Deals and People December 14, 2018

Retirement Industry People Moves

Stadion adds marketing VP to Maine office; TRA acquires Tennessee TPA firm; Marketing strategist joins Custodia; and more.

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Stadion Adds Marketing VP to Maine Office

Stadion Money Management has appointed Lucy Pelsma as vice president, marketing.

Pelsma will focus on marketing strategy for Stadion’s independent recordkeepers and the development of outreach strategies for Stadion’s retirement solutions. She is based in Maine and reports to Holly MacMillan, chief marketing officer.

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“Through our recordkeeping partners, we’re seeing increased demand for our retirement managed accounts nationwide, which further highlights the need for partner specific marketing strategies,” MacMillan says.

Before joining Stadion, Pelsma served as principal, institutional product and marketing at Financial Engines, with responsibility for developing and managing key relationships with recordkeepers and financial advisers. She created and implemented marketing initiatives designed to generate new business activity. 

Pelsma has more than two decades of financial services experience, including a role with Bain Capital affiliate Sankaty Advisors as senior associate, investor relations. She also worked for Bank of New York Mellon as assistant portfolio manager. Pelsma received her bachelor’s degree in economics from Wheaton College and her master’s degree from Boston College.

TRA Acquires Tennessee TPA Firm

The Retirement Advantage Inc. (TRA) has acquired The Condon Company (TCC), a third-party administration (TPA) firm headquartered in Memphis, Tennessee.

With the acquisition of TCC on November 30, TRA now has retirement plan professionals in 32 states to support its national base of clients, financial advisers and recordkeeping partners with customized retirement plan design, administration, consulting and fiduciary solutions.

“We are excited about joining forces with TRA and leveraging their scale and diverse suite of products and services to offer our clients and partners,” says Mike Condon, president of TCC. “

TRA president Matt Schoneman says the move significantly expands the firm’s our geographic reach and creates new opportunity in Tennessee and the surrounding states.

“Over the past year TRA has successfully integrated Actuarial Consulting Services, Applied Plan Administrators and Markley Actuarial Services, making The Condon Company the fourth to join forces with us in 2018,” Schoneman adds. 

Former Marketing Strategist Joins Custodia

Custodia Financial has hired Aaron Tabela as chief marketing officer. In his new role, Tabela will be responsible for driving awareness of 401(k) loan defaults as a critical financial wellness and fiduciary challenge, while positioning RLE in the institutional retirement marketplace.

Tabela comes to Custodia from Financial Engines. As Financial Engines’ head of workplace marketing, he led a team of institutional and participant marketers that developed and executed the firm’s marketing strategy for employers, employees, retirement plan providers, consultants and advisers. Prior to Financial Engines, Tabela led marketing strategy for TIAA’s large plan market segment. 

In his new role, Tabela will work closely with fellow Financial Engines alumnus Rennie Worsfold, who joined Custodia Financial last April as executive vice president of distribution. 

Transamerica Hires Client Engagement Director for Midsize Plans

Craig Haase has joined Transamerica as director of client engagement for retirement plans.  He will report to M. Palmer Whitney, senior director of client engagement, workplace solutions.

Haase will oversee client management for midsize retirement plans and special markets, including multiple employer plans. Among his many duties, he will be focusing on plan sponsor client satisfaction, using customer feedback to identify new opportunities, and supporting Transamerica’s modernization initiatives.

With more than 20 years in the retirement plan industry, Haase brings extensive experience in developing, implementing, and improving retirement plans of all sizes. Haase earned his bachelor’s degree from the University of Connecticut.

Investment Consulting Firm Promotes Past Project Analyst

DeMarche has promoted Mark Andes to assistant portfolio manager of Discretionary Management Services (DMS), DeMarche’s discretionary OCIO affiliate. He will immediately join the existing team of portfolio managers.  The investment team is responsible for implementing client policies, ongoing manager due diligence and manager selection, tactical allocation, rebalancing, economic research and market outlook strategies. 

Andes joined DeMarche in 2005 as a project analyst. He has held a series of roles with increasing responsibility and has provided key leadership for the company’s research efforts. Currently, Andes serves as a member on both the traditional and alternative manager review committees, co-manager of investment manager research, and supervisor of project analysts. He has also led discretionary operations as DMS administrator since 2006.

Andes earned his bachelor’s degree in business administration from Southwest Baptist University and will sit for the Chartered Alternative Investment Analyst (CAIA) exam in early 2019.

Andes will continue in his account manager and consultant roles for those clients he already serves. His promotion does not change any current client’s service team or their responsibilities.

Ameritas Grows Retirement Plans Division with New Member

Chief Executive Officer JoAnn Martin has announced that Forrest Wilson has joined the retirement plans division of Ameritas.

In this role, Wilson will be responsible for leading sales and distribution for the division.

“Forrest will help the Ameritas retirement plans division achieve fast growth with an eye toward enhancing the client, adviser, and third-party administrator [TPA] experience,” says Jim Kais, Ameritas senior vice president, retirement plans.

Wilson’s experience includes service, operations, sales and management on both the platform and investment sides of the business.

Wilson earned a bachelor’s degree in marketing from Central Connecticut State University and a master’s degree in finance and economics from New York University’s Stern School of Business. He holds the FINRA Series 7, 24 and 63 securities licenses.

Lincoln Financial Group Names New General Counsel

Lincoln Financial Group has named Leon Roday executive vice president and general counsel.

In his new role, Roday will oversee all activities for the legal, compliance, government relations and corporate secretary functions of the company, as well as provide strategic counsel to the CEO, senior management team and board of directors. He will report directly to Dennis R. Glass, president and CEO, and will sit on the company’s senior management committee.

Most recently, Roday worked for Genworth Financial and GE Financial Assurance, where he served as general counsel, executive vice president and secretary to the board for nearly 20 years. Prior to that, he was a partner with LeBoeuf, Lamb, Greene and McCrae LLP. He began his legal career as an intern for both the Securities and Exchange Commission and the United States Attorney’s Office.

Roday earned his J.D. from Brooklyn Law School and a bachelor’s of arts from the University of California at Santa Barbara. He was a past chair of the Insurance Marketplace Standards Association, sat on the board of the Association of Life Insurance Counsel, and currently sits on the board of the Genworth Mortgage Insurance Corporation Canada.

Investing December 14, 2018

Another Fund Manager Forecast Urges Tempered Optimism

Charles Schwab’s 2019 forecast does not suggest long-term investors should rotate their portfolios away from risky assets, but investors should be more thoughtful about the growth assets they hold.

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Charles Schwab Investment Management this week published its annual equity and bond market outlook, which reminds investors that volatility is a normal part of investing—and that making emotion-driven trades is rarely a good strategy.  

“I have seen commentators saying we are already in a bear market, but I like to point out that it’s really hard to establish when a bull market becomes a bear market until you have the benefit of hindsight,” said Omar Aguilar, chief investment officer for equities, during a conference call introducing the new market projections. “What we can say with more confidence is that we are starting to go through a change in the business cycle. We’ve been in an incredibly long growth period, so I do believe that we have entered the phase where the U.S. economy will be decelerating through 2019.”

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But this is natural and by no means indicates a likely recession, Aguilar said. He pointed out that the U.S. economy recently saw a very strong peak of 4%-plus GDP growth for the second quarter of 2018.

“As we come down from that peak and the interest rate environment normalizes, next year we can expect 2% to 2.5% growth in GDP,” Aguilar said. “Take note, this is not a recession. It is simply a slowdown in growth. This point seems to be missed by a lot of people.”

According to Aguilar, one driver of lower growth is that interest rates are moving higher, which means lower liquidity for businesses, which can increase volatility in equities.

“The headline is that we are going into a natural deceleration period with respect to global economic growth,” Aguilar said. “Zooming in a little bit, this includes deceleration of the earnings cycle. What this does is put an emphasis on quality, versus the momentum market that we saw during the early parts of 2018. This is a very typical shift that we have seen before, and it brings higher volatility and higher interest rates.”

Aguilar said this forecast does not suggest investors should wholesale rotate their portfolios away from risky assets, “but investors should be more thoughtful about the growth assets they hold.”

Globally, Aguilar expects there will be challenges but also opportunity as well.

“The economy in Europe is more stable than what it was just a few years ago, even with concern about Brexit, so there may be more upside than even what we see in the U.S.,” Aguilar said. “The same applies to emerging markets, because we see attractive valuations and an expectation that the dollar may weaken in 2019. This would benefit emerging market performance.”

Aguilar concluded that there are strong reasons for optimism and that investors who are willing to stomach volatility in the next year could benefit.

“If you look at the economic data, it is still very strong,” he said. “Unemployment is as low as it can be, and investor sentiment remains pretty high. We’ve had record earnings in the last quarters, so it is a mystery to some extent why we are see questing of the bull market. Really the behavior of investors has changed in the second half of 2018—they are more afraid of risk—and this is leading the volatility, I think. It’s the fact that risk aversion has gone through the roof, which drives a flight to quality.”

As evidence of this, Aguilar pointed out that the stock markets, until relatively recently, did not react much to the tweets of the U.S. President.  

“As investors have grown jittery, we can now see clear spikes volatility coming on the back of the President’s threats and statements with respect to global trade and other issues,” Aguilar said. “Our suggestion for investors is to stick to your plan and remember your long-term objectives.”

Concerning the bond markets, Brett Wander, chief investment officer for fixed-income, said he also feels optimistic about 2019.

“We are getting a lot of client questions about uncertainty having to do with Brexit and the trade dispute with China,” Wander said. “Interestingly, these topics are dominating news headlines, but by and large, long-term interest rates have not really responded.”

Turning specifically to the question of rate hikes, Wander said the Fed is widely expected to raise rates again in 2018, “but this is actually not a done deal.”

“We’re less than a week away from the December meeting, and I would say this is the most uncertain call we’ve seen ahead of a meeting in some time, probably three years,” Wander said. “With the equity market volatility, it’s not as foregone a conclusion that they will raise rates again this year. The market is pricing in about a 75% chance of another rate hike in 2018.”

Still, for 2019, Wander expects the Fed is likely to raise rates, at least once or perhaps twice. Unless markets bounce back in a big way before year end, Wander said the Fed may back off from its recent pace of doing one rate hike per quarter.

“Regarding the yield curve, the conventional wisdom is that a flattening or inverted yield curve is a precursor to a recession,” Wander said. “But I really think we need to be hesitant about this story line. It’s not like the yield curve is a light switch for turning on a recession. If we see a slight inversion of the yield curve, it doesn’t mean much at all, especially given the confluence of technical factors that are influencing interest rates right now. It’s only when we get to a 50 basis point or a 100 basis point inversion that I think this yield curve-based recession argument makes sense. We are still just not in a normal interest rate environments.”

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