Cake Financial

Cake Web Site Maintenance

Chris Pruett — Thu, 24 Sep 2009 23:14:36 +0000

Hello,

We will be performing an upgrade to our system this afternoon between 4:30 PT and 5:00 PT. The Cake web site may be intermittently unavailable during that time.

We apologize for the inconvenience, and thank you for your patience.

If you have any questions, please email us at service@cakefinancial.com.

– The Cake Team

Cake Web Site Maintenance

Chris Pruett — Mon, 14 Sep 2009 22:17:55 +0000

Hello,

We will be performing routine maintenance from 8:00-10:00 PM PT on Tuesday, September 15. The Cake web site will be unavailable during that time.

We apologize for the inconvenience, and thank you for your patience.

If you have any questions, please email us at service@cakefinancial.com.

– The Cake Team

Cake Retirement Calculator and Analytics

manu — Thu, 03 Sep 2009 18:28:40 +0000

Our mission at Cake Financial is to help you make the best decisions with your investments so that you will have more to enjoy later in life. We are on your side, which is rare to see in these trying times.

To accomplish this, we have created an elegant retirement planning service that is at once holistic, automatic, and simple to understand, yet is also sophisticated enough to adapt as you get older and your circumstances change. And it just takes a minute or two to set up and to get your results.

You can access the Retirement Planning service as part of both Cake Comparison ($29.99/year) or Cake Premium ($99.99/year).

What You Get:

Our retirement service does three main things: 1) we calculate how much you will need for retirement, 2) we project how much your current investments will be worth, and 3) we show you how much you will be over or under your retirement goals. We then provide you a handy dashboard so you can easily monitor your progress.

What You Need To Do:

All you need to do is simply enter your current age, your target retirement age, and your annual salary. Next, securely connect your 401K’s, IRA’s, and brokerage accounts. That’s all you need to do. Now sit back and let us do the rest.

How We Calculate Your Numbers:

When calculating the amount you need for retirement, Cake looks at all your holdings, classifies them into different asset classes and calculates a projected value of your investments based on historical long term growth rates of those underlying asset classes.

The following table contains the historical long term growth rates of different asset classes that go into your calculations.

In addition to this, Cake includes Social Security benefits and also takes into account the effects of inflation, your salary increase over time and assumes you contribute a certain percentage of your salary each month to your retirement / investment account.

Here is our formula and the specific calculations that go into your retirement plan.

You can change your assumptions at any time and see the corresponding changes to your retirement plan by clicking on “Adjust Goals” on your homepage.

UPDATE: Retirement Planning service is only available as part of Cake Premium ($99.99/year).

Walt Mossberg Reviews Cake Premium on TV

Steve Carpenter — Fri, 21 Aug 2009 22:41:37 +0000

Cake Financial Releases Personalized Investing Service to Help Millions of Investors Get Back on Track for Retirement

Steve Carpenter — Thu, 20 Aug 2009 13:47:27 +0000

Cake Premium Puts Billions Back Into Consumers’ Pockets — Delivers Objective Investing Guidance With High-Performing Funds and Lower Management Fees So Consumers Can Reach Their Specific Retirement Goals

SAN FRANCISCO, CA–(Marketwire - August 20, 2009) - Cake Financial (www.cakefinancial.com), an online investment service that helps consumers make smarter decisions by providing trusted guidance, today announced the availability of Cake Premium, a personalized service that instantly analyzes consumers’ investment holdings and suggests replacement funds with better performance, lower risk, and lower fees. Cake Premium addresses crucial needs of average consumers by providing an easy-to-use service that delivers objective guidance with a proven track record of success and ongoing monitoring. The service will help consumers achieve their specific retirement goals and potentially save hundreds of thousands of dollars in fees that are typical of most mutual funds.

Trillions of dollars have been wiped out from 401Ks and retirement accounts, and consumers are now more than ever searching for personal investing solutions that they can trust, comprehend and that provide transparency. According to a recent survey conducted by Harris Interactive® on behalf of Cake Financial, only 21 percent of U.S. adults who use financial investment firms are confident that firms put customers’ best interests ahead of their own when it comes to managing client investments. Moreover, barely 12 percent of those adults who currently invest in mutual/retirement funds believe that the cost and fees they pay for mutual funds justify the return on their investments.(1)

“Investing is intimidating and a chore for people of all ages so many shy away from taking control of their investments,” said Steven Carpenter, Cake Financial co-founder and CEO. “It doesn’t need to be that scary or difficult. With Cake Premium, our goal is to give consumers an easy way to do better by providing a clear asset allocation strategy and putting more money back into their pockets by strategically indentifying the highest yielding funds with the lowest management fees.”

Cake Premium is simple to set up and incorporates consumers’ information into its proprietary algorithm to deliver individualized asset allocations and substitute funds, so they can achieve their specific investment goals and retire comfortably by a desired age. Consumers are provided with an assessment of their current allocation and holdings against specific replacement funds (chosen by Cake) that are higher quality with lower costs. Data is aggregated from more than 18,000 funds across 70 different investment categories. Cake Financial estimates that just by reducing the hidden fees associated with most mutual funds, consumers will have the potential to gain an average of $200,000 during the course of their investment cycle.(2)

Consumers can easily link to an unlimited number of 401Ks and brokerage accounts from more than 65 of the leading investment services including Fidelity, Schwab, E*TRADE, TD AMERITRADE and more.

Cost and Availability

Cake Premium is available for $99.99 per year. For more information regarding Cake Financial’s services, visit: http://www.cakefinancial.com.

Additional Services

Cake Financial provides multiple solutions so consumers can choose the service that will best help them achieve their individual retirement goals. In addition to Cake Premium, other services include:

--  Cake Free -- a free service that allows consumers to track their
    investments, get market insights and understand performance so they can
    more effectively manage their retirement portfolio.

--  Cake Comparison -- a service that helps consumers maximize their
    returns by indentifying higher quality funds with lower management fees.
    Cake Comparison is available for $29.99 per year.

--  Cake Take -- the company grades close to 18,000 mutual funds, 2,000
    stocks, and over 400 ETFs and gives high marks to those low cost index
    funds and ETFs, and the small percentage of actively managed funds that
    consistently beat investing industry benchmarks, such as the S&P 500.

--  Cakedex -- an index of the top 100 holdings of top investors.
    Consumers can compare their performance and get new investment ideas.

About Cake Financial

Headquartered in San Francisco, CA, Cake Financial Corporation is an online investing service that helps individual investors manage their 401Ks, retirement, and brokerage accounts. Cake offers a complete view across an unlimited number of online accounts with clear performance reporting, as well as personalized, objective insights not found anywhere else. Cake Financial is backed by Alsop Louie Partners and KPG Ventures, as well as a number of angel investors including Baseline Ventures and Bay Partners. For more information visit: http://www.cakefinancial.com.

(1) Survey Methodology — Harris Interactive® fielded the study on behalf of Cake Financial Corporation from June 22-24, 2009 via its QuickQuery(SM) online omnibus service, interviewing a nationwide sample of 2,261 U.S. adults aged 18 years and older. Data were weighted using propensity score weighting to be representative of the total U.S. adult population on the basis of region, age within gender, education, household income, race/ethnicity, and propensity to be online. No estimates of theoretical sampling error can be calculated; a full methodology is available.

(2) Example — a 47 year old with a $250k retirement account balance in mutual funds with higher than average fees and turnover can save up to $200k up until retirement.

Site Maintenance

Steve Carpenter — Fri, 14 Aug 2009 02:13:29 +0000

Hello Everyone-

I just wanted to let you know that the Cake website will be unavailable for about 90 minutes this evening starting at 10 PM ET. We are upgrading the Cake service so that you will have more powerful tools to help manage your retirement and brokerage accounts.

Thank you for your patience.

Hidden Mutual Fund Fees To Be Made Transparent

Steve Carpenter — Thu, 25 Jun 2009 23:53:59 +0000

Earlier this week, the House approved a measure that would force mutual fund companies to disclose all of the fees they charge individual investors. This is great news for all of us that have the majority of our retirement savings in mutual funds and currently have no idea how much we are spending each year on these services.

The legislation is part of an effort by the committee to improve disclosure of 401(k) fees and create more transparent marketing of retirement products…In addition, all fees taken from a plan participants’ 401(k) account would be disclosed in one dollar amount in their quarterly statement.

The reason this is such a big deal for investors is two-fold.

First, these hidden fees can sometimes be substantially more than the published management fees you think you are paying. In a report done by Gregory W. Kasten of Unified Trust Company, which appeared in the Journal of Pension Benefits, he found that the average stock mutual fund cost over 3% a year when incorporating these fees, such as transaction fees. Here is a great chart showing some funds, like Technology and Small Growth, that more than double their expense!

Second, and most important, investors are cheated out of the opportunity to compound these savings over time, significantly eating away at their nest egg. In real terms, investors are losing $50K to $400K over their lifetimes to these fees.

So what can a smart investor do to combat high mutual fund fees? Stick to a low-cost strategy appropriately weighted with Value and Growth, International, and Fixed Income Index funds.

The Mutual Fund Industry Is Facing Innovator’s Dilemma. Low-Cost Index Funds and ETF’s Will Be Norm In 10 Years.

Steve Carpenter — Fri, 05 Jun 2009 18:27:56 +0000

Mutual funds are now a $100B a year business. We have close to $10T of our hard-earned dollars invested in mutual funds. But after 20 years of torrid growth is the industry on the precipice of a massive restructuring akin to what so many other mature businesses such as newspapers, music, and autos are experiencing?

I believe it is based on the acceleration of certain trends over the past few years and the long-lasting impact of the stock market’s performance over the past 18 months on the average individual investor.

The Innovator’s Dilemma is a theory and terrific book written by Harvard Business School professor Clay Christensen that states that established products are vulnerable when disruptive technologies offer lower-cost solutions that that will, over time, get better and become a serious threat- eventually destroying billions of dollars in enterprise value and creating new winners.

I believe we are seeing this paradigm in action with the rise of low-cost index funds and ETF’s. Companies at the forefront of this low-cost strategy like Vanguard and Barclay’s iShares are posied to leapfrog the old stalwarts and capture much of the new value creation.

According to the Invesment Company, the mutual fund industry trade group, mutual funds experienced a net cash outflow of $226B, the first such annual outflow in long-term mutual funds since 1988.

It is interesting to note that the industry recognizes the threat of low-cost alternatives and investors are indeed paying less than we did a decade ago- management fees have decreased:

But look closer. It appears that fund companies have simply transferred those management fees into hard-to-track “marketing fees” called 12(b)-1 fees that most investors never see:

While investors moved money away from actively managed mutual funds, 2008 saw index funds increase share.

And assets in ETF’s, while still small compared to mutual funds, continue to increase in size and number.

I am not suggesting that this change will happen overnight. But as we are seeing with the demise of newspapers and the auto industry, the seeds for disruption were planted long ago and the innevitable evolution takes decades. But when it eventually comes, it arrives quickly and the disruption is rapid.

And, in the case with mutual funds, individual investors will be better off having to pay less money for high-quality investments that give us more for our retirement nest egg.

How We Work to Keep Your Information Safe and Secure

sjunkergard — Fri, 22 May 2009 21:59:24 +0000

Protecting your sensitive financial information and making you feel confident using our service is the most important thing we do at Cake Financial. As the VP of Engineering, I want to take this opportunity to give you an overview of our security polices at Cake and to tell you specifically how we keep your information safe and secure.

We want to make it as easy as possible for you to have access to your brokerage and retirement accounts and to help you with your retirement planning. Our technology must to do all of this while also safeguarding your information - such as the value of your investments or your salary - and ensuring that no one other than you has access to it.

The team here at Cake has extensive experience working at large financial services companies designing and building systems that have successfully protected you as you have paid your bills online, used your credit cards at large e-commerce sites, and traded stocks at your online brokerage firm. We have applied what we learned and practiced at these companies to create a service that is as safe and as secure as the bank you use - but more accessible and user-friendly.

Here are some of the most important policies that we employ to keep your information safe:

1) We do not share your brokerage and retirement account information with anyone else

We have built our own data import and account aggregation service to make sure that your data is never shared with any third party. Our aggregation platform is state of the art and one that we are very proud of.

2) We security classify every piece of personal information and treat it accordingly

The security classification is used both to determine what data we show to our users when and how we manage that data internally. What this means to you as a user is that you will for example never receive an email from us that contains the value of your investments and we restrict the amount of information you can see on our website without logging in.

3) We follow security best practices employed by the banking and brokerage firms you already use

Best practices are a big deal when it comes to security as the field is constantly evolving. We employ the same type of processes as other, much bigger, financial institutions do. Our security best practices include such things as encrypting sensitive data at rest and and help us building our infrastructure to be as secure as possible.

I appreciate your concerns around the security of your information. I take my responsibility in this area very seriously and I do everything I can to ensure that you are safe at Cake. If you have further questions about our security policies, or anything else for that matter, please feel free to send us an email at service@cakefinancial.com. You can also read more about our security work in a previous blog post that you can find here.

Sven Junkergård
VP, Engineering at Cake

Charles Schwab Reducing Mutual Fund Fees and Launching ETF’s To Grab Market Share

Steve Carpenter — Tue, 12 May 2009 18:49:58 +0000

The other day, I commented that many of the major mutual fund companies were increasing their fees to compensate for falling asset bases. This despite delivering one of the worst performances to individual investors in the history of the stock market. As I wrote:

After a year in which the industry as a whole produced one of its worst performances ever, that saw performance drops of more than 40% and the implosion of famous and non-famous mutual fund managers alike, individual investors are going to have to pay more, not less, for their funds this year.

It looks like one company, Charles Schwab (SCHW), the leading online brokerage firm with 7.5MM accounts and over $1T in client assets, sees this as an ideal opportunity to take business away from the competition. Schwab announced this week that they will reduce the minimum amount invested to $100 and DECREASE fees on all 24 of their equity and fixed income funds.

Schwab is seeking to draw new customers after the worst year for the S&P 500 in seven decades eroded client assets.

All fees on six equity index funds will decline, effective immediately, to as low as 0.09 percent of assets. Overall, fees will fall an average of 54 percent, he said.

The good news for investors is that this is not some temporary promotion.

“We’re taking on what are some of the leaders of the pack,” said Randall Merk, a Schwab executive vice president. “This is not just a temporary promotion, this is a permanent reduction in fees.”

This is a measured strategy by Schwab to take on Vanguard, the leading provider of low-cost index and mutual funds. While the majority of the industry seeks to preserve the status quo and their hefty management fees, innovators like Schwab and Vanguard continue to try and serve the interests of the individual investor by giving them more money to have when they retire. As I have said before, saving a small amount on fees each year compounds over time and can result in an additional hundreds of thousands of dollars when people retire.

The other part of Schwab’s land grab is to develop and launch its own low-cost ETF’s. As David Bogoslaw says in his BusinessWeek piece,

With about $60 billion of clients’ money already invested in other companies’ ETFs, which translates to roughly 10% of all ETFs volume, “we believe Schwab is already a major player in ETFs,” says Merk. “We would like to be a bigger player in ETFs.”

More than 20% of Schwab’s trading volume may now be coming from individual investors trading in ETFs, which is double what it was a year ago, says Snowling. One big draw of ETFs is the ease with which investors can move into and out of equity market sectors, which is more important amid heightened market volatility.

It is good to see at least one company acknowledging that mutual fund fees are critical to investor performance and that individuals are better off with lower cost alternatives. It will be interesting to see how Schwab’s strategy pays off over the next few years.

Cake Financial

Cake Web Site Maintenance

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Cake Web Site Maintenance

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Cake Retirement Calculator and Analytics

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Walt Mossberg Reviews Cake Premium on TV

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Cake Financial Releases Personalized Investing Service to Help Millions of Investors Get Back on Track for Retirement

Cake Premium Puts Billions Back Into Consumers’ Pockets — Delivers Objective Investing Guidance With High-Performing Funds and Lower Management Fees So Consumers Can Reach Their Specific Retirement Goals

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Site Maintenance

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Hidden Mutual Fund Fees To Be Made Transparent

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The Mutual Fund Industry Is Facing Innovator’s Dilemma. Low-Cost Index Funds and ETF’s Will Be Norm In 10 Years.

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