Whether a client business owner asks an advisor to create or manage a 401(k) plan for their company or an advisor decides to add retirement plan management as an offering of their practice—it is seldom easy to accomplish.
This week, Aboon, an artificial intelligence-powered platform built from the ground up to make it easier for financial advisors to help their business owner clients launch and manage 401(k) plans, announced it has raised $17.5 million in seed funding.
While the round was led by Bain Capital Ventures, other firms including Altai Ventures, Runyon, Edward Jones Ventures, Outpost Ventures and EJF Ventures also participated.
“We see it as a blue-sky opportunity,” said Nick Gavronsky, CEO and co-founder of Aboon, who said that the name itself was a play on words, that it could represent “a boon” for advisors and business-owning clients alike.
“There is a huge opportunity with millions of businesses out there, many of them sole proprietorships, and more and more of them are looking for better tools to run their businesses,” he said, noting that the funding will go toward further building out its platform and automation capabilities, expanding integrations with advisory firms, and adding to the range of retirement products it supports.
Part of Gavronsky’s inspiration for founding Aboon in 2023 with COO Amy Ouellette came from his father’s experiences. He emigrated from South Africa, where he had run small businesses and did so again in the U.S., but was never able to offer a retirement plan for his employees due to the complexity of the process and lack of affordable plans.
Though Aboon might be unfamiliar to many advisors, Gavronsky said the company has expanded to tens of thousands of advisors since its launch by partnering with national advisory firms like Edward Jones.
Aboon is the third company Gavronsky, a serial entrepreneur, has helped found. The startup executive and former financial analyst said he learned a great deal about the difficulties involved in building plans and the technology to support them through his work as an early employee at Betterment, where he spent almost three years before departing as a senior product manager working on growth initiatives in 2016.
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A screenshot of the Aboon platform.
Asked whether Aboon was meant for a particular size or type of business owner, he said that the platform was meant for any business owner.
“Landscapers, to doctors, to law firms, as little as two to three employees up to hundreds,” he said, reiterating that his company was not going directly to business owners.
“We are partnering with advisors and built it from the ground up for the advisors, that’s really our distribution model,” said Gavronsky.
He said one of the many problems in creating plans has been the many manual processes and the amount of paperwork involved for both the business owner and the advisor.
“It leads to a very slow process, taking probably 10 to 12 weeks to get a plan up and running, from wet signatures and what can be a lot of paperwork for all involved, there are a lot of tools out there to help but no one has really solved those problems around speed and service,” said Gavronsky.
“We are an AI-powered third-party administrator, the plan will still need a record keeper,” he said, adding that Aboon has partnerships and integrations with Capital Group, Empower and Manulife John Hancock, among others.
“We are focused on the design, win and launch problem,” said Gavronsky, adding how Aboon not only speeds up the plan design process, but also provides comprehensive quotes on cost for advisors and clients, as well as automated participant onboarding, and comprehensive, year-round compliance services.
When asked about competitors, he said while many had dipped their toes into serving advisors, those providers were too often layering on features for advisors.
“We have built from inception a [full platform] built for participants and advisors both,” he said, a major priority having been enabling advisors and their clients to design plans within minutes.
“Our goal has been to streamline the process from that 10 to 12 weeks down to a day, and we are partnering with the record keepers to do so,” he said, adding that along with the technology, an important pillar of the platform is pairing it with real-time support.
“We provide a dedicated plan consultant,” who helps the advisor determine how best to integrate the platform and processes into their practice, he said.
Gavronsky also reiterated that many members of his team had come on board with industry experience from firms including Cetera, Pentegra and Vestwell, among others.
Researchers and the industry have discussed the multi-trillion-dollar retirement gap for more than a decade. More than 20 states now have mandates for retirement plans, which will drive millions of employers to act.
“We believe the next generation of retirement infrastructure will be advisor-led, tech-enabled and powered by AI,” said Matt Harris, partner at Bain Capital Ventures, in a statement, “Aboon has built the right product at exactly the right moment.”