FeeX is moving away from its roots of providing insights on advisory, investment and expense ratio fees, as it undergoes a name and business change following an $80 million capital raise. The firm will now be called Pontera and will recenter its efforts around helping advisors manage their clients’ retirement accounts and other held away assets, according to an announcement. Pontera received investments from Lightspeed Venture Partners, which led funding efforts, alongside The Founders Kitchen, Hanaco Ventures, Hyperwise Ventures and Blumberg Capital.
The remodeling of the firm formerly known as FeeX comes as advisors are seeking compliance-friendly, secure tools for managing held away assets in 401(k)s, 403(b)s and HSAs, said Pontera co-founder and CEO Yoav Zurel.
The fresh capital is slated for use improving the advisor and client user experience, bolstering integrations and supporting better reporting. To accomplish those goals, the firm is adding approximately 150 new employees, roughly half of which are technologists, with the remainder in client-facing and advisor-education roles. Pontera currently has more than 100 employees.
The change of focus for Pontera is not about straddling two different service offerings, Zurel said. Its fee comparison services will receive maintenance—but will no longer be an engine for growth.
Fee comparison tools offered to clients via existing B2B2C partnerships, such as its offering with TD Ameritrade, will continue to see support. The firm is not selling those services to new clients, however, said Zurel. The firm's direct-to-consumer fee comparison tool was discontinued in 2020.
Pontera’s pivot has its roots in regulatory changes dating back to 2016, he explained. When the Department of Labor’s fiduciary rule was first introduced during the Obama era, Pontera saw a spike in interest. That uptick dissolved when the rule was ultimately vacated.
Nevertheless, the momentum generated by the rule planted the seeds for Pontera’s new focus, said Zurel, who said advisor interest in the tool was “unexpected” at first.
“We think this is a much better product and more helpful to the end customer [than the fee comparison tool],” he said. “People like the education we provided, but really wanted active help.”
Advisors trying to help their clients with held away assets struggle with maintaining a secure environment and subject themselves to risky SEC audits, Zurel warned. Some will manually collect client statements and provide rebalancing instructions via email; others use videoconferencing tools to walk their clients through changes to their portfolio.
Even though they’re subjecting themselves to additional scrutiny, advisors are providing tangible returns for clients, said Zurel, citing several studies that point to a 3-4% range of boosted returns when clients work with advisors. Pontera wants to provide a secure, compliant solution for advisors providing services on held away assets.
Advisors at Carson Group, SageView Advisory Group, Priority Financial Group, Dynamic Advisor Solutions and CoastalOne already have access to Pontera’s tools for managing held away assets. Pontera also has integrations with Orion and Advyzon that it added last year.
"401(k) accounts have become a key component of the overall financial picture for many of the more than 40,000 families we serve,” said Ron Carson, founder and CEO of Carson Group, in a statement. “Our ability to securely and purposefully manage these assets through Pontera has been a game changer for our clients and our advisors who serve them."
Pontera gives advisors the flexibility of providing "fiduciary advice," without moving assets outside of a client's 401(k), explained Erin Wood, a CFP and the senior vice president of financial planning and advanced solutions at Carson Group. "Many clients are still working and don’t have the ability to move assets, or the fees inside the 401(k) may be lower than the fees the client would pay outside of the plan," she added.
Zurel said “thousands” of advisors are now using Pontera, which has seen its revenue increase threefold every year since 2019. He declined to provide more specifics about the number of advisors using the service and cited the $80 million in new investments as evidence of financial strength at the startup.
“Our focus is to help people retire,” he said. “We are very proud of what we accomplished under the FeeX brand and wanted our new name to focus on the tremendous opportunity for advisors to help their clients realize a better retirement. As Pontera, we aspire to be the bridge to a better retirement for millions of Americans.”