January 2010 Archives

On January 19, BrightScope launched a new online tool, the Personal 401(k) Fee Report, which is available free on the company website. The new tool provides individual investors and financial advisors with personalized data about retirement plans, comparing current fees to other options.

BrightScope is a 401(k) plan-rating company that collects data on plans to help sponsors, advisors, and participants improve their 401(k) plans. By compiling 401(k) data into detailed presentations, the company makes complex retirement plans easier to understand. (Finovate 2009 video here.)

BrightScope has amassed data on about 30,000 individual 401(k) plans, so in many cases generating the Personal 401(k) Fee Report is as simple as entering the name of your company and answering a few questions about your contributions to the plan.

In an interesting addition to BrightScope's standard 401(k) ratings, the report compares the cost and retirement results of the selected 401(k) plan against a typical low-cost IRA and indicates if switching would be beneficial. This comparison feature provides a valuable tool for financial advisors seeking to generate business by showing clients how much they could save by rolling their 401(k) into an individual retirement account (see screenshot #1, below). The report also offers more detailed information, including a breakdown of fees and a list of funds associated with the 401(k) plan (see screenshot #2, below).

BrightScope makes its money providing tools that enable 401(k) plan sponsors to monitor plan performance and evaluate whether the plan they have is right for their employees. The company also markets tools to financial advisors. The Personal 401(k) Report serves up a new way to draw individual investors and financial advisors to the BrightScope site. According to website-usage estimates from Compete.com, BrightScope ended December with 27,000 unique visitors, down from 35,000 in September.

Compete.com Jan.2010, traffic data here

BrightScope could also potentially generate additional revenue by allowing users to link directly to accredited advisors from the report, charging the advisors a finder's fee for each lead.

How it works

BrightScope collects data on 401(k) plans and ranks them in peer groups, making it easy to quickly compare and evaluate plans. The company considers a number of factors, such as fees, quality of investments, and corporate matching programs, in order to assign a rank to each 401(k). The quantitative ranking system measures how quickly a plan gets its users to a successful retirement. The new report adds another tool to individual workers who need to know if they are contributing enough into their retirement plans and whether they are taking full advantage of matching benefits programs offered by their employers.

#1. The Report Indicates Potential Savings

#2. Detailed Information on 401(k) Plans

Six new community financial institutions have agreed to carry Kasasa branded products, joining the 13 banks and one credit union already supporting the program across 11 states. The new additions bring the number of states in which Kasasa products are available to 15.

Kasasa is the first nationally branded checking account supported by individual community banks and credit unions. The idea, created by bank marketing company BancVue, is simple: By combining together under a single brand, smaller banks can pool their marketing resources, creating a unified advertising strategy that can compete against the banking giants that dominate the industry. BancVue launched Kasasa in May 2009. (Finovate video here, Netbanker blog post here.)

Joining the Kasasa program are six financial institutions:

• The Farmers & Merchants State Bank in Archibold, OH, the third Kasasa bank in Indiana and the second in Ohio ($640 million in deposits)
• First Bank in Clewiston, FL, the second Kasasa bank in Florida ($220 million in deposits)
• InCommons Bank in Mexia, TX, the second Kasasa bank in Texas ($74 million in deposits)
• Murphy-Wall State Bank & Trust Company in Pinckneyville, IL, the fifth Kasasa bank in Illinois ($69 million in deposits)
• Aspire FCU in Clark, NJ, the first Kasasa financial institution in New Hampshire, New Jersey, New York, and Virginia (21,000 members)
• Double 11 Credit Union in Indianapolis, IN, the first Kasasa credit union in Indiana (5,000 members)

Adding new banks and credit unions is important to Kasasa because each new addition expands the service area covered by the program, strengthening the brand nationally and benefiting all the financial institutions participating in it.

Kasasa enables participating financial institutions to offer customers their choice of four products:

1. High-interest checking
2. Savings accounts
3. Reward account giving debit-card users iTunes downloads
4. Charitable program allowing users to allocate interest payments to established charities.

Of the six newcomers, only The Farmers & Merchants State Bank elected to offer all four of Kasasa's products.

Kasasa's four products

CashEdge, one of the largest established providers of online funds transfer services to financial institutions in the United States (including Bank of America, Citibank, Boeing Employee's Credit Union, and Wachovia), recently announced that a major new financial institution, FNBO Direct, went live with its new POPMoney service on January 18.

FNBO Direct, a division of First National Bank of Omaha, is the third bank to offer the POPmoney program. The first two banks, First Hawaiian Bank and PNC, launched the service in December 2009. (See our Nebtbanker blog post here.)

The addition of FNBO is a significant coup for CashEdge. First National Bank of Omaha is a subsidiary of First National of Nebraska, the largest privately owned banking company in the United States. First National of Nebraska has more than 6.6 million customers and about $20 billion in managed assets. Signing up a major new bank should nicely expand POPMoney's user base, adding visibility and credibility to the program.

First National Bank of Omaha has incorporated POPMoney into its FNBO Direct line of online banking products. The service is available on the FNBO Direct site under the Online BillPay Account link (see screenshot below).

In order to educate consumers in the new mobile payment technology, FNBO Direct presents a branded website describing the POPMoney process, as shown below. The POPMoney service also provides FNBO Direct with a revenue opportunity, allowing the bank to collect transaction fees from users. (See highlighted section below.)

FNBO Direct charges $2.00 for standard three-day delivery and $10.00 for express next-day transfer service. How bank customers react to these fees will depend on how they want to use the service. While the fees seem reasonable for emergencies or large purchases, they may deter customers from using POPMoney for smaller transactions.