Russ:  Hi I’m Russ Capper and this is BusinessMakers USA brought to you by Insperity, inspiring business performance.  Today we’re in Kansas City, Missouri where my guest is Randy AufDerHeide, Co-founder of Blooom; Randy welcome to the show.

Randy:  Thank you sir, appreciate it.

Russ:  So tell us about Blooom.

Randy:  Blooom is an online financial advisor for anyone that has an employee sponsored retirement savings account like a 401K, a 403B, TSP, 529; those kinds of plans.

Russ:  Okay, real interesting.  So I don’t know that I’ve ever heard of a financial advisor that targets that sector.  Is it unusual?

Randy:  It is unusual, that’s why we think we stand out from everybody else.  There’s a lot of online IRA – Roth IRA options out there that are really great and we wanted to go in a different direction with that.  We wanted to be able to help people with the 401K because the majority of Americans that is their largest asset that they have.

Russ:  Oh yeah, and it sort of seems like it’s an asset that you think a little bit when you’re signing up in the beginning and make some sort of broad category decision and then never think about it again.

Randy:  Yes, the time where you all go and sit in an auditorium and they come and they bring pizza and they go through the whole spiel and most people are kind of just looking glazed-eyed – that’s one of the most important times that you need to be getting some help and it often just goes into the default option and that could be really good and that could be bad.  But usually a lot of times that is where the focus starts and ends is at a meeting like that.

Russ:  I can kind of relate to that.  There was a period a while ago where I was part of a big company that bought us and we sort of had that and that’s what I did.  But you’re telling me that that can be a mistake just like making any commitment in the financial world these days and not checking on it.

Randy:  Right.  You can easily default into a money market fund.  So you’re putting money in your account and let’s say 5 years go by and you go check it and it looks just like it did when started plus the money you put in, that’s because you’re not invested in anything.  And so you’re literally at the same spot you were at before where when you’re younger you’re going to be a lot more aggressive and as we get closer to retirement you’re less aggressive.  And that’s usually what a target date fund goes after, which is we always say is the second best option to Blooom, but getting that right the first time, or even just making sure you get it right at some point, is something that’s going to help you for the rest of your life.

Russ:  So let’s say I have a 401K and I hire you guys to take care of it, how much is it going to cost me?

Randy:  It’s $10.00 a month, per account.  So if you have an old 401K we can take a look at it and see if it makes sense for you to roll it into your new 401K so you would maybe only have one account.  Or if it’s a really good 401K platform or the company is big and has some really good offerings we might suggest that you stay there.  But we do offer a discount, $7.50 per month for additional account accounts.

Russ:  So if I had one what would I have been paying most likely all along before I found you guys?

Randy:  Well you probably wouldn’t be paying a whole lot in terms of investment advice and that but what you’re probably paying and you don’t know is fees.  One of the big things that we always talk about is hidden fees.  So there are fees inside a lot of the mutual funds, inside the target date funds, and people don’t realize it because they never see that line item, never.  So we try to show them all these things that aren’t necessarily displayed on the front page when you login to your 401K plan.

Russ:  Okay, so I would guess most of your business is maybe from people that already have a 401K and say maybe you ought to look at it and you show them what they’ve been paying?  Is that right or do you get a lot of people that their first 401K in their life is signed up with Blooom?

Randy:  If someone comes in they have to have a 401K already.  They may have just signed up at their work 3 days before, but you have to have a 401K or another employee sponsored plan.  If you’re coming to our website for the first time we have the market insight where we talk about the things we do and what’s going to happen and what a lot of the mistakes are that people make and how we can help you.  What we found is one of the ways that we can prove to people that we can start by saving them money is by having them analyze their account.

And so they’ll enter their information for their institution and we’ll analyze the account – the funds that are in there, the funds that are invested in, the other options that are available – and then we will look at the diversity and the fees and the stock to bond ratio and a number of other spots and we will tell them how much we think we can save.  And some of them we know exactly what it would be but on some we estimate.  What we’ve found is when you’re in a financial industry a lot of people just assume that you’re a bad guy for some reason.  We’ve found that in advertising people are just so quick to make that decision and we really are there to help them.  Even if you don’t want to sign up for Blooom we’ll still send emails and remind you to rebalance your account and if you don’t want to get help from us at least get it somewhere.

Russ:  You guys are proactive with your customers, is that right?

Randy:  Yes.

Russ:  In more than just rebalancing?

Randy:  We have a glide path that we work from and so as you get closer to retirement we will adjust that, but still throughout the year we will do some rebalancing and then every year you’re closer to retirement it will change just a little bit.

Russ:  Okay.  So as you know this is a business show, so what’s the biggest challenge?

Randy:  Finding the clients.  We think that the majority of the 90 million Americans that have an account could use our help which is a great pool to work from; I don’t think it gets a whole lot better than that.  But one of the things we say is we can’t educate people into submission – it’s expensive to educate – but we do some of that just to start getting people thinking about their 401K because it’s the last thing they want to think about.

Russ:  So why Kansas City?

Randy:  Well the three co-founders all grew up between Olathe, Lenexa and Shawnee, which are all on the Kansas side, and so we love Kansas City and we have no plans on going anywhere else.  The city is amazing, the support is fantastic and we love not having to look for a parking spot – I get really thrown off when we come down here – but we really like our spot where we’re at.

Russ:  And doing business now primarily in this part of the world or are you nationwide?

Randy:  Well we’re nationwide; anyone that has a 401K in the United States we can help.

Russ:  Great.  Well Randy I really appreciate it, it sounds like a real interesting business for sure.

Randy:  I appreciate it, thanks a lot.

Russ:  You bet.  And that wraps up my discussion with Randy AufDerHeide, Co-founder of Blooom and this is BusinessMakers USA.