Ep #2: Building the Digital Recordkeeping Platform of the Future with Vestwell's Aaron Schumm

Aaron Schumm is Founder and CEO of Vestwell, a digital retirement platform transforming the way plans are offered and administered.

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9/7/2020 - 78 minutes


Episode Summary

My guest today is Aaron Schumm who is Founder and CEO of Vestwell, a digital recordkeeping platform that leverages modern technologies to bring a low cost, easy-to-use retirement platform to the large and underserved small and medium-size plan market. Aaron has over 15 years of experience in FinTech, financial services and wealth management for companies like Northern Trust, Citigroup and Fiserv. In 2014, he sold FolioDynamix which was a company he cofounded that provided technology to help wealth management advisors create and manage model portfolios. He founded Vestwell in 2016 to modernise the way 401k plans are offered, partly in response to the challenges he faced when trying to setup and manage a 401k for his employees at FolioDynamix. Vestwell has attracted significant amounts of capital, primarily from the financial services industry, raising over $30 million from companies like Goldman Sachs, F-Prime, Point72 Ventures, Nationwide, Allianz, BNY Mellon, and Franklin Templeton.


On today’s episode, Aaron and I talk about how technology is reshaping the recordkeeping industry. We discuss how most recordkeeping platforms are built on top of legacy technology systems that in many cases are 30-40 years old which limits flexibility and access to data, creates errors and inefficiencies, and drives up costs. How Vestwell leverages modern technologies to avoid many of these issues by automating processes like payroll integration, loan processing, notice delivery, and identifying errors in real-time, especially when integrating payroll data. We discuss how and why Vestwell, after originally building a modern interface on top of a large, legacy recordkeeping system, launched Vestwell 2.0 in January 2020 which replaced this legacy system and built their own recordkeeping system from the ground up. We also talk about cybersecurity and what steps Vestwell takes to protect data. And be sure to listen to the end where Aaron shares his thoughts on where the retirement industry headed over the next 5-10 years and the role of technology as well as his single best piece of advice for making ERISA fiduciaries smarter. 


What You'll Learn

  • How technology is reshaping the recordkeeping industry. 
  • Why Vestwell launched Vestwell 2.0.
  • How to set up a safe and efficient environment for recordkeeping.
  • Why Vestwell is succeeding in an area where many have failed before. 
  • The importance of cyber security. 
  • Where the retirement industry is headed.
  • How to make ERISA Fiduciaries smarter. 


Links to Resources


Ideas Worth Sharing

  1. “What we wanted to do was create a platform that removed the friction across the retirement space.” - Aaron Schumm
  2. “This is not a one-size-fits-all industry.” - Aaron Schumm
  3. “I would argue that the greatest risk for companies is not breaching their fiduciary duties—it’s operational failures that go unnoticed.” - Josh Itzoe