Products December 21, 2015

NextCapital Gains New Industry Funding

Software developer NextCapital Group finds new support for developing digital portfolio management and advice delivery tools, in the form of Series B financing worth $16 million. 
Reported by

NextCapital Group has won a sizable new capital investment led by AllianceBernstein (AB), Manulife and Route 66 Ventures.

NextCapital’s existing shareholders include Transamerica Ventures, Russell Investments, FinTech Collective, Kelvingrove, and Vermont Seed Capital Fund—all committed to development on automated portfolio management technologies.

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The firm is not shy about what it plans to do with the money—hoping as it does to “someday replace traditional target-date funds (TDF) with inexpensive managed accounts.” The goal of the venture investment is to “shake up the $700 billion TDF market and bring managed account advice to anyone with a defined contribution plan.” Most recently the firm brought to market an upgraded 401(k) digital advice platform to offer participants more personalization and simplicity.

In a 2014 interview with PLANADVISER, executives with NextCapital suggested their pending technologies would allow their asset management businesses to deliver personalized, professionally managed, institutional-caliber 401(k) portfolios “at about half the cost of traditional managed account arrangements.” According to NextCapital Group, these digital managed accounts will automatically collect individual investors’ demographic data to create and regularly rebalance highly customized portfolios that take the place of TDFs or traditional managed accounts on the DC plan’s investment menu.

“Large financial institutions will win the big shift to scalable personal advice,” John Patterson, Chief Executive Officer of NextCapital, said more recently. “This infusion of new capital will accelerate our partners’ entrance into the digital advice marketplace—both inside the 401(k) plan and out.”

Tim Ramza, chief innovation officer for Manulife and John Hancock Financial Services, explains the decision to invest with NextCapital this way: “NextCapital aligns with Manulife’s strategy of investing in innovative technologies that enable us to effectively meet a broader range of customer needs, and ensure that we are a leader of the financial services industry of the future.”

More information is available on the firm’s website, www.nextcapital.com.

Data & Research December 21, 2015

Retirement Plan Providers Offering More Mobile Transactions

Corporate Insight reports about how many providers offer mobile transactions capabilities and which types of transactions.
Reported by

Mobile transaction capabilities from retirement plan providers have gained much traction over the last few years, according to a new report from Corporate Insight.

Thirteen of the 19 firms covered by its Retirement Plan Monitor (68%) provide at least one transaction on a phone application, tablet app or optimized mobile website. Of these 13 firms, 69% feature a mobile site, 62% offer a phone app and 46% provide a tablet app that include at least one transaction capability.

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These statistics all represent significant increases from when Corporate Insight first analyzed the topic of mobile app transactions in the February 2014 Retirement Plan Monitor Report, when only five of the 17 total firms (29%) offered a transactional app including four phone apps and one tablet app.

Every firm covered in the report enables participants to adjust their contribution rates from at least one mobile platform—by far the most commonly offered mobile transaction. No other transaction is available on more than one mobile platform of at least half the firms. Half the firms provide a mobile fund exchange transaction, 33% offer an optimized future investment allocations change transaction and 25% provide an optimized rebalance account option.

NEXT: Easy access and help features

Retirement plan providers generally offer easy access to transactions upon login to a mobile platform. Seven firms (58%) provide a homepage or plan overview page quick link to at least one transaction, and two firms (17%) position the transaction directly on the homepage. Further, 58% percent of firms provide universal access to transactions through a static menu link, and 33% centrally house all mobile transactions within a unified section.

The firms provide an inconsistent selection of design and help features on the transaction interfaces. While all firms present relevant plan data on at least one transaction interface, such as current contribution rates or holdings details, only 42% supplement the data with charts or graphs.

Two-thirds of firms offer help options, such as detailed instructions, FAQs or balloon tips. Only 33% of firms provide progress meters, and 50% offer quick links to applicable educational content. Approximately 58% provide supplemental tools within the transaction process, usually in the form of a contribution calculator on the contribution rate change transaction interface.

Only one firm requires participants to enter their account password in order to submit a transaction from a mobile platform.

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