Sandy startup raises $12 million
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401go, a Sandy-based startup aiming to facilitate financial advisers setting up retirement programs, raised $12 million in Series A funding, it told Axios Pro's Lucinda Shen exclusively.
Why it matters: A raft of new legislation addressing the U.S. retirement crisis could fuel a boom in small to mid-size businesses seeking 401(k) and IRA options.
How it works: Setting up a 401(k) can be onerous and typically involves multiple vendors, including third-party administrators, recordkeepers and custodians.
- CEO Dan Beck says 401go's software acts as both administrator and recordkeeper — cutting down on the fees advisers have to pay.
- The software automates billing and acts as a portal to help businesses pick retirement plans.
- By consolidating the setup process, Beck says 401go can get a plan up and running in 15 to 20 minutes, rather than in weeks. That makes it more enticing for advisers to take to clients.
Zoom out: Historically, smaller companies have been less likely to offer retirement benefits due to the cost.
What's next: There's hope recent regulatory changes will shift the needle.
The big picture: As of March, 14 states require, or plan to require, employers of a certain size to register for a state-sponsored retirement plan or offer their own.
- Utah has considered state-mandated retirement plan legislation, per ADP.
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