New fintech startup Vestwell has launched an automated 401(k) and defined contribution platform that helps advisors stay compliant with the Department of Labor conflict of interest rule. Vestwell assumes 3(38) and 3(16) fiduciary responsibility, reducing the advisor’s legal liability.
The startup just received $4.5 million in seed round funding, led by FinTech Collective, a New York-based venture capital fund focused exclusively on financial services tech companies. FinTech Collective has funded such companies as Quovo, NextCapital, Artivest and Openfolio.
Other Vestwell investors included F-Prime Capital, Primary Venture Partners and Commerce Ventures.
“Vestwell’s mission is to provide advisors with a modern platform which reduces fees, increases transparency and ensures compliance in a quickly shifting regulatory landscape,” Aaron Schumm, founder and CEO of Vestwell, said in a statement.
Schumm co-founded FolioDynamix, a wealth management tech provider, which Actua bought in 2014.
The Vestwell platform provides investment services, trading, administration, custody, recordkeeping and trustee services.
“As fiduciary rules evolve, we see Vestwell not only protecting advisors but also providing them with the tools required to help their clients retire wealthier,” said Benjamin Malka, General Partner of F-Prime Capital.