Pontera: $60 Million Closed To Enable 401(k) Participants To Receive Wealth Management Services

By Amit Chowdhry ● Dec 20, 2023

Pontera – a fintech company enabling 401(k) participants to receive comprehensive wealth management services by personal financial advisors – recently announced it secured $60 million in a funding round led by ICONIQ Growth. This funding round raises Pontera’s total funding to $160 million, reinforcing its commitment to address the widespread neglect of workplace retirement accounts held by 85 million Americans—a critical element of the U.S. retirement crisis.

After more than quadrupling revenue since its last fundraise announced in February 2022, Pontera welcomed ICONIQ Growth as a new investor in an up round with additional participation from previous investors Blumberg Capital, Collaborative Fund, Hanaco Ventures, Lightspeed Venture Partners and The Founders Kitchen.

Thousands of financial advisors are now utilizing Pontera’s platform to overcome operational hurdles to securely and compliantly manage 401(k), 403(b) and other retirement plan assets as a critical part of their clients’ wealth. And studies have consistently shown that the majority of 401(k) plan participants desire more comprehensive assistance with retirement planning, and that a professionally-managed portfolio can generate up to 4% additional annual net returns. But as over one third of workers seek professional help, financial advisors have historically struggled to manage the entirety of clients’ retirement assets.

The operational challenges started with the workplace retirement account’s location. As plans are selected by employers, it is often the case that a financial advisor has no affiliation with the financial institution holding their client’s 401(k). To manage these outside assets, financial advisors have logged into accounts using their client’s credentials for years, a practice that requires substantial investments in cybersecurity and compliance. Alternatively, advisors provided rebalancing guidance to clients, assuming the risks of lacking full plan information and implementation oversight.

Pontera alleviates these challenges through a client-permissioned platform, which empowers advisors to analyze, rebalance and monitor 401(k), 403(b) and other held-away accounts across hundreds of financial institutions in a single, unified view. And the platform is SOC 2 Type II and ISO 27001 certified and integrates with leading portfolio management software to provide clients with a 360° view of their finances. The clients benefit from enhanced transparency, peace of mind and retirement outcomes.

As the future of social security is uncertain, the U.S. government is working on expanding and preserving the 401(k), as indicated by the SECURE 2.0 Act and the proposed Retirement Security Rule. And the latter targets $779 billion lost by plan participants during inadequate account rollovers. Earlier this year, Pontera evidenced a solution helps advisors and their clients keep assets in 401(k) plans and minimize suboptimal rollovers.

Pontera’s collaboration with Dynasty represents a major achievement in the company’s journey since the last funding round; other notable new relationships include Benjamin Edwards, OneDigital, Savant and Wealthspire. And in that time, Pontera also launched new platform integrations with wealth management platforms Addepar, Envestnet and Morningstar.

KEY QUOTES:

“We are proud to support the Pontera team as they empower advisors to help their clients feel more financially secure and retire with greater wealth. Pontera is addressing a growing market need with a solution that benefits the entire retirement ecosystem through a proven approach for financial advisors to compliantly and more effectively manage workplace retirement assets.”

  • Yoonkee Sull, General Partner at ICONIQ Growth

“It’s one of those rare moments in time where if you implement a new capability everyone wins, from the client to the advisor.”

  • Shirl Penney, President and CEO of Dynasty Financial Partners – a leading provider of wealth management and technology platforms to over 300 financial advisors; Penney recently announced that Dynasty is on track to oversee $100 billion in client assets by July 2024.

“This funding is not just an investment in Pontera; it’s an investment in the future of every U.S. worker striving for a secure and fulfilling retirement. We are proud to partner with investors who recognize the nation’s looming retirement crisis and Pontera’s role in helping everyday families.”

  • Yoav Zurel, CEO of Pontera