Selecting a recordkeeper is critical for retirement plans, and surveys that PLANSPONSOR and PLANADVISER conduct every year reveal a vast array of services that recordkeepers provide.
It is also interesting to note the disparities between what retirement plan advisers and sponsors look for when selecting a recordkeeper. Advisers take more of an analytical, business-oriented approach than sponsors, whose focus is on the practicalities of offerings. The 2016 PLANADVISER Practice Benchmarking Survey found that the top three criteria advisers look for when selecting a recordkeeper are value for price (42%), fee structure for plan (29%) and investment options available (12%).
The 2016 PLANSONSOR Defined Contribution Survey, on the other hand, shows that sponsors evaluate a wide array of services from their recordkeepers. On a scale of 1 to 7, with 7 being excellent, the services sponsors find most useful are compliance support and testing (6.46), service team responsiveness (6.46), Form 5500 processing (6.45), legislative and regulatory updates (6.38), service team industry knowledge (6.38) and plan communications (6.35).
A third survey, the 2016 PLANADVISER Recordkeeper Services Guide, discloses that recordkeepers offer a number of services beyond those mentioned above. All of the 24 recordkeepers surveyed this year provide education and enrollment support. Eighty-five percent provide plan benchmarking supports; 83% supply legislative updates; 83% help with plan design; and 75% help with rollovers, investment monitoring and investment policy statements (IPS). Sixty-six percent offer lead generation services to advisers, and the same percentage make Employee Retirement Income Security Act (ERISA) counsel available.
NEXT: What to consider when selecting a recordkeeper
Because most recordkeepers have been in the business for 30 years or more, the majority are fully capable of providing core recordkeeping services, says Harry Dalessio, head of sales and strategic relationships for Prudential in Hartford, Connecticut. When advisers and sponsors are looking for a new recordkeeper, or to assess the strengths of their current one, they should explore “the recordkeeper’s commitment to the business and what they are doing to keep up with rapidly changing regulation and financial technology,” Dalessio says. “Plan sponsors and advisers should ensure that their recordkeeper is making the investments to evolve the participant experience and be nimble. For example, what are they doing to enhance the digital experience, and what is their vision for the next five to 10 years?”
And while the PLANADVISER and PLANSPONSOR surveys didn’t touch on financial wellness, that is now a major, and a growing, expectation of sponsors and advisers, says Marc Caras, director of Pershing’s retirement plan business in Jersey City, New Jersey. “Sponsors we are interacting with are looking for more robust service sets that offer a full financial wellness package that extends beyond investments.” And that, Caras maintains, will inevitably result in better outcomes.
Dalessio agrees that both financial wellness programs and outcomes are becoming more top-of-mind for sponsors, who want to know that their employees will be able to retire at the appropriate time, and that financial worries are not interfering with their productivity.
Reducing recordkeepers’ fees is the No. 1 objective of the sponsors that Adam Bergman, a senior tax partner with IRA Financial in Miami, Florida, serves. “We specialize in plans with 10 or fewer employees, and the majority of these plans are safe harbor plans that require minimal nondiscrimination testing,” Bergman says. As such, IRA Financial negotiates lower fees on behalf of its clients, who have become more aware of the importance of fee negotiation in recent years, he says.
Beyond this, Bergman wants to ensure that the recordkeeper can answer participants’ questions about distributions and that they file documents in a timely manner with the Internal Revenue Service (IRS) and the Department of Labor (DOL).
Privately-held
independent insurance broker Lockton is
expanding its presence in the retirement services industry with the addition of
Michael Duckett to its Washington,
D.C. office. Duckett has worked for several major plan administrators including
Principal and T. Rowe Price. He is versed in recordkeeping, communication,
investment management and fiduciary oversight. He has designations as an
Accredited Investment Fiduciary and a Certified Plan Fiduciary Advisor. Duckett
is also recognized as one of the Top 50 Advisors Under 40 by NAPA Net,
the magazine of the National Association of Plan Advisors.
“Changing
regulation and an increasing number of employee lawsuits have made retirement
management a key focus,” says Lockton’s
Washington D.C. President Robert Connolly. “Our clients are looking to us
to help them both care for their employees’ well-being and protect their
business’s bottom line. Bringing expertise like Mike’s to the table helps us do
that.”
“There are a
lot of advisers who can talk investments,” says Pam Popp, Lockton’s National Retirement Practice president.“But there aren’t a lot who have seen
retirement from all the angles that Mike has. He can not only help clients
choose investments, he also understands the regulatory environment and the
operational complexities of administering a retirement plan. That kind of
holistic expertise makes a huge difference for employers who want to both take
care of their people and manage risk.”
Virtus Investment Partners has entered an
agreement to acquire RidgeWorth
Investments. This multi-boutique asset management firm has $40.2 billion in
assets managed by affiliated investment managers and unaffiliated subadvisers.
The transaction increases Virtus' assets under management to $86.8 billion on a
pro forma basis, the company said.
The
acquisition will add complementary institutional-quality equity and fixed
income strategies from RidgeWorth's boutique managers, who will continue to
operate independently. The firm intends the transaction to diversify and expand
Virtus' client base, particularly among institutional investors, while
enhancing distribution resources in the institutional, retirement plan, private
bank and registered investment adviser channels.
"The
acquisition of RidgeWorth will give us increased scale, a wider range of
strategies for institutional and individual investors, and broader distribution
and client service resources, particularly for institutional clients,"
says George R. Aylward, president and chief executive officer of Virtus.
"The combined company will have a stronger and more diversified business
with the scale to better serve clients in a highly competitive industry."
The two
companies have comparable business models, both offering clients an array of
distinctive investment strategies from boutique affiliates with shared
distribution and business support functions.
"This
transaction will provide continuity for RidgeWorth's clients, who will continue
to partner with the same investment teams they respect and appreciate while
benefiting from the enhanced support of a larger, better resourced
organization," says Aylward.
Ashi Parikh,
CEO and chief investment officer of RidgeWorth adds: "We are very excited
to join Virtus, a firm that shares our vision, culture and approach to offering
investment solutions from boutique affiliates. This partnership marks an
important milestone in RidgeWorth's journey as it facilitates the transition of
RidgeWorth and its clients from a private equity-owned firm to an independent,
publicly traded investment management company."
NEXT: Wagner
Law Group Comes to D.C.
Wagner Law Group Comes to D.C.
Employee Retirement Income Security Act (ERISA) and
employee benefits firm The Wagner Law
Group has announced the opening of a new office in Washington, D.C.,
effective January 1, 2017.
"It is only fitting that a growing law firm
at the forefront of some of the most complicated legal and regulatory
landscapes, opens an office in our nation's capitol, and we are truly honored
and excited to be able to do so with a staff of outstanding attorneys,"
says Managing Director Marcia Wagner.
The new
office located at 800 Connecticut Avenue will be staffed with attorneys Dan Brandenburg and David Pickle and associate Seth Gaudreau along with an experienced
support staff. Brandenburg is recognized as an expert in the areas of pension,
401(k) and welfare plans, executive compensation including plans for tax-exempt
organizations, and executive employment. He has regularly represented clients
before the Internal Revenue Service (IRS), the Department of Labor (DOL) and the Pension Benefit Guaranty
Corporation (PBGC). He also counsels clients with respect to the IRS and DOL
voluntary compliance programs as well as during audits and investigations
initiated by the IRS, DOL and PBGC.
Pickle
specializes in all aspects of ERISA Title I provisions including prohibited
transactions and disclosure rules. His experience includes advising clients
with respect to investment management services, investment transactions,
mergers and acquisitions, and DOL investigations. His clients have included
both plan sponsors and investment-related service providers. Gaudreau conducts
legal research and drafts memoranda and briefs for ERISA. He also prepares
ERISA-related governmental filings and is active in the firm's privacy and
security law practice.
Next: USI
Acquires Ball Peoples
USI Acquires Ball Peoples
USI Insurance Services (USI) has acquired Ball Peoples, an employee benefits
advisory firm headquartered in Austin, Texas. Since 1975, Ball Peoples has been
servicing clients throughout Central Texas and across the Southwest. The employees
will remain at their Austin location. Terms of the transaction were not
disclosed.
John D. Collado, USI Southwest regional chief executive officer, said: “This
acquisition further strengthens our footprint as one of the top three retail
employee benefits insurance brokerage firms in Texas, and increases our ability
to deliver our clients a powerful arsenal of employee benefits services and
solutions. The talented staff at Ball Peoples has a laser focus on helping
organizations build a culture committed to employee benefits. This client
centric approach closely aligns with the USI ONE Advantage, which is setting a
new standard for customized risk management and benefit programs that generate
positive economic impact for clients. Tom, Danny and their team will play an
important role to further our employee benefits practice throughout the
Southwest region, and we are excited to have them join the USI family.”
Thomas H. Ball III, co-owner, Ball
Peoples, added: “For
42 years, our strategy has been based on a high-touch, service driven model
where relationships matter and best in class solutions are delivered. Our
clients will continue to benefit from this methodology, but now they can tap
into USI’s robust products that, in addition to employee benefits, include
property-casualty, retirement consulting and personal risk.”
NEXT: Wagner
Law Group Adds Partner
Wagner Law Group Adds Partner
Dan Brandenburg has joined ERISA and employee
benefits firm, The Wagner Law Group.
He will be based out of the firm’s new office in Washington, D.C. Brandenburg is
versed in the fields of pension, 401(k) and welfare plans, executive
compensation including plans for tax-exempt organizations, and executive
employment. He also has substantial experience with association-sponsored
member service programs. Brandenburg represents
clients regularly before the Internal Revenue Service (IRS), the Department of Labor (DOL) and the Pension
Benefit Guaranty Corporation (PBGC), and counsels clients with respect to the
IRS and DOL voluntary compliance programs and audits and investigations
initiated by the IRS, DOL and PBGC.
"The depth and breadth of Dan's ERISA
practice and his outstanding reputation as an exceptional attorney are an
obvious fit for The Wagner Law Group and we are excited to have him join our
growing team," says Managing
Director Marcia Wagner.
He received
an LL.M. in taxation and a J.D. from Georgetown University Law Center. He
earned his bachelor’s degree from Rutgers University, and is admitted to
practice law in the District of Columbia. Prior to joining The Wagner Law
Group, Dan was a partner at Saul Ewing LLP and the managing shareholder of
Sanders, Schnabel & Brandenburg PC. Brandenburg has an AV peer review
rating from Martindale-Hubbell,
has been named to The Best Lawyers in
America list for Employee Benefits and ERISA Law since 2001, and has also
been selected as a Washington, D.C. Super
Lawyer from 2007 to the present.