Blooom, an online investment adviser focused on 401(k) and 403(b) retirement plans, doubled its assets over the last six months to hit $2 billion under management.
The retirement robo-adviser reached the $1 billion milestone a year faster than
Betterment or
Wealthfront, proving that people need help managing their retirement accounts, said Chris Costello, Blooom CEO and co-founder.
"Americans have over $7 trillion invested in 401ks," he said in a statement. "If you ask people how important their 401(k) is to their retirement, they'll tell you it is the single most valuable asset they have. But if you ask them if they like to manage their 401(k), they'll say they'd rather do just about anything else."
Blooom connects with a person's workplace retirement account and analyzes the investments to determine if it can reduce fees and improve the portfolio's alignment with retirement goals. The initial analysis is free, and for a $10 monthly fee, the robo platform will manage the account by picking optimal funds and executing trades.
(More:
More funding for robo-advisers doesn't quell skeptics)
An analysis of the firm's 16,000 accounts, which have a median balance of $47,000, found that 79% of 401(k)s were incurring hidden investment fees, and 39% were invested in target-date funds with an average fee that's 45% higher than alternative investments. More than half of 401(k) plans weren't properly aligned with the investor's goals.
"The more people take advantage of our free look inside their 401(k), the more they're surprised by the potential impact from unbiased, simple, online professional help," Mr. Costello said. "We've seen 47% of people participate in our free analysis convert into clients, which shows Americans are taking their retirement strategy to the next level."
