Pontera will launch a non-discretionary advice tool in September that gives financial advisors visibility into client 401(k) accounts without the ability to execute trades or manage withdrawals. The New York-based technology provider said the new functionality will offer guided workflows for participants to follow on their advisor's recommendations.

The move adds to Pontera's core discretionary offering, which allows advisors to directly manage held-away retirement assets with client consent. Advisors using the non-discretionary service will not have access to client accounts, the ability to withdraw funds or the ability to make contributions or beneficiary changes, the firm said.

The firm will open a waitlist for advisors to access the new tool along with existing services such as billing, reporting and supervision of client accounts. Pontera has partnerships with registered investment advisors including Steward Partners, independent broker-dealers such as Stifel Financial, and 401(k) recordkeepers including Manulife John Hancock Retirement. The firm does not disclose asset or advisor figures.

Chief executive Yoav Zurel said the option offers additional choice in how retirement savers receive financial advice. "Some want their advisor to implement every portfolio decision. Others want to stay directly involved while benefiting from professional guidance," Zurel said. "Our job is to build the infrastructure that supports both."

The launch follows a public dispute with Fidelity Investments, the country's largest workplace retirement recordkeeper with $17.9 trillion in assets under administration. In September 2024, the Boston-based firm sought to block credential-sharing systems to protect client information and assets, without naming Pontera directly.

A year later, Zurel wrote a letter to Fidelity accusing it of denying clients financial advice they may want for their held-away savings. Zach Pardes, head of brand communications for Pontera, said the new non-discretionary move has nothing to do with Fidelity or other recordkeepers. "It's really a reflection of different strokes for different folks," Pardes said. "Some firms prefer discretionary management, and some would rather work in a non-discretionary mode."

Andrew Besheer, managing principal of Besheer & Associates, called the move a white flag in the battle to obtain advisors' account holder credentials to directly manage held-away assets. "It certainly feels to me like Pontera has finally accepted that it's not going to win its battle with Fidelity over access to plan participant accounts," Besheer said.

Besheer said Pontera had argued for seven to eight years that advisors should have full discretionary trading access directly into plan accounts to manage a client's plan and non-plan assets holistically. He added that the non-discretionary platform option would still be useful for advisors, but not as useful as the initial idea of directly managing held-away assets.

"I think Yoav and his team came up with an outstanding idea for helping both advisors and retirement savers," he said. "In some ways, it could've been the golden goose. That said, I think maybe they were too stubborn and unwilling to be pragmatic in their relationships with plan administrators/custodians and that dogmatism has done them no good service."

Pardes said Pontera stands ready to work with Fidelity and any recordkeepers through existing application programming interface technology or by working with the recordkeeper directly to build a link for advisors. "If a record keeper does not have that available and would like us to build it, or we can work with a mutually agreed upon work frame, we'll do that," he said. "If a record keeper doesn't want to offer it, that is their choice." Fidelity did not respond to a request for comment on the non-discretionary offering.