Pontera, a New York-based technology provider specializing in assisting financial advisors with the management of held-away retirement savings assets, has unveiled a significant expansion of its service offerings. This new functionality grants advisors enhanced visibility into their clients’ various retirement accounts, including 401(k)s, enabling them to provide tailored recommendations that align with overarching financial objectives. This strategic move, which Pontera characterizes as "non-discretionary retirement advice," complements its existing core offering of discretionary advice, empowering advisors to manage these external assets with explicit participant consent. The new tool is slated for a September launch, with a waitlist already available for advisors eager to gain access to Pontera’s suite of services, which also includes robust solutions for billing, reporting, and client account supervision.
The introduction of this non-discretionary option signifies a pivot in Pontera’s strategy, allowing for a more flexible approach to retirement savings management. Unlike its discretionary service, where advisors have direct control over investment decisions, this new feature will provide advisors with the ability to offer guided recommendations without direct access to client funds. Advisors utilizing the non-discretionary service will not possess the ability to withdraw funds, make contributions, or alter beneficiary designations. Instead, the platform will facilitate "guided workflows" for plan participants, empowering them to implement their advisor’s recommendations. This approach addresses a segment of the market where clients prefer to maintain direct involvement in their investment decisions while still benefiting from professional guidance.
This development arrives against a backdrop of increased industry focus on the complexities of managing held-away assets, a sector that holds trillions of dollars in retirement savings. The 401(k) market alone, as of the first quarter of 2024, encompassed over $7.7 trillion in assets, according to the Investment Company Institute, highlighting the sheer scale and importance of this financial ecosystem. Historically, advisors have faced significant hurdles in accessing and managing these assets, which are often held by large recordkeepers with proprietary systems. Pontera’s core mission has been to bridge this gap, providing a unified platform for advisors to oversee all client assets, both within and outside of employer-sponsored plans.
A Shifting Landscape of Retirement Advice
The expansion into non-discretionary advice is seen by some industry observers as a pragmatic response to the evolving demands of both advisors and their clients, as well as the persistent challenges in gaining full access to held-away accounts. CEO Yoav Zurel articulated this sentiment in a recent statement, emphasizing the firm’s commitment to supporting diverse client preferences. "Some want their advisor to implement every portfolio decision," Zurel explained. "Others want to stay directly involved while benefiting from professional guidance. Our job is to build the infrastructure that supports both." This dual-pronged approach acknowledges that a one-size-fits-all solution is insufficient in the nuanced world of financial planning.
The non-discretionary offering is designed to cater to a segment of advisors and their clients who prioritize a more collaborative approach. In this model, advisors leverage their expertise to analyze a client’s entire financial picture, including their 401(k)s, IRAs, and other investment accounts, and then present actionable recommendations. The client, armed with this guidance, can then choose to implement these suggestions themselves or utilize the platform’s guided workflows to ensure accurate execution. This empowers individuals to remain in the driver’s seat of their financial journey, with their advisor acting as a trusted navigator.
Navigating Industry Friction and Partnerships
Pontera’s journey has not been without its challenges, notably a public dispute with Fidelity Investments, one of the largest workplace retirement plan recordkeepers in the United States. In September 2023, Fidelity announced measures aimed at restricting credential-sharing systems, ostensibly to safeguard client information and assets. While Pontera was not explicitly named, the move was widely interpreted as a direct response to companies like Pontera that facilitate advisor access to held-away 401(k) accounts. This led to a heated exchange, with Pontera’s CEO, Yoav Zurel, penning a letter to Fidelity accusing the firm of hindering clients’ access to valuable financial advice for their external savings.
This past conflict has shaped the industry’s perception of the challenges inherent in integrating third-party advisory services with established recordkeeping platforms. Fidelity manages approximately $17.9 trillion in assets under administration, making any friction with such a dominant player a significant hurdle for any fintech company seeking to operate within the retirement space. The ongoing debate highlights a fundamental tension between the desire for consolidated, holistic financial advice and the security protocols and business models of large retirement plan administrators.
Despite these industry-wide challenges, Pontera has cultivated a network of strategic partnerships. The company collaborates with a range of Registered Investment Advisors (RIAs), including prominent firms like Steward Partners, and independent broker-dealers such as Stifel Financial. Furthermore, Pontera has established relationships with 401(k) recordkeepers, including Manulife John Hancock Retirement, indicating a growing acceptance of its platform within the broader retirement ecosystem. These partnerships are crucial for expanding the reach and utility of Pontera’s services, demonstrating its ability to navigate the complex landscape of institutional retirement plans.
A "White Flag" or a Strategic Evolution?
The introduction of the non-discretionary offering has elicited varied interpretations from industry experts. Zach Pardes, Head of Brand Communications for Pontera, firmly stated that the new service is a direct response to the expressed needs of advisors and their clients, rather than a reaction to past disputes. "It’s really a reflection of different strokes for different folks," Pardes commented. "Some firms prefer discretionary management, and some would rather work in a non-discretionary mode." This perspective frames the move as a natural evolution of Pontera’s service model, designed to offer greater choice and flexibility.
However, Andrew Besheer, Managing Principal of Besheer & Associates, offered a contrasting viewpoint, suggesting the move could be interpreted as a strategic concession. "It certainly feels to me like Pontera has finally accepted that it’s not going to win its battle with Fidelity over access to plan participant accounts," Besheer remarked. He elaborated, "The painful part is that Pontera would’ve told you for the past 7 to 8 years that this was the wrong model—that advisors should have full discretionary trading access directly into plan accounts and that access would allow them to manage a client’s plan/non-plan assets holistically."
Besheer acknowledged that the non-discretionary platform would still provide value to advisors but contended that it falls short of the initial vision of direct, discretionary management of held-away assets. He suggested that Pontera’s earlier dogmatism in pursuing direct access may have hindered its progress. "I think Yoav and his team came up with an outstanding idea for helping both advisors and retirement savers," Besheer added. "In some ways, it could’ve been the golden goose. That said, I think maybe they were too stubborn and unwilling to be pragmatic in their relationships with plan administrators/custodians and that dogmatism has done them no good service."
Fidelity Investments did not immediately respond to requests for comment regarding Pontera’s new non-discretionary offering.
The Future of Held-Away Asset Management
The long-term implications of Pontera’s strategic shift toward a more inclusive, non-discretionary model remain to be seen. However, it underscores a broader trend in the financial advisory industry: the increasing demand for integrated wealth management solutions that encompass all of a client’s assets. As retirement savings continue to grow and become more complex, the need for advisors to have a comprehensive view and the tools to act upon it becomes paramount.
Pontera’s commitment to fostering collaboration with recordkeepers is also a key factor. Pardes reiterated the firm’s readiness to work with Fidelity and other recordkeepers, whether through existing API technology or by developing custom integration solutions. "If a record keeper does not have that [API] available and would like us to build it, or we can work with a mutually agreed upon work frame, we’ll do that," he stated. "If a record keeper doesn’t want to offer it, that is their choice." This flexible approach signals Pontera’s intention to adapt to the varying technological infrastructures and partnership preferences of different institutional players.
The success of this new non-discretionary service will likely hinge on its ability to deliver tangible value to both advisors and their clients. For advisors, it offers a pathway to expand their services and deepen client relationships by providing holistic financial guidance. For clients, it presents an opportunity to receive more comprehensive and personalized advice for their retirement savings, regardless of where those assets are held, while maintaining a level of control that aligns with their comfort and financial literacy. As the retirement landscape continues to evolve, Pontera’s dual offering of discretionary and non-discretionary advice positions it as a key player in the ongoing effort to democratize access to sophisticated retirement planning for a wider range of American workers. The ability of platforms like Pontera to seamlessly integrate with the vast network of retirement plan providers will be a critical determinant of their long-term impact on the industry.
