A large number of investors are underserved

We believe a large number of investors are underserved by the investment industry.

Extremely wealthy investors have always had good options
Technology has vastly improved access to investing for those with less wealth
Those in the middle are being confronted with a wide array of challenges that undermines their ability to adequately save for retirement

The shift from pension plans to defined contribution plans like 401(k)s has created several challenges:

On average, employers make much smaller contributions to 401(k) plans leaving far greater burden on the employee to save more
Individuals do not have the same access to professional investment management that they do through pension plans
Individuals are subject to higher fees and more layers of fees than pension plans
Individuals must confront significant complexity and overwhelming choice with fewer resources

"Our research has shown that the typical working American is on track to replace just 56 percent of his income in retirement and that only one in five Americans retire with any retirement income plan."

Glenn Rifkin, "Financial advice for the mass affluent", The New York Times, April 6, 2006

“Too much choice, concluded Sheena Iyengar of Columbia University and Mark Lepper of Stanford, is demotivating.”

"You choose," The Economist, December 18, 2010

“What the real issue here is that employers simply aren’t willing to do that [spend real money], that they are moving away from systems for providing employee retirement security that actually can do that, which cost between 8% and 10% of payroll - there’s just no getting around it - to systems in the private sector which cost between zero and 3% of payroll. And those systems don’t provide retirement security.”

P&I roundtable, Which is better: defined benefit plans or defined contribution plans, March 12, 2007

Areté's Take:

Most investors will need to plan on contributing more to retirement and to taking a more active part in the planning process
Investment service firms will need to adapt so as to efficiently leverage their expertise into client benefits
There is a huge opportunity for investment firms to offer a "fair" value