Today is a very exciting day for Vestwell. We announced our plans to purchase BNY Mellon’s Sumday® subsidiary (to be rebranded to Vestwell State Savings when the deal closes), which is a leading technology and service provider to states who offer public-sponsored savings programs. Our vision at Vestwell has been to become the engine to power all workplace savings and investing. Today’s news accelerates our progress in delivering on that vision.
On a personal level, as a father of two young children, I am always thinking about how best to help them and enrich their lives. They each had a 529 account established for higher education in the first year of their lives. Outside of my own personal taxable individual investing accounts, I also have an IRA (Individual Investment Account), HSA (Health Savings Account), and have been participating in each of my employer sponsored 401(k) programs throughout my career. From my first job out of undergrad at Northern Trust in Chicago, I was contributing as much as I could, even as I struggled to pay off high student loans.
The problem is, each of those accounts are with different providers on different platforms. It shouldn’t have to be that way.
Today, I have a much better 401(k) than I’ve ever had (eh-hm ... powered by Vestwell), and we’ve built our capabilities to expand beyond 401(k)s and 403(b)s, marching down the path to incorporate IRAs, 529 college savings, 529A ABLE, HSA, and Emergency Savings on a single platform, tied into payroll for tax-deferred or tax-exempt contributions, and intelligent asset location.
Sumday allows us to accelerate our vision to power all things workplace savings.
You may be wondering “What is Sumday?” Sumday enables states to provide 529 college savings, 529A ABLE, IRA, and other public-sponsored savings programs to the businesses, employees, and residents of States.
Public-sponsored savings programs aim to ensure that their residents can control their financial future and be less dependent on the government for support during one’s lifetime. The most impactful place to do that is through the workplace, investing directly from your paycheck. This is why Vestwell exists and why Sumday is such a great addition to the Vestwell ecosystem.
For us, linking up with BNY Mellon a few years back was a natural fit, given their expansive capabilities, relationships, and trusted brand combined with Vestwell’s modern, institutional-grade infrastructure, and workplace savings platform focus. BNY Mellon identified this early, and has been behind Vestwell as a strategic investor since 2019, leveraging the power of payroll led workplace savings initiatives to deepen relationships across their clients, including government entities.
BNY Mellon’s Sumday, jointly powered by Vestwell, was selected to be the provider for multiple states and their respective IRA programs this past year, including the “trail blazing” OregonSaves, currently with over 17,000 registered employers and 100,000 employees in the program.
Sumday had built a great team, platform and client base that is moving faster and faster through the right technology investments. Our collaboration has shown all the right signs of becoming the industry leader. So, we thought we’d take that to the next level, allowing both BNY Mellon and Vestwell to double down on our strengths, with Vestwell taking the reins on the technology front, leapfrogging down the road toward delivering on our mission, while working with BNY Mellon to accelerate their institutional growth and investment in Vestwell.
It is one of those unique moments, where the sum is truly greater than the parts. This transaction is a win-win for our clients, employees, and savers.
In addition to acquiring the Sumday business, we are also thrilled to be adding their team to the Vestwell family.
Personally, I’ve known Doug Magnolia, who has been leading Sumday, and soon-to-be President of Vestwell State Savings, since before Vestwell was officially formed. He was brought in by an early investor as a subject-matter expert to poke holes in the idea. He’s a proven leader with really deep industry knowledge and relationships. We have built a great relationship together over the last 5+ years, and I’m excited to have him and his team officially part of Vestwell. They are a talented and knowledgeable group that wants to help more Americans save. They will fit right in.
I’m evermore excited to see the vision take a more solidified form in fruition, putting all savings programs that can be provided through the workplace on a single platform!