It's not exactly common for a U.S. retirement industry executive to be asked to speak at the World Economic Forum's annual conference in Davos, Switzerland, but Aaron Schumm, Vestwell's founder and CEO, had just that opportunity earlier this month.
Schumm was invited to the conference as a tech innovator and savings industry evangelist, and as he recently told ThinkAdvisor, the welcome he received was surprisingly warm.
"The Davos conference was a cool experience," Schumm said. "We were asked to come and talk about the macro-impact that healthy savings activity can have on the overall global economy and the world, and I think we were able to make that case pretty well."
Schumm said he followed advice to "not go down the technical rabbit hole," given the relatively short timeframe he was allotted. So he didn't spend a lot of time talking about the nuances of the Employee Retirement Income Security Act or the endless minutiae of the U.S. tax code.
"It was a more aspirational, global discussion about how savings deficits create a real challenge for economies," Schumm explained. "It was gratifying to be able to make the case for our industry and the role we can plan in the U.S. and abroad, and the person who interviewed me was very generous with her feedback. People at the conference just ran with it, and they were building their own talking points about how savings programs can make a big difference in people's lives."
Schumm said the Davos presentation felt like a bit of a culmination of all the work the Vestwell leadership team and staff have been doing in recent years. According to Schumm, 2023 was an exciting year for the firm, one that saw Vestwell accomplish "a lot of what we set out to do," including the rollout of new state-based savings programs and the launch of retirement plan advisory support services in conjunction with the likes of Carson Group and others.
He said the firm is moving full steam ahead into 2024, and he expects continued progress across the firm's various business lines, especially when it comes to supporting more states with starting savings programs, helping more advisors work more efficiently with 401(k) plans, and developing the pooled employer plan marketplace.
State-Based Savings Are Growing
Schumm said one of the biggest milestones achieved in 2023 for Vestwell was winning the CalABLE program from Ascensus.
"That was a great win for us, as CalABLE is the biggest ABLE plan in the country," Schumm observed.
As with other ABLE programs Vestwell supports, CalABLE allows Californians and out-of-state residents the ability to save for disability-related expenses by putting money in tax-advantaged investments, while protecting their eligibility for means-tested public benefits programs. Schumm said such accounts are useful for families all across the income spectrum and should definitely be on wealth advisors' radar as a potential planning tool.
Schumm said the same momentum is occurring in the state-based savings programs not tied to disabilities or emergencies. In fact, as reported in December by the Pew Charitable Trusts, cumulative account assets across the seven fully active state programs have topped $1 billion.
"A billion dollars is obviously a great optical milestone to hit, but there is so much room still to grow," Schumm said. "They key is that people are seeing that these programs are real and the savings are already starting to have a big impact."
