Review: Get professional advice for your 401k from Kivalia


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In a world without guaranteed pensions, responsibility for retirement planning falls on investors’ (not-wide-enough) shoulders.

Thankfully, the 401(k) account is a great way to save for retirement by delaying taxes and encouraging company matching programs (yep, that’s free money).

But, while investors have seen the options of what they can invest in improve over the past decade, it’s still somewhat hard to get professional advice for 401(k)s because your typical financial advisor doesn’t get paid for doing so (he can’t custody the assets and therefore, isn’t interested in helping).

So, where do you turn when you want more guidance on your assets in your 401(k)?

That’s where Kivalia comes in.

What is it: Kivalia provides automated professional-grade advice for investors with retirement plans.

The problem Kivali helps solve: Without direct access to your assets in your 401(k), it’s hard for traditional investment advisors to give advice because they can’t easily be compensated for their advice. Kivalia gets users to upload their firms’ retirement plans so it understands the options available to investors. It then does its analysis.

Without professional advice, many investors just leave their assets alone — to weather the ups and downs of the market without a lot of thought. Or, plan sponsors (the guys who administer  retirement plans) provide default options like target date funds (funds that automatically do asset allocation as an investor approaches retirement) as a better-than-nothing choice.

The result is that this 401(k) generation is retiring without ample faith and assets in their retirement plans. Research also shows that investors find all kinds of excuses not to add to their retirement plans or better structure them for future performance. Here’s an article I wrote that analyzed exactly what 401(k) investors are doing with their money.

How Kivalia works: A user begins by choosing his company’s retirement plan. If it isn’t there, she can upload her own plan’s information so that Kivalia can see the entire universe of investable options available in the plan.

3 options for portfolios: Users have the 3 different portfolio options to choose from: conservative, moderate, and aggressive. Based on this choice, Kivalia spits out a model portfolio and allocations to specific mutual funds. Updates to the models occur on a periodic basis and investors are alerted to changes via email and the website.

See the portfolio advice offered for employees of Cisco Systems:

provided by Kivalia

Results: Depending on which risk profile you’ve chosen, you get some fund recommendations and portfolio allocations. Kivalia isn’t setting and forgetting your portfolio — it does make changes in allocations and funds it recommends based on fundamental research and what’s going on in the market.

The system is really transparent — so Kivalia shows you just how well you would have fared if you had taken its advice and compares it to the return on a target date fund, an automated and very common default for many 401(k) investors. It also compares its own recommendations to an investor’s current portfolio — to help benchmark whether it’s providing value.

What’s it cost: Right now, it’s bubkus. Free. Zilch.


  • Financial Engines: The most notable player in this market is Nobel Prize winning professor, Bill Sharpe’s publicly-traded firm, Financial Engines. The firm has lots of relationships with employers and their retirement sponsors to offer advice within the investor’s account.
  • Smart401k: For $200 per year, retirement investors can subscribe to Smart 401k’s service that analyzes retirement portfolios and sends out periodic updates to its advice. Receive quarterly rebalancing emails  and then make the changes in your account.

I’ve spoken a few times with cofounder/CEO, Brian Murphy and to cofounder/CTOVincent Cocula (trained as a theoretical chemist at UCLA). Unlike some of the other investment advice platforms out there with roots in software, these guys are first and foremost professional investors and Kivalia follows their methods and style very closely.

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