Nationwide Financial Unveils Flexible Advantage

Nationwide Retirement Flexible Advantage offers a broad array of investment options without proprietary fund requirements, alongside what the firm described as fee transparency, fee-based compensation and comprehensive support.

“There is significant opportunity for growth in this industry and we strive to provide advisors with everything they need to build a successful practice,” said Anne Arvia, senior vice president of Retirement Plans for Nationwide Financial. “Flexible Advantage offers these advisors complete flexibility and choice, allowing them to better support the diverse needs of their plan sponsor clients.”

Arvia told PLANSPONSOR that Nationwide developed the offering with a specific set of advisers in mind – advisers who are predominantly fee-based, that earn more than 60% of their revenue from retirement plans, and that are registered investment advisers (RIA).  Further, she noted that these advisers account for 70% of industry sales, up from 55% in 2005.  Nationwide identified about 20 firms in early 2010, met with them, allowed them to help set product priorities, and gave them previews of the offering.  Those interactions included insights such as what true “open architecture” was (about 1,000 funds with no proprietary restrictions).  That feedback continued with twice-a-year face-to-face meetings, with phone calls in-between.

While the product was designed with a particular type of adviser in mind, Arvia explained that it can be used by any adviser, though they might not choose to use all the components of the offering.  

Some of the product’s key features include:

• More than 900 mutual funds from 90 fund families, as well as a variety of fixed investment choices, including the Nationwide Bank FDIC Insured Deposit Account.
• Personalized investment options, ranging from participants who are looking for “do-it-for me” solutions to those interested in going it alone and everywhere in between, according to the announcement.
• Multiple target date fund options, a self-directed brokerage account and managed accounts from multiple providers, including Nationwide ProAccount managed by Wilshire, and RIA Managed Account Services, which allows plan sponsors to select investment advisory services from a number of firms.
• Flexible compensation for advisors, with a variety of fee-based pricing options, including per participant, percent of assets or flat dollar. Commission compensation is available, if needed.
• “Up-front pricing”, that makes it easier for advisors to share expense information with their plan sponsor clients and participants, according to Nationwide.
• Flexible Advantage also offers Nationwide ClearCredit which enables Nationwide to lower overall plan costs.
• Fiduciary tools and support, including a new Web site that allows financial professionals to submit questions and get education from ERISA attorneys at Nationwide (seeNew Nationwide Financial Web site Offers Access to ERISA Attorneys, Regulatory Education)
• Plan support for advisors, including end-to-end sales support, plan reporting, participant education and regulatory updates.

Arvia noted that Nationwide would also be launching an investment solutions product towards the end of the year to help advisers further improve their service, including the ability to more efficiently construct model portfolios online. 

She noted that the firm already has 400 proposals out regarding the new product, and have already sold three installations since it was rolled out about 2 weeks ago. 

"We’re here to help advisors help plan sponsors build successful retirement plans for their participants. This product was designed based on research and feedback from retirement plan specialist advisors,” said Arvia. “Our intent with this product is to make it easier for them to focus on doing what they do best – help their clients prepare for and live in retirement.”