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Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

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Re: Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

#21

Post by phunge »

phunge wrote: post #19
harryh wrote: post #12

Earlier quoted context omitted.

Jesus those fees are high. 50 basis points to just warehouse the money. Wealthfront charges half of that for some moderately sophisticated management. Plus even more on the employer side! Wow. And people say they are cheaper than other 401k providers? That's nuts. EDIT: OK, it appears ( https://captain401.com/investments ) that they will optionally do some automatic rebalancing for you so they're a bit more than just…

This is 100% true. Mainstream 401k fees are out of control. I don't know how much is opportunism and how much is regulatory burden, but parity to wealthfront or anything else retail would be fucking miraculous.

To put up something concrete, my last large employer had a 401k plan where the cheapest fund we had access to (PLFMX) had an expense ratio of 0.72%. That's in addition to account-level management fees, which I think were ~0.8%.

Re: Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

#22

Post by astrowilliam »

tyh wrote: post #15
astrowilliam wrote: post #13

I interviewed with these guys! I've spoken with one of the founders, Roger Lee, at length about their product and I have to say that they are amazing people with great vision. Even though I didn't get the gig, it's great to see them doing well! Good things happen to good people.

Roger is a real smart guy. I know because I went to summer camp with him years ago.

He's very smart, and a good dude. I'm happy to have had the opportunity to have him in my world for the brief time that we were talking. I could only imagine the camping shenanigans he got into!

Re: Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

#23

Post by toomuchtodo »

phunge wrote: post #19
harryh wrote: post #12

Earlier quoted context omitted.

Jesus those fees are high. 50 basis points to just warehouse the money. Wealthfront charges half of that for some moderately sophisticated management. Plus even more on the employer side! Wow. And people say they are cheaper than other 401k providers? That's nuts. EDIT: OK, it appears ( https://captain401.com/investments ) that they will optionally do some automatic rebalancing for you so they're a bit more than just…

This is 100% true. Mainstream 401k fees are out of control. I don't know how much is opportunism and how much is regulatory burden, but parity to wealthfront or anything else retail would be fucking miraculous.

It would be amazing if Congress eliminated 401ks, and brought over the employer contribution feature as well as the increased participant contribution limits to IRAs. The only reason asset managers get away with charging such outrageous fees is because you're a captive audience with your 401k.

Make them portable such that an IRA is and watch the fees fall.

Re: Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

#24

Post by toomuchtodo »

harryh wrote: post #14
greattypo wrote: post #2

This is awesome. I've experienced first hand the hassle of setting up a 401k for employees (and now appreciate why so many companies don't offer it until they're bigger). In my mind, it would be a strictly better world where all companies could offer this benefit.

I wish the law was rewritten so that this sort of savings benefit wasn't tied into your employer having to set it up. Get rid of 401ks and just raise the damn IRA limit.

I regret having only one upvote. This is the way the problem gets fixed.

Re: Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

#25

Post by harryh »

toomuchtodo wrote: post #24
harryh wrote: post #14

Earlier quoted context omitted.

I wish the law was rewritten so that this sort of savings benefit wasn't tied into your employer having to set it up. Get rid of 401ks and just raise the damn IRA limit.

I regret having only one upvote. This is the way the problem gets fixed.

Unfortunately I think the chances of this happening in the foreseeable future are quite slim. Alas.

Re: Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

#26

Post by kasey_junk »

harryh wrote: post #14
greattypo wrote: post #2

This is awesome. I've experienced first hand the hassle of setting up a 401k for employees (and now appreciate why so many companies don't offer it until they're bigger). In my mind, it would be a strictly better world where all companies could offer this benefit.

I wish the law was rewritten so that this sort of savings benefit wasn't tied into your employer having to set it up. Get rid of 401ks and just raise the damn IRA limit.

So much this

Re: Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

#27

Post by chauzer »

sguha wrote: post #6

https://captain401.com/pricing How do these financial services justify charging a percentage of the funds managed? Is there more work involved in handling an account with a larger balance?

another option is Betterment for Business https://www.bettermentforbusiness.com/for-plan-sponsors/
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