Sectors

We have divided this universe of companies into eleven sectors. We created them by looking at the intersection of target customers - millennials, employees, boomers - and the particular problems solved - savings, planning, and advice through planners, agents, or institutions.

Savings For Millennials

Unfortunately, most millennials find themselves drowning in debt. College debt makes the headlines today. However, credit card and other personal debt also create significant drag.

A number of interesting companies have emerged to address the lack of savings. The ones that succeed will fuel retirement planning for this generation in later years.

Financial Planning For Millennials

A very small number of millennials have accumulated enough wealth to start the planning process. They may have saved the money through high-paying jobs, startup success, or inheritance from grandparents. A solid group of entrants work to create a native digital experience for delivering advice that will create financial stability over time.

Savings For Employees

Companies want a financially-stable workforce. To get there, employees need to save more. Startups have emerged that work to help employees learn to change spending habits, budget and save more.

Retirement Planning For Employees

Today, most savings occurs at the workplace through 401(k) and other defined contribution plans. Through automatic enrollment, participation has risen substantially over the past 10 years at most companies.

Truth be told, account balances still need to be much larger on average to truly create stable retirements for most Americans. A number of companies have emerged that attempt to encourage better retirement planning with The Employee Retirement Income Security Act, (ERISA) framework at the workplace.

Retirement Planning For Boomers

As boomers head into retirement, their comfort with technology has increased substantially in the last five years. A large group of companies have created digital-first platforms to provide advice, reallocate savings, and even purchase retirement products.

Customer Creation For Advisors

Almost all agents and advisors want more clients to serve. We could have called the new companies in the sector “lead generators.” However, the label would short-shrift their greater ambitions to create new clients. The next generation of startups in this category work to effectively connect educated consumers with well-matched advisors.

Planning Tools For Advisors

The industry delivered advanced planning simulation tools to advisors ten to fifteen years ago. These effectively brought institutional-strength capabilities like Monte Carlo simulations to individual investors. They typically served as the basis for plans later executed by agents or advisors.

Today, the next generation of tools use the same advanced algorithms, but integrates them from product manufacturer to actual trading platforms. They promise to deliver real time planning linked to actual portfolio activities.

D2C Annuities

Online term life providers have broken the paradigm that insurance is bought not sold. Many naysayers continue to argue that annuities will never be sold in a similar fashion. However, a number of companies have started to crack the D2C (Direct to Consumer) code starting with simple-to- explain, simple-to-purchase annuities offering good consumer value.

Product Selectors

The Internet drives transparency. In a sea of product choices and options, companies that organize, rate, and recommend products will only create more value for agents, advisors and consumers over the coming years. We see an influx of companies reinventing the UX (User Experience) and redefining the factors that drive purchase decisions.

Compliance/risk Managements

Today, institutions, agents, advisors, and customers confront a broader range of risks than ever before. These include interest rate fluctuations, market volatility, health issues, geopolitical turmoil, and now even cyber security. A number of companies are rapidly building platforms to provide better real time assessments of investment risk and integrate them with trading

platforms that can react in real time. Individuals increasingly can benefit from risk mitigation strategies previously available only to large institutions.

Institution Enablers

Finally, retirement plan providers, financial institutions and insurance carriers need assistance building hooks into the new emerging partners. They need better data to make underwriting and pricing decisions in real time. They also need systems that will reduce costs as margins continue to compress.

 

Summary

We hope that this list of over 100 companies grows to 200 and beyond. Millions of Americans need a more secure retirement. Solving this problem requires new approaches to a number of problems: increasing rates of savings, improving financial literacy, creating more options for accumulation, and providing better strategies for decumulating wealth in retirement.