Deals and People December 9, 2016

Retirement Industry People Moves

Community Bank Systems to Acquire Northeast Retirement Services; IFM Names Development Director; PGIM Names Head of Research for Institutional Advisory Services; and more.
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Community Bank Systems to Acquire Northeast Retirement Services

Community Bank System announced that it has entered into an agreement to acquire Northeast Retirement Services (NRS). Upon the closing of the transaction, NRS will become a subsidiary of Benefit Plans Administrative Services (BPAS) a wholly-owned subsidiary of Community Bank System.

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NRS is focused on providing institutional transfer agency, master recordkeeping services, custom target-date fund administration, trust product administration and customized reporting services to institutional clients. Its wholly-owned subsidiary, Global Trust Company (GTC) is a non-depository trust company which provides fiduciary services for collective investment trusts and other products.

“We are very excited to be partnering with NRS, a respected and growing provider of customized institutional trust services,” says Community Bank System President and CEO Mark E. Tryniski. “The transaction will strengthen and complement our existing BPAS businesses, and represents an attractive and balanced utilization of our strong currency and existing surplus capital … We are also pleased that Thomas Forese, President and Chief Executive Officer of NRS, and the entirety of the current leadership team will continue in their capacities with NRS after the combination, as an operating subsidiary of BPAS.”

Thomas Forese, president and CEO of NRS adds, “Our Board of Directors and senior management team, in considering various strategic alternatives, placed great value on the compatibility of Community Bank System’s culture, employees, strategy and leadership with those of NRS.” 

The deal’s cash and stock transaction is valued at approximately $140 million and is expected to close in the first quarter of 2017, subject to certain shareholder and regulatory approvals. The transaction has been unanimously approved by the boards of directors of both companies.

NEXT: IFM Names Development Director

IFM Names Development Director

IFM Investors has appointed Paul Burraston as business development director for North America. He will be responsible for developing new business opportunities and managing significant relationships for all asset classes including infrastructure, debt investments, listed equities and private capital.

Burraston will report to Brian Clarke, head of Global Relationship Group.

“We welcome the addition of a seasoned veteran like Paul to oversee our work in serving our valued investment partners,” Clarke says. “We are particularly pleased to now have a full-time presence on the West Coast.­”

Burraston brings more than 20 years of industry and financial services experience to the team. He was most recently director of asset management at Credit Suisse Group, where he managed West Coast institutional distribution for CSAM Alternatives. He first joined the firm in 2004 as VP of investment banking, prime services. Prior to that, he worked as VP of institutional coverage for Metropolitan West Securities. He held roles in client services management and global custody and securities lending for Citigroup between 1995 and 1999.

This appointment marks another addition to IFM Investor’s North American Business Development team. In September, the company named Joe Tremblay and Dan Kim as business development directors with the team.

Burraston holds bachelor’s degrees in commerce and economics from the University of KwaZulu-Natal in South Africa.

NEXT: PGIM Names Head of Research for Institutional Advisory Services

PGIM Names Head of Research for Institutional Advisory Services

Bruce Phelps has joined PGIM as a managing director and head of research for its Institutional Advisory Services group. PGIM is the global investment management businesses of Prudential Financial.

PGIM’s Institutional Advisory & Services group advises on a variety of asset allocation, portfolio construction, and risk management topics to the firm’s institutional clients and global prospects. Phelps will report to Karen McQuiston, who was named head of the Institutional Advisory Services group earlier this year.

“PGIM’s advisory platform is a strategic priority as we look to bring our institutional clients differentiated insights that leverage the full breadth of PGIM’s expertise across our multiple manager boutiques,” says McQuiston. “Bruce brings exceptionally deep analytic expertise and a global institutional perspective, which are critical to address clients’ pressing cross-asset challenges.”

Phelps was most recently a managing director in the Quantitative Portfolio Strategy Group at Barclays Capital Research. Previously, he was a senior portfolio manager and co-head of fixed income at Ark Asset Management. Phelps was also a senior economist for the Chicago Board of Trade. He started his investment career as a credit analyst and foreign exchange trader for Wells Fargo Bank. Phelps received an A.B. in economics from Stanford University and a Ph.D. in economics from Yale University. He is a CFA charter holder.

NEXT: Mercer Appoints New Orleans Office Business Leader

Alliance Benefit Group Financial Services Adopts New Identity

Alliance Benefit Group Financial Services has reimaged itself as Intellicents. The firm will focus on insurance consulting, retirement plan design, fiduciary investment consulting, and personal wealth management services.

“Our mission of financial confidence for the American worker continues to be the heartbeat of our organization,” says Brad Arends, CEO. “Our aim is that this new identity will only heighten our ability to drive home our mission, bringing to you the most progressive ideas and technology.”

Intellicents President Grant Arends adds, “We’ve always prided ourselves in being pioneers within the investment management and employee benefits community. Our firm is cutting edge, combining the newest and best ideas that are supported by most innovative technology. The name intellicents speaks perfectly to this legacy and our mission as a company.”

The decision to fully rebrand came amidst the sale of the recordkeeping and administration division, Alliance Benefit Group North Central States, to Alerus Financial, at the beginning of 2016. The Intellicents brand went operational on December 1.

NEXT: Delaware Investments Appoints Head of Equities

Delaware Investments Appoints Head of Equities

Macquarie Group’s Delaware Investments has appointed John Leonard as head of equities, effective March 3, 2017. He will provide strategic oversight of the firm’s nine U.S.-based equity investment teams.

Leonard will report to Shawn Lytle, president of Delaware Investments, and will serve as a member of the firm's senior leadership team. In addition, he will become part of the global management committee led by Ben Bruck, global head of Macquarie Investment Management and chairman of Delaware Investments.

Leonard will also serve as global chair of equities for Macquarie Investment Management. “In this chair position, we are looking to John to find ways to improve how we support all the equity teams in our asset management platform,” says Bruck. “John embraces our multiboutique approach to investing, and we are confident he will help us maintain best-practice support to our teams, as well as selectively add to our equities capabilities globally.”

Leonard joins Delaware Investments from UBS Asset Management, where he spent 18 years in several roles including global head of equities.

“Our multiboutique structure allows us to offer diverse equity styles that are best suited for clients’ varying investment needs,” says Lytle. “John has a track record of investment excellence as both a portfolio manager and as a global leader that puts him in an elite class of investors. His extensive experience leading equity teams with different investment styles is a strong fit for our culture and focus on high-conviction strategies.”

Lytle will continue as interim head of equities until March 3, 2017.

NEXT: Mercer Appoints New Orleans Office Business Leader

Mercer Appoints New Orleans Office Business Leader

Global consultant Mercer has appointed Mimi Farrell as office business leader for the firm’s health business in New Orleans. She will be responsible for executing the local health and benefits consulting strategy, while reporting to Mike Williams, Houston office business leader for Health.

“We’re thrilled that Mimi has taken on this key leadership role,” says Williams. “Her wealth of experience, dedication to our clients, and in-depth knowledge of the New Orleans market make her the perfect fit for this position. Mimi’s insights and contributions will empower our clients and their employees to make better, more informed benefits decisions for themselves and their families.”

Farrell has more than 30 years of experience in brokerage, healthcare consulting and insurance carrier underwriting. She has consulted on several healthcare and group benefits issues including healthcare strategy, program design and financing, compliance, and total health management. She received a bachelor’s degree in mathematics and computer science from Tulane University and she is a certified employee benefits specialist.

Mercer is a global consulting firm specializing in talent, health, retirement and investments.

NEXT: Alliance Benefit Group Financial Service Adopts New Identity

Compliance December 9, 2016

Providers Respond to Trump DOL Secretary Pick

The president-elect has nominated CKE Restaurants CEO Andrew Puzder as DOL Secretary. 

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Donald Trump has nominated an outspoken critic of federal government regulation as DOL secretary, placing more uncertainty on the future of the fiduciary rule, according to some observers.

Since President-Elect Donald Trump’s victory in November, advisers and other service providers in the retirement planning industry have been keeping their eyes peeled on whom he would appoint to lead the Department of Labor (DOL).

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Now, soon-to-be President Trump has nominated CKE Restaurants CEO Andrew Puzder as DOL secretary. Puzder is a vocal critic of many current government policies including the Affordable Care Act (ACA), the DOL’s pending overtime regulations, and raising the minimum wage. In media coverage he has spoken about the importance of leaving management of labor issues and other aspects of business regulation to the states. 

Although he hasn’t publicly commented on the DOL’s Conflict of Interest rule, he has written about how “overregulation” is harming the middle class. This resonates with the fiduciary rule’s biggest critics who argue that the policy’s excessive reporting and compliance requirements will make client service prohibitively expensive, forcing brokers to abandon lower-income clients.

John Alan Doran, a partner at the law firm Sherman & Howard, believes Puzder will roll back as much of the Obama Administration’s “decidedly pro-labor agenda” as he can, with the full backing of President Trump.

“Overall he is a strong critic of government regulation, preferring market solutions to government intervention,” says Doran.

But how feasible would it be for Puzder to stop the fiduciary rule in its tracks before it’s rolled out on April 10, 2017? Some analysts argue it’s not likely. Although one Trump adviser went on record criticizing the rule, at the time of the publication of this article, the president-elect had made no official public comment on it.

Furthermore, the fiduciary rule may take a back seat as Trump builds his cabinet, fills an empty seat on the Supreme Court, and looks to cut more well-known programs, such as the ACA or perhaps some unrelated financial market regulations. However, Puzder may be able to reshape certain provisions of the rule to make it more business-friendly. “We can expect Mr. Puzder to do all in his power to recalibrate the employer/employee dynamic in pro-business paradigm that will make heads spin,” Doran says.

NEXT: Advisers Should Stay on Course

The new Republican-controlled Congress is another player to consider. The legislative body could once again go through a process to attempt to strike down the rule, after a previous attempt ended in a presidential veto.  

Like the DOL, the new Congress would have to move very quickly to beat the fiduciary rule’s pending implementation deadline in April 2017. It is clear that both the industry and the DOL staff are hard at work bringing the rule into fruition—potentially wasted effort should the rule be gutted entirely. Even with these factors considered, many experts are urging advisers and firms to stay on course with executing strategies and leveraging technical solutions to meet compliance requirements in face of the DOL rule.

“We believe advisers need to continue to prepare for the DOL rule despite current speculation that it will not come to fruition because of the incoming administration,” says Wayne Withrow, executive vice president of SEI and head of the SEI Advisor Network.

Offering advisers insight on the fiduciary rule via a webcast hosted by consulting and accounting firm Grant Thornton, one consultant said: “We are recommending to clients that they should still steadily and carefully move towards the implementation. Sticking your head in the sand and hoping the regulation simply disappears is not a wise action.”

Other industry representatives are suggesting working with Puzder to ensure the DOL contributes to policies that will enhance Americans’ abilities to save for a comfortable retirement.

A statement shared with PLANSPONSOR by the Insured Retirement Institute (IRI) argued that Puzder will soon have the power to dramatically influence ongoing initiatives that are of key importance to the protection and well-being of individual investors. “This includes measures to improve Americans’ understanding of their retirement plan options and increase access to retirement income that cannot be outlived. We welcome the opportunity to meet with Mr. Puzder, to discuss our blueprint for retirement security, and find areas where we can work together to help American workers achieve a financially secure and dignified retirement.”  

In a recent meeting with the Securities Exchange Commission (SEC)’s Investor Advisory Committee (IAC), David Blass, general counsel to the Investment Company Institute (ICI), expressed “significant concerns” about the fiduciary rule. He recommends that the rule be “revised and harmonized,” because it has already harmed the industry in the form of small 401(k) accounts being abandoned by their intermediaries.

Still, it’s also important to note that Puzder may not have as direct an influence on the fiduciary rule as some may think. Actual enforcement of the fiduciary rule falls on the Employee Benefits Security Administration (EBSA), led by DOL assistant secretary Phyllis Borzi. Whomever will fill this seat under a Trump administration will also play a crucial role in the future of the fiduciary rule.

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