that he was caught sleeping on the job,

The older I get, the less I care about what others think. While I always vied for validation from my family that I never got, I finally realized the role of a pop-up. It’s to put over people who would fail on their own. You hardly need to put someone over, who is already over. You don’t need to tout someone who is a success, who is a success. Beware of what someone brags about or touts, because most of the time, it’s a pop-up. When you think you’re getting cookies, you might be getting tasteless biscuits.

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SDBA Account Balances are down

Schwab’s Q3 2023 SDBA Indicators Report, a report on self directed brokerage accounts (SDBAs) shows that average account balances finished at $287,769 for the third quarter of 2023, with an increase of 5.3% year-over-year but down 9.2% from $316,826 in Q2 2023.

Schwab found that equities remain the largest holding at 34.2%, followed by mutual funds (32.7%), ETFs (21.9%), and cash and fixed income (9.7%). Apple once again came in as the top equity holding (12.21%), followed by Tesla (8.79%), Amazon (4.57%), NVIDIA (4.53%), and Microsoft (3.57%). Other leading holdings included Berkshire Hathaway (2.21%), Alphabet (1.78%), Meta (1.48%), and Costco (0.89%).

Both Schwab and Vanguard were the top mutual fund holdings, with the Schwab S&P 500 Index coming in as the leading fund at 5.56%. This was followed by the Schwab Total Stock Market Index (2.53%), Vanguard 500 Index (2.32%), Vanguard Total Stock Index (2.10%), and the Schwab International Index (0.84%).

As for the top ETF holdings, Vanguard Total Stock Market came in at 5.32%, trailed by the SPDR S&P 500 ETF (4.40%), the Vanguard S&P 500 ETF (4.36%), and the Invesco QQQ Trust (4.01%).

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Keybank offers PEP

KeyBank Institutional Advisors (IA) announced the launch of a new pooled employer plan for 401(k) plans that will be effective January 1, 2024.

KeyBank IA will serve as the ERISA 3(38)-investment manager. Transamerica will serve as the recordkeeper, and Pentegra will be the pooled plan provider (PPP), providing administrative and compliance support.

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