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My cofounder (hn:roger_lee) and I started working on Captain401 because we both had bad experiences with 401k accounts. As an employer, he kept putting off sett
by psawaya 11y ago
My cofounder (hn:roger_lee) and I started working on Captain401 because we both had bad experiences with 401k accounts. As an employer, he kept putting off setting one up because of the time and cost involved. As an employee, I became frustrated by the archaic web interface my Fidelity plan had, and felt overwhelmed by the task of choosing investments.
Captain401 is designed to make both sides of the 401k experience as pleasant as possible. We offer paperless administration to employers and automatic ("robo") advising to employees. We hope a tool like this will bring retirement savings to startups that had previously considered themselves too small or too busy for a 401k.
We're especially interested in hearing from HNers who run their own business: have you set up a 401k plan for your employees?
- jsprogrammer 11y agoAs a user receiving advice from your robo advisors, what guarantees do you provide that the advice I receive is sound and that following the advice will result in my retirement goals being met?
- roger_lee 11y agoOur advice is based off decades of Nobel Prize-winning academic research on best practices for long-term investing.. And as an SEC registered investment advisor, we serve as a fiduciary to the 401k plan and avoid all conflicts of interest. Unfortunately, the same can't be said about how the 401k industry operates today: http://abcnews.go.com/Business/401k-conflicts-hurt-nest-egg/story?id=28199396&singlePage=true http://abcnews.go.com/Business/401k-conflicts-hurt-nest-egg/...
- boomshucka 11y agoNobel prize winning academic research is awful in the finance space. It's based on flawed assumptions and it's results are completely useless. Either a) the person claiming this is aware and effectively lying, or b) don't know this and aren't competent.
- icu 11y agoI agree, most of the time... perhaps start with an understanding of how models break by reading "Black Swan" and "The Misbehaviour of Markets".
- icu 11y agoHi, if you are serious about this project I humbly suggest looking at life time cash flow modelling and stochastic modelling.
- jeffwass 11y agoHi Roger, some not so easy questions if I may? What does this mean, that the robo advisor is based off of decades of Nobel Prize winning research? Eg - Long Term Capital Management had Nobel Prize winning Laureates guiding its investment strategy and it went bust in the late 90's as its models broke down due to market conditions outside the realm of its models. Also - how does your fiduciary duty obligation jive with your robo advisor, which I assume is an automated process? Are you manually checking each bit of advice it suggests as part of due diligence requirements? And what happens if it has bugs? Eg, if I'm a risk averse investor but your robo advisor had some buggy code and recommends I put 90% of my portfolio into emerging market equities, and I follow this erroneous advice and lose most of my investment, what recourse do I have against your company? Do you guarantee lost capital due to clearly wrong advice, or do I have to take you to court? Just curious how you are planning to deal with this type of situation, because at some point it's likely to happen (but maybe not as obvious as this example). Also your link appears to be more of an opinion piece than purely factual statement on 401k advisors.
- therobot24 11y agoQuick question: How long do you see yourselves operating Captain401? The photos on the website make you guys look pretty young and if I were an employer I'd be nervous that --like many start-ups-- one day out of the blue I'd get an email saying Captain401 is closing. Not that youth means the start-up is doomed, just that you may want to move on to try something else. I'm sure your plans can roll over easy enough, but that just means I'll have to deal with Fidelity/Vanguard/etc anyway.
- bosco 11y agoI have to agree. Why showing the team works for a lot of startups, I don't think it works that well in fintech when dealing with other people's money. Especially when founders look young/list 0 financial experience.
- roger_lee 11y agoThat's a good question, and we want to make it clear that we don't touch any of the employee's money -- all investments are held in an SIPC-insured secure trust account by one of the nation's largest third party custodians that deals with billions of dollars. And no matter what happens to us as a company, our customers will be able to continue to use the 401k plans we've set up for them. That said, we do think youth has its advantages, esp. in a stodgy industry like finance -- some of most exciting fintech companies were started by young founders (ex. Stripe, Betterment, etc.). The last startup I co-founded, I was at for 7 years. I plan to be at this one for 10+.
- whisk3rs 11y agoCan you share screenshots of what the administration UI looks like?