Deals and People June 16, 2023

Retirement Industry People Moves

CoastalOne appoints Keefe as CEO; WTW appoints Luke to lead global investments business; Calamos Wealth Management adds two senior executives; and more.

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CoastalOne Appoints Keefe as CEO

Kevin Keefe

CoastalOne, a wealth management firm, announced the appointment of Kevin Keefe as CEO. Located in Wilmington, Delaware, the firm is an independent broker/dealer and RIA platform with more than 160 financial advisers.

“I’m thrilled to be here at CoastalOne and excited to work with its new ownership to implement a dynamic vision and growth strategy for the future,” Keefe said in a statement.

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Previously Keefe he was president and CEO of Cetera subsidiary First Allied Securities. Prior to that, he was executive vice president and CEO of corporate RIA at Advisor Group.

WTW promotes Luke to lead global Investments business

WTW, an advisory, broking and solutions company, announced the promotion of Diya Luke as global head of investments, effective July 1.

Luke will be responsible for driving the growth strategy of the company’s Investments business. She joined WTW in 2004 as an investments consultant. Since then, she has held several leadership positions, most recently growth acceleration leader for the company’s health, wealth and career business. 

“We’re excited to appoint Diya to this important leadership position,” Julie Gebauer, head of health, wealth and career at WTW, said in a statement. “She’s an experienced leader with a track record for making smart connections and a deep understanding of our clients’ needs.”

Calamos Wealth Management Adds Chief Investment Officer, Chief Wealth Strategist

Calamos Investments announced the addition of two senior executives. Jon Adams joins as a senior vice president and chief investment officer of wealth management. John Campbell joins as a senior vice president, chief wealth strategist and head of wealth planning and trust services.

Based in metropolitan Chicago, the pair will report to Joe Weidenbach, who was hired as head of Calamos Wealth Management in October 2022.

“As part of our strategic growth strategy, we continue to invest deeply in our wealth management business,” John Koudounis, president and CEO of Calamos Investments, said in a statement. “I’m confident that Jon and John will provide additional firepower to our leadership team so that we can provide our trusted and sophisticated clients the solutions needed to address their most complex planning challenges.”

Cambridge Trust Company Announces Smith as Head of Wealth Management

Jeffrey Smith

Cambridge Trust Co., a subsidiary of Cambridge Bancorp, announced the hiring of Jeffrey Smith as the head of its wealth management group.

A leader in the New England banking market, Smith brings more than 35 years of experience to Cambridge Trust, where he will work with a team of more than 70 professionals.

“With a growing footprint in Massachusetts and New Hampshire, we are well poised to deliver our wealth management capability to clients and prospective clients in the region,” said Denis Sheahan, Cambridge Trust Co.’s president and CEO, in a statement. “We … are excited to welcome Jeff to build upon that foundation to lead the next phase of growth.”

Golia Joins Celent as Senior Analyst

Nathan Golia announced that he will be joining Celent as a senior analyst. He will work with Karlyn Carnahan and the North American insurance team.

Most recently, Golia served as editor-in-chief of digital insurance at Arizent, according to LinkedIn. There he led editorial strategy and content focused on digital transformation of the insurance industry.

Compliance June 16, 2023

Lawsuit Targets California Medical Center 403(b) Plan

A former employee of Cedars-Sinai Medical Center alleges onerous plan fees and under-performing funds.

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A former employee and plan participant has targeted the Cedars-Sinai Medical Center, Cedars-Sinai Board of Directors and 10 unnamed defendants in a complaint alleging fiduciary breaches that led to overly high fees and poor investment returns on participants’ retirement assets.

Plaintiff Jason Zimmerman—represented by Christina Humphrey Law PC and Bradley/Grombacher LLP— claims in the lawsuit two fiduciary breach counts against the defendants.

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Zimmerman claims plan fiduciaries for the Cedars-Sinai Health System 403(b) Retirement Plan breached their duties under the Employee Retirement Income Security Act by overpaying for covered service providers; offering and maintaining investment funds with higher-cost share classes when identical lower cost shares were available; retaining and offering poorly performing funds within the plan; and depriving participants of compounded returns through the excessive costs and investment in expensive underperforming funds.

Because of the alleged fiduciary misconduct, “The Plan, the Participants, and members of the putative class suffered substantial losses and legal damages in the form of higher fees and lower returns on their investments than they would have otherwise experienced due to investment in the Plan and Plan wide-misconduct,” the complaint states.

The lawsuit, Zimmerman et al. v. Cedars-Sinai Medical Center et al., was brought in U.S. District Court for the Central District of California. Cedars-Sinai Medical Center is located in Los Angeles.

In 2021, the Cedars-Sinai plan was comprised of 16,140 participants with account balances and more than $2.15 billion in assets, as of the most recent available data from Brightscope.

Although not named as defendants, covered service providers are relevant to the litigation. According to Form 5500s filed by the plan, Cedars-Sinai contracted with Voya Financial Partners to serve as the plan’s investment adviser and Voya Retirement Insurance & Annuity to serve as the plan’s recordkeeper. Voya was not named as a defendant in the complaint.

The Cedars-Sinai plan used a revenue-sharing arrangement to compensate Voya.

Retirement plan fiduciaries are not barred from using revenue-sharing agreements—variable direct and indirect compensation fees to a covered service provider—to offset investment funds’ expenses.

“The use of expensive share classes was likely motivated by an improper desire to hide fees from Plan participants by using revenue sharing to pay some or all of the participants’ fees instead of directly drawing them from the Plan or Defendants being billed directly for the fees,” the complaint alleges.

Zimmerman is seeking monetary damages, a judgment that the defendants are liable to make good all losses resulting from the alleged fiduciary breaches and certification of a class period applying to all participants and beneficiaries of the Cedars-Sinai plan from six years prior to the filing through the date of judgment.

A representative from Cedars-Sinai said the medical center does not comment on pending litigation.

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