NextCapital, a digital advice firm, and Pershing LLC, a BNY Mellon company, announced an agreement to enable scalable personal advice delivery for large financial institutions.
“Our collaboration with Pershing Advisor Solutions allows institutions to be up and running with digital advice faster, reduce custodial costs, and deliver a high-powered experience for investors.” said John Patterson, CEO of NextCapital, in the announcement.
Rob Foregger, co-founder of NextCapital, explains to PLANADVISER that defined contribution plans are the channel now for its digital advice platform, but the partnership allows large financial institutions and advisers to use its platform for rollover and retail direct advice.
“Our digital advice platform is a computer partnership changing how institutions scale advisers rather than replace them,” he adds. Foregger also says NextCapital’s solution is strategic in addressing the Department of Labor’s impending fiduciary rule requirements for providing personalized, non-conflicted advice.
Pershing will be the default retail custodian.NEXT: What NextCapital provides to investors
NextCapital provides institutions with an integrated platform for delivering automated personal financial advice to investors—including holistic portfolio tracking, planning, savings advice, and portfolio management.
- Custom user experience;
- Proprietary or third-party investment methodology;
- Self-service and adviser-assisted service models;
- Multi-channel, supporting 401(k), IRA, and retail brokerage accounts; and
- Integrations with 401(k) recordkeeping systems and now, Pershing Advisor Solutions.
According to Foregger, the platform is currently integrated with Schwab RT recordkeeping solution for defined benefit (DB) plans, and Sungard Relius and Sungard Omni, for DC plans. He provided a demo for PLANADVISER that shows when a participant logs in, he sees account information pulled from the recordkeeping system. The site shows a target savings as well as any gap.
However, users can add sources of savings to the system. For example, Foregger showed that if a user has an eTrade account and fills in his eTrade credentials, the system will be able to aggregate data immediately from that account. Users can also input more income such as from DB plans, and the system also counts expected Social Security income.
The digital advice platform manages and monitors portfolios in real time, provides investment and savings advice, and advice about retirement income solutions and Social Security start dates. Foregger showed it also completes forecasts for retirement income spend down. Any investment or savings advice can be automatically sent to retirement plan recordkeepers and changes automatically implemented.
With the partnership with Pershing, all these features are available for use with investors outside of retirement plans.
“Everyone should have access to a personalized retirement plan to be able to manage that plan and their portfolios on an ongoing basis,” Foregger concludes.