Deals and People January 8, 2016

Retirement Industry People Moves

Arnerich Massena Inc. transitions a portion of its participant-driven retirement plan services practice to SageView Advisory Group; new hires at The Standard and Hub International.
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Arnerich Massena Inc. is in the process of transitioning a portion of its participant-driven retirement plan services practice, primarily defined contribution/participant directed retirement plans, to SageView Advisory Group. As part of this transition, two senior investment consultants from two Arnerich Massena, Howard Biggs and Jacob O’Shaughnessy will join SageView.

Biggs and O’Shaughnessy will transition from Arnerich Massena to SageView by the end of the first quarter. Between now and then, they will be meeting with clients, as part of the normal course of business, to discuss the transition to SageView.

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Biggs joins SageView as managing director. He will continue to consult with retirement plan sponsors to provide guidance on retirement plan governance, fiduciary risk management and committee investment responsibilities. Biggs has more than 30 years of retirement plan consulting experience, serving corporate, government and nonprofit organizations nationwide. Before joining SageView, he provided specialized retirement plan consulting services for more than 10 years at Arnerich Massena Inc.

O’Shaughnessy also joins SageView as managing director. He brings 15 years of experience providing consulting services to both corporate and government defined contribution and defined benefit plans. O’Shaughnessy is a well-known figure in the retirement plan industry, recognized as a speaker and moderator at national and regional conferences across the country. He also serves on the NAGDCA Industry Committee, elected by his peers. His expertise in the industry reflects a long-term commitment to serving retirement plan sponsors and participants.

Tony Arnerich, chief executive officer at Arnerich Massena, says the transition is positive for all parties. “This transition provides us both the ability to focus on our core competencies and for Arnerich Massena to grow and invest in the future,” he says.

Randy Long, SageView’s founder, cites Biggs and O’Shaughnessy for their high-caliber talent. “This is a step in our long-term plan for growth and providing the best talent and expertise to our clients,” he says.

NEXT: The Standard adds a retirement plan consultant associate in Dallas

Laura Peirson has joined The Standard as a retirement plan consultant associate for the south sales region. She is based in The Standard’s Dallas sales office.

Peirson, who has more than 20 years of experience in the design, servicing and administration of corporate retirement plans, was previously a senior internal sales consultant for Ascensus. Before joining Ascensus, Peirson was a client service representative with The Vanguard Group.

Rita Taylor-Rodriguez, regional sales director for The Standard’s south sales region, cites Peirson for her background in retirement plan design and administration, as well as her recent sales and marketing experience.

Peirson holds a bachelor’s of science degree in physical education studies from the University of Delaware and a master’s degree in business administration with a global perspective from Arcadia University. She holds the accredited retirement plan consultant (ARPC) designation from the Society of Professional Asset-Managers and Record Keepers (SPARK).

NEXT: HUB International Investment Services adds retirement plan specialist

Jasper Mallard has joined HUB International Investment Services as a retirement plan specialist in its Santa Barbara office.

Mallard will serve the tri-county area and be responsible for advising HUB’s current and future clients on investment and retirement services, including 401(k), 403(b) and other investment-related programs.

Before joining HUB, Mallard was an independent financial adviser and also worked at a real estate investment firm.

“We’re looking forward to making 2016 a great year with Jasper’s retirement planning expertise. I know our clients will be well served,” said HUB Certified Insurance Counselor Stan Darrow.

Mallard holds a bachelor’s degree in business administration with a concentration in finance from the University of San Diego. He holds his FINRA Series 7 and 66 registrations and is licensed as a California life agent, including long-term care insurance, variable contracts and annuities.

Investing January 8, 2016

SEC Liquidity Risk Efforts' Potential Effect on Retirement Plans

John Hollyer with Vanguard says investors have been well-served by mutual fund regulations so far, so the SEC’s new efforts will likely have a minimal effect on investors.
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The Securities and Exchange Commission (SEC) has proposed a set of reforms about open-end funds’ liquidity management programs.

The agency explains that it is proposing a new rule 22e–4 under the Investment Company Act, which would require mutual funds to establish liquidity risk management programs. Under the proposed rule, the principal components of a liquidity risk management program would include a fund’s classification and monitoring of each portfolio asset’s level of liquidity, as well as designation of a minimum amount of portfolio liquidity, which funds would tailor to their particular circumstances after consideration of a set of market-related factors established by the SEC.

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John Hollyer, global head of Vanguard’s Investment Risk Management Group in Malvern, Pennsylvania, explains that a fund’s liquidity is not just in cash, but also securities that can easily be converted to cash, such as commercial paper or government bonds. Under the SEC’s proposed rule, funds will have to describe what securities will make up the fund’s liquidity and how much of each security the fund will hold at a minimum.

Hollyer tells PLANSPONSOR that Vanguard is concerned that the security classification rules are much more restrictive than what is required currently. “The SEC is asking for much more accuracy than mutual funds can know, for example, how many days it will take to settle a specific bond,” he says. Vanguard has concerns that the selectivity of securities based on liquidity will differ among funds and it will affect the ability to compare asset managers.

In addition, Hollyer says these requirements will be complex and costly for mutual funds, while not giving the SEC more insight on the level of security risk. “They need to justify what is required is worth the expense and burden,” he states. Vanguard has expressed its concerns in a comment letter to the SEC, but Hollyer notes that Vanguard supports the SEC’s efforts to have funds establish a top-down board-approved liquidity management program.

NEXT: Will retirement plan sponsors and participants see any effect?

For plan sponsors, Hollyer notes, mutual funds have a very strong track record of managing risk and liquidity. “So you could argue that plan sponsors have been well-served by regulations so far, and depending on the final form of the new regulation, sponsors could benefit from knowing firms have higher standards for risk management,” he says.

“If mutual funds were less fully invested in the market because of liquidity requirements, that could be a detriment, particularly to long-term investors,” Hollyer adds. And, there could be the potential for increased costs passed to investors by mutual funds, but all this depends on the final form of the regulations after the SEC has considered comments.

In order to provide funds with an additional tool to mitigate potential dilution and to manage fund liquidity, the SEC proposed amendments to rule 22c–1 under the Investment Company Act to permit funds—except money market funds and exchange-traded funds (ETFs)—to use ‘‘swing pricing,’’ a process of adjusting the net asset value of a fund’s shares to pass on to purchasing or redeeming shareholders more of the costs associated with their trading activity.

Hollyer explains that this means when cash flows in or out rise above a certain threshold, the mutual fund could choose to adjust the cost of the fund that day to account for the number of investors who bought or sold on that day. Long-term investors, such as retirement plan participants, would benefit from this because they would not bear the cost of frequent traders.

Hollyer notes that in response to the global financial crisis there have been a variety of initiatives to improve the management of systemic risk across the nation’s financial system. In late 2015, the SEC mapped out a program of five things it would do in overseeing management of the mutual fund industry. The reason the SEC puts importance on liquidity risk management, is that mutual funds offer daily redemption as a feature. There has been a track record of more than 75 years of successful regulation, he says, but in response to the global financial crisis the SEC is making an effort to make sure risks are fully understood.

“I think the most important thing is to remember is that the mutual fund industry has benefitted from sound regulation and there really has not been a problem with having adequate liquidity. This represents an effort to go to a higher level,” Hollyer concludes.

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