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For 2002, a Remarkable Success

ExpertPlan is an Internet company, an Internet company

in the financial services industry. And, no, it is not going out of

business, as have hundreds of well-funded dot-coms. It isn’t


either, as are any number of venerable financial services firms.


with its business in cyberspace and its offices in East Windsor, is

a retirement plan administrator. Last year it added products,


and clients, and received substantial new funding. Winthrop Cody,

ExpertPlan’s founder and president, says his company is on track to

achieve profitability by the end of this year.

ExpertPlan was founded in July of 1999, and began life in the Trenton

Business and Technology Incubator. Cody, an MIT graduate (Class of

1982), had been vice president and CIO of the Copeland Companies,

the retirement planning division of CitiGroup. His long-term goal,

pre-Internet, was to move up with a corporation. But he saw the


inherent in the Internet, and believed it to be a natural fit with

the retirement planning industry.

Many small and mid-size employers — fully 80 percent of them —

do not offer their employees 401(k) retirement plans, most often


the plans are difficult and expensive to set up and to administer.

Yet the benefit is among those employees most request. With pension

plans a rarity, particularly at smaller companies, and Social Security

at least something of a question mark, a 401(k) is what most American

workers are counting on to provide a retirement cushion.

Cody set out to create the technology that would make it feasible

for all employers to offer the plans. His answer is software that

allows financial planners to easily set up 401(k) plans — and

similar tax-sheltered retirement vehicles — for their clients.

These clients most often are employers, but, as of this year with

the introduction of ExpertPlan’s Solo 401(k), clients can also be

self-employed individuals.

ExpertPlan typically cuts the cost of 401(k) set up

and administration in half. For a company of 50 people, the cost is

$750 for set-up, and $750 for yearly administration, plus $30 for

each employee enrolled. Not only does ExpertPlan save employers money,

but it also gives their employees features that are nearly always

missing in the plans offered by big companies.

Because ExpertPlan is Internet-based, employees can check up on their

retirement savings in real time (okay, maybe that isn’t the fun it

used to be), and can transfer money among funds, revise personal


see a contribution summary, and request loans. While their neighbors

at XYX Megacorp have to wait for a once-a-quarter statement, employees

at small companies with an ExpertPlan 401(k) can be online 24/7


funds around, hoping to outfox the markets.

But, because ExpertPlan is an Application Service Provider (ASP),

employees rarely know that what they have is an ExpertPlan 401(k).

Most often, the plan bears the name of the financial services firm

whose advisor sold it to their employer. ExpertPlan does not offer

plans directly, either to companies or to individuals, but rather

it works exclusively through those who sell the plans. Most often

this means a financial advisor connected with a large firm. Legg


Putnam, John Hancock, U.S. Bank, and Guardian, for example, are


and their agents can sell ExpertPlan products.

Cody guessed correctly about the fit between retirement plan


and the Internet. Just a-year-and-a-half after ExpertPlan was founded,

it moved from 900 square feet of incubator space to 7,270 square feet

in the Windsor Corporate Park, and doubled its headcount to nearly

20. Now, after another year-and-a-half, the company’s headcount has

doubled again.

"Things are going very well," says Cody. "We’re growing

and expanding." ExpertPlan now has about 50 customers, 30 of which

were signed up during the past 12 months. Space is growing tight in

the company’s headquarters, though Cody says he is being a bit quiet

about that. Already receiving calls from commercial real estate


he does not want more to come calling. Still, he says, "we’re

starting to burst a little bit."

In a year in which venture capitalists, tech group leaders, and state

development agency spokespeople all said — again and again —

that there is a real crisis in venture funding, ExpertPlan pulled

in a good amount. In late October the firm closed on $4.35 million

in a round led by Liberty Venture Partners, a Philadelphia venture

capital management firm, which invests in Internet, technology, and

health care companies that have demonstrated the potential to become

large and valuable entities. Other venture firms joining the round

included Meridian Venture Partners, Gamma Investors, Milestone Venture

Partners, and NextLevel Venture Partners.

Cody says raising the money was "tough because of the


Still, he acknowledges, ExpertPlan had an easier time than did many

other tech companies. Bottom line: "We were able to get


he says. This latest cash infusion, he says, will be enough to take

the company to profitability.

In another step toward maturity, ExpertPlan hired a

CEO this year. The new senior manager is Tim O’Brien, who was


from Prudential Mutual Funds, where he served as CEO.

This year brought other developments that raise ExpertPlan’s outlook.

The company had had two direct competitors, Emplanet and GoldK, both

of Boston. Emplanet has decided not to service clients’ accounts,

and is now "just pure software," says Cody. "We were


head to head," he says, but now "they’re recommending that

their clients come over to us." That will "almost double our

business," he says. As for GoldK, that company has raised $47

million — nearly 10 times as much as ExpertPlan has raised.


still standing," says Cody, "but they have had lay-offs, and

a management shake-up."

Why is ExpertPlan moving ahead, when so many Internet companies are

already fading from memory? For starters, Cody brought deep experience

and numerous industry contacts to his venture. Then, rather than rent

a loft in Manhattan, he started in an incubator. He also chose to

target a small universe of customers. While going after companies

directly would have cost a fortune in marketing dollars, going after

the financial advisors who serve them was a much more manageable task.

Or, as Cody says, "we don’t need to advertise at the Super


The company, which plans to add about 10 people this year, started

small, and is growing slowly. "We grow only as we need to


says Cody. "We focused on the business, spent prudently, and stuck

to our model."

Cody also chose a deep niche, and one well-suited to the Internet.

The online 401(k) market, by some estimates, will reach $2 trillion

in assets by 2005. And while consumers balked at buying furniture,

furs, and even toys online — sending E-sellers of those items

into bankruptcy — few object to monitoring and tinkering with

their 401(k) plans over the Internet.

ExpertPlan helps financial advisors win business, saves employers

money, and gives employees greater control over their retirement


It is a business that makes sense, and one that has been grown


Says Cody, "we’re happy."

— Kathleen McGinn Spring

ExpertPlan, 50 Millstone Road, Windsor Corporate

Park 400, Suite 100, Cranbury 08512. Winthrop Cody, president.


fax, 609-918-1328.

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