eRollover CEO Tim Harrington on Filling a Void in the Retirement Planning Market

Tim Harrington is the Chairman and CEO of start-up eRollover.

Tim is a seasoned technology and consumer marketing entrepreneur.  Among Tim’s accomplishments is the ecommerce company Fogdog Sports--a venture he led from inception through successful IPO and post-IPO merger.

We had the opportunity to speak with Tim before his presentation at the Finovate conference in San Francisco.


Annuity Digest: How did you become interested in the retirement market and the opportunity with eRollover, and what is your larger vision for the venture?

Tim Harrington: I know the technology and consumer marketing space very well, and my move from the Bay Area to Atlanta was pretty much simultaneous with the eRollover opportunity.

The bottom line is that eRollover has a great model and I am excited about it.

In addition, the company has great people.  There are two young, energetic founders who were in need of a seasoned CEO with fundraising experience.

Donald Shapleigh and Benn Konsynski have also been key contributors as advisory board members.


Annuity Digest:  Can you talk about the need that the company intends to address?

Tim Harrington:  The retirement vertical represents a huge void.  There is pervasive distrust in financial markets, and no one is paying attention to people with less than $500,000 in assets.  In addition, retirement planning tools are rudimentary and misleading.

Retirement planning is a big mystery—it is a big black box that people have left alone.  We want to open up the box so people can understand what’s in it.

Think about how people track their stocks 15 years ago as it provides a reasonable analogy.  The Internet has turned this business completely on its head.

However, people are still clueless about retirement accounts.

We want to do the same things with retirement accounts that the Internet did for basic portfolio and stock accounts.


Annuity Digest:  What type of company is best positioned to address this need?  Is it an Internet-based publisher, a software company, financial advisors or product manufacturers?

Tim Harrington:  Think about what WebMD did for healthcare.  WebMD opened up people’s eyes and removed some of the mystery within the healthcare sector by putting a spotlight on previously unavailable information.

We want to be the trusted source of unbiased retirement information.  We will serve as an antidote to the propaganda that the industry tends to put out.

We want to provide tools and information to create an informed consumer.

The secret sauce of eRollover is social media.  We will provide more trusted information than you can get anywhere else. 

We did this before with Fogdog when we empowered the consumer by creating the best information to support their transaction.   Fast forward 15 years.  Is it information or social media that drives this consumer trust?  I would argue that it is the latter—people do not pay attention to the product manufacturer information.

Social media does not exist in the financial services segment.

I believe social media will be the key to building trust and confidence in your financial decisions by providing a place where consumers and financial advisors can come together. 

We are also building a social media-based profile tool for investment scenarios.  Consumers can double blind their information and compare their asset allocation and portfolio performance with others in the community or peer group.  Traditional brokerage houses would not want to encourage this behavior.

We believe in social media and serving as the trusted source to drive decisions moving forward.


Annuity Digest:  Can you talk about market size and the overall opportunity?

Tim Harrington:  There are roughly 64 million individual retirement accounts (IRA).  $250 billion was rolled over last year, so a ballpark estimate is that people rolled over around 4 million IRAs last year.  If we can capture 1-2% of that we will have a successful business.

I think there is a huge opportunity in dedicated financial services verticals.  Cake and Mint are great examples.  We can be the most successful in the retirement vertical.


Annuity Digest:  How do you plan to differentiate and compete with the Financial Engines, Fidelity’s, Vanguards, Mints and Schwabs of the world who are very efficiently aggregating these assets and have deep pockets?

Tim Harrington:  We are focused purely on consumers rather than businesses or plan sponsors.

That said, when a large company lays off thousands of people we see that as an opportunity a private label version of eRollover to provide trusted and unbiased information to individuals.

We want to be the consumer advocate for retirement planning and will have the capital to execute.


Annuity Digest:  Would you characterize eRollover as primarily focused on asset decumulation or asset accumulation?

Tim Harrington:  It’s all part of the retirement planning process and is driven by education.

For most people—whether the conversation involves annuities, options or reverse mortgages---it is a black hole.


Annuity Digest:  Does your financial advisor base reflect a specific focus on retirement planning?

Tim Harrington:  We want a broad base of financial advisors to come to the site and enter their information into the database.  We will let consumers filter based upon their interests and preferences.

We are working with financial advisor trade associations to pull people who are pre-qualified, but we are not pre-filtering.

What will ultimately differentiate financial advisors in our database is their participation in the community.

We also see an opportunity to build-out a community for financial advisors –many of whom have become independent.  Again, a social media will serve as the key resource for the advisor community.


Annuity Digest:  How many financial advisors do you need to have on board?

Tim Harrington:  If we had 100,000 financial advisors in our database paying a nominal subscription fee of $20 per month we would have a hugely successful business.


Annuity Digest:  Will the advisor-driven model be purely subscription or will it also have performance-based features such as lead generation?

Tim Harrington:  We are focused on subscription at the moment.

We want to try and avoid the food fight for the whales with lead generation.

Lead generation sort of flies in the face of our mission of serving the sub $500,000 market segment that is underserved.


Annuity Digest:  Do you see potential for revenue share on product transactions with financial advisors?

Tim Harrington:  We are looking at it and the possibility of becoming a limited broker-dealer.  It may be something we consider down the road if it is a win for us, our advisors and consumers.


Annuity Digest:  How do you plan to deal with filtering and qualitative assessment of financial advisors?

Tim Harrington:  There is not much front-end filtering that will take place initially.

We would prefer to let the community and social media let the cream rise to the top.


Annuity Digest:  What is the current process that determines how financial advisors are featured?

Tim Harrington:  Right now it is purely based on zip code and location.

We are developing technology that will contain consumer-advocacy oriented criteria based based on factors such as professional certification, investment goals, etc.

We are not an auction service for the highest bid to rise to the top.

Over time we would like to see social media rankings affect how advisors surface relative to one another.

Again, the secret sauce is the social media – both on the consumer and the financial advisor side.


Annuity Digest:  Is the current EAggreator feature licensed or proprietary?

Tim Harrington:  It is based on licensed technology from Yodlee.

The user interface (“UI”) is ours.


Annuity Digest:  Aggregation with a focus on proprietary user interface has obviously worked well for Mint.  What additional product features—analytics and intelligence on top of aggregation—are on the roadmap?

Tim Harrington:  Decision support software and recommendation engines.

At this point I’m not sure we will create our own as there are many potential partners doing nice work.

We feel the big value-add is the relative comparison stuff one can do within the community environment.

We want to keep things simple and accessible.  We have no desire to recreate the wheel.  We will use existing tools and present information in an intelligent way that is usable.


Annuity Digest:  How are you dealing with customer acquisition in what is a very competitive vertical?

Tim Harrington:  All of our traffic and membership growth to date is organic.

We have had some good early search engine optimization (“SEO”) results.

Facebook and Twitter have been good thus far.

We also have brought in a very talented social media director.

We have a media plan ready to go once the funding round is closed.  65 percent of our funding will be dedicated to customer acquisition.  Search engine marketing (“SEM") is part of our plan.  Radio and TV are not at the moment.

We will develop promotions and contests that are fun and exciting—for example, join as a member and get your IRA funded for the rest of the year.


Annuity Digest:  What is your current threshold for customer acquisition in terms of CPA?

Tim Harrington:  Single digits.


Annuity Digest:  Are there any core product or distribution partnerships in place?

Tim Harrington:  Yes, on the content front there are partnerships with Options Express, NASDAQ, and Bankrate.  Several others are in the works.


Annuity Digest:   What about licensing and API?

Tim Harrington:  This is something we will absolutely look at down the road.

We think there will be lots of interest in syndication if we can get traction with social media content generation.


Annuity Digest: Thank you Tim.

Key Phrases Manual: 


I may be corrected, but I think the social media comments refer to star ratings, user reviews and other forms of "Web 2.0" qualitative filters.

I think much of Motley Fool's past focus has been on discussion forums.