401 Harmony Aspires to Provide the Retirement Planning for the Neglected

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

<10000 10k-20k 20k-30k 40k-50k 50k-60k 60k-70k 70k-80k 80k-90k 90k-100k 100k-200k >200k

401k Number of Participants by Individual Asset Size Source: EBRI

Traditional Personal Advisor who invests to acquire a customer gets his money back in

12 Yrs

Robo Advisory Service that invests to acquire a customer gets its money back in

6+ Yrs

401 Harmony that invests to acquire this customer will get its money in

1.8 Yrs

33 MM

9 MM

10 MM

Traditional Personal Advisor who invests to acquire a customer gets his money back in

0.7Yrs

Robo Advisory Service that invests to acquire a customer gets its money back in

1.4 Yrs

401 Harmony that invests to acquire this customer will get its money in

1.8 Yrs

Traditional Personal Advisor who invests to acquire a customer gets his money back in

4 Mth

Robo Advisory Service that invests to acquire a customer gets its money back in

1 Yrs

401 Harmony that invests to acquire this customer will get its money in

1.8 Yrs

Neither Personal Financial Advisor Nor newly formed Robo Advisors can serve the neglected based on their current business model

How do we do it?

• We provide software as a service tool for 401k investors. We do not manage their money

• Therefore, Employer can make decision to purchase the software tool for all of their employees (whether they pay it or charge back to the employees)

• We will undertake their obligation to educate 401k employees

• In return we charge a very small fee per month per employee for our service

How are we different?

Advisor Fee

Customization of Service

1%

0.5%

0.0%

Advantage Free

Disadvantage Identify need but no plan

Advantage Use Age as the only factor

Disadvantage Do not consider Risk, need, or contribution

Advantage Risk Based (may use age)

Disadvantage Do not consider need and contribution, High Fees

Advantage Use Age, Risk, and some may consider need

Disadvantage Too expensive for most 401k participants

Advantage Use Age, Risk, Need, and Contributions

Disadvantage Requires users to act on the advice

Advantage Looks at all needs like insurance, etc.

Disadvantage Most expensive

Personal Financial Advisor

Packaged Funds

Free Calculators

What is under the hood?

• We use an optimization program to come up with asset allocation for each individual

• Three factors decide individual’s asset allocation

– His return requirement based on this current salary, retirement year, salary

increase, longevity, and social security

– Historical Diversification of asset classes using probability of loss

– Individual’s own appetite to take risk

• We select funds on 7 attributes broadly in three categories

– Fund’s historical “fee adjusted returns against a benchmark”

– Fund’s historical risk taking

– Consistency of performance in both up and down markets

What is included in our service?

• 24*7 Access to our website with unlimited use, quarterly rebalancing

• Quarterly Webinars and Onboarding training to train employees to use material

• Access to customer service representative

9-5CST (M-F)

• Access to all future development in our product

Benefit of using 401 Harmony

• Personalized Retirement Advice

• Increase 401k participation -> secured Retirement

• Improve Returns through Rebalancing

• More money for Retirement

• Employee Retention and Recruiting

• Meet 401k obligations to educate employee

• May help in meeting Section 3 38 Compliance

• Could be Free - You can pass on the cost to employees account

How do employees sign up?

• Company provides us email list

• We create user accounts

• We invite users for online onboarding webinar

• Each Employees agrees to our TOFU (Terms of Use)

• Each employees finishes the session with his/her own plan

Demo

This is a story of John and Jane who are similar in all respects except they contribute differently in their plan

Both have similar risk profile

Both used to work for Oracle but now work for SunGard and both have same assets

John’s plan assets at Retirement will be smaller because he contributes lower amount

Both score same on risk profile, they take risks if they see return potential

John’s plan assets allocation is different from Jane’s in SunGard plan

But d because both are no longer contributing differently in Oracle plan, the allocation is same

Vanguard Wellesley Income Fund was selected in SunGard Plan for High Yield Category based on 7 different attributes including fees

Fidelity Contra Fund provides best score in large cap growth category in the Oracle Plan

John and Jane both get their own customized advice on rebalancing their SunGard Plan

Both John and Jane will get the same advice to rebalance their portfolio in Oracle Plan