Deals and People June 12, 2020

Retirement Industry People Moves

Sikich adds senior specialist to retirement plan services team; DWS announces changes to global business side; Penchecks elects new CEO; and more.

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Art by Subin Yang
Art by Subin Yang
Art by Subin Yang

Sikich Adds Senior Specialist to Retirement Plan Services Team

Marie Marks has recently joined Sikich as a senior specialist on the company’s retirement plan services team. Marks has spent the past 30 years advising businesses across industries about retirement plan options and strategy.

“Marie is a proven expert in the retirement plan services space who has earned the trust of business leaders in the Indianapolis market,” says Joe Connell, partner on Sikich’s wealth management team. “I’m confident in her ability to not only deliver strategic retirement plan guidance to our clients but also to spearhead our team’s growth in this market.”

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Marks has worked with the city of Indianapolis, former Mayor Greg Ballard and the Financial Planning Association to establish the city’s annual financial planning day. She was recognized as a top female adviser by the National Association of Plan Advisors. Prior to joining Sikich, Marks worked as a retirement plan adviser at The Wellington Group, HRD Advisory Group and the Strategic Planning Group.  

“Sikich’s entrepreneurial culture and commitment to client service aligns well with my own values,” Marks says. “The company’s broad scope of services and depth of expertise allow us to address clients’ full range of business challenges. I look forward to supporting the growth of the retirement plan services team.” 

Marks attended the University of Indianapolis and the College for Financial Planning.  

DWS Announces Changes to Global Business Side

DWS announced it is simplifying its global business structure.

The new organizational design is intended to enhance collaboration and remove silos so DWS can emphasize other responsibilities the business has as a fiduciary asset manager, including strong investment performance, client services and product innovation.

The company is shifting to a unified global Investment Division. The Client Coverage Division will be globally aligned, yet regionally suited; it will also focus on identifying and targeting client segments more effectively, according to DWS. The firm is also adding a Product Division team that will be fully responsible for the entire product lifecycle across the firm, and it is ensuring the business is efficiently supported with asset management specific controls and transparent financial and risk reporting. The control units will move to the Chief Operating Officer (COO) Division, while the risk function will move into the Chief Financial Officer (CFO) Division.

DWS’s new structure will come into full effect on July 1, following subsequent changes to the leadership composition. Asoka Woehrmann will continue as CEO and will lead the Executive Division. He will also represent the Asia-Pacific region on the executive board. Woehrmann will continue to be based in Frankfurt, Germany. Claire Peel will continue as CFO and will lead the CFO Division, incorporating the risk function. She will also have coordinating responsibilities for the entire business in Europe, the Middle East and Africa as regional head. She will be based in London. Mark Cullen will continue as COO and will lead the COO Division. Additionally, he will serve as regional head of Americas and CEO of DWS Americas. He will be based in the New York office and will also continue to spend time in London. Stefan Kreuzkamp will remain global chief investment officer (CIO) and will head the Investment Division, encompassing the entire investment platform across active, passive and alternatives. He will be based in Frankfurt. Dirk Goergen will lead the Client Coverage Division globally, consolidating all distribution teams of the firm into one. He will be based in Frankfurt. Manfred Bauer will join the executive board as head of the Product Division on July 1. He will be based in Frankfurt. Pierre Cherki, Bob Kendall and Nikolaus von Tippelskirch will all step down from the executive board and leave DWS.

In addition, DWS has formed a Global Leadership Team (GLT), which will be responsible for discussing growth opportunities for the firm and preparing for strategic decisionmaking by the executive board.

PenChecks Elects New CEO

 The Board of Directors for PenChecks Inc. has announced that company President Spiro G. Preovolos has been elected as the new CEO. 

Prior to his role as president, Preovolos held a variety of other senior management and leadership positions at the company over the past 18 years.

“Spiro has proved himself to be a highly capable manager and leader in every position he has held at PenChecks,” says board member Jeff Kukowski. “His broad experience in the business and in-depth knowledge of the retirement industry make him ideally suited to assume the mantle of CEO. The PenChecks Board is confident Spiro will continue the company’s growth and success even as the landscape becomes increasingly regulated and competitive.”

The company also announced the retirement of company co-founder and CEO Peter E. Preovolos. He will remain an active board member and become chairman emeritus.

OneAmerica Announces Latest Hires to Relationship Management

OneAmerica has announced new hires to its relationship management team.

The new hires, made at various points this year, will serve or be involved with clients in the $3M to $30M sized retirement plan category and are under the direction of Alan Blaskowski, Retirement Services (RS) relationship management leader.

“We were looking for proven professionals who understand how to bring a consultative approach to relationships and retirement plan advisors they are working with and feel good about how their industry experience aligns with our approach to client service,” says Blaskowski. “They are also seasoned to know how to succeed in this new hybrid virtual environment.”

OneAmerica has added Bob Blumberg as regional vice president, relationship management, east region. Blumberg comes to OneAmerica after 15 years with John Hancock, where he was divisional vice president, relationship management. Prior to that role he’d spent two years as a financial adviser at Prudential. Blumberg is based in Atlanta. 

Christa Fandrich will oversee the Southern California territory, and will be based in San Diego. was previously with ADP in retirement services for seven years as part of a financial services career that began in 2001. Previous roles before ADP were with Wells Fargo Advisors and UBS.

Stacey Hoffman oversees the Kansas City metropolitan area, Iowa, Nebraska and Kansas, and will be based in Overland Park. She was previously with Personal Financial Group/LPL Financial. She has more than 25 years of sales and marketing experience in the financial services and healthcare industries.

Kadrina Turner will manage the D.C. metro area, Maryland and Virginia, and will work out of Washington, D.C. She previously was at Nationwide Financial for four years. She has been in the financial services sector since 2003.

Compliance June 12, 2020

DOL Position on ESG Investing May Soon Shift (Again)

A forthcoming proposed regulation from the DOL is expected to address the topic of environmental, social and governance (ESG) themed investing in the context of tax-qualified retirement plans.

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The Department of Labor (DOL) grabbed headlines two weeks ago when it filed for review a draft regulation titled “Improving Investment Advice for Workers & Retirees Exemption” with the Office of Management and Budget (OMB).

The draft regulation had been expected for some time, and sources say it likely represents the DOL’s “new fiduciary rule,” and that the “exemption” referenced in the title of the rule will be related to the Regulation Best Interest (Reg BI) package currently being implemented by the U.S. Securities and Exchange Commission (SEC).

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Though it received less attention at the time, the DOL also filed another unrelated regulation, dubbed “Financial Factors in Selecting Plan Investments.” According to George Michael Gerstein, co-chair of the fiduciary governance group at Stradley Ronon Stevens & Young, it is likely that this regulation will address the topic of environmental, social and governance (ESG) themed investing in the context of tax-qualified retirement plans governed by the Employee Retirement Income Security Act (ERISA).

“You may recall that back in 2019, there was an executive order coming out of the Trump administration that ordered the DOL to examine whether it needed to modify some of its proxy voting guidance related to ESG issues,” Gerstein says. “That examination has been percolating for a while now, and it seems progress is being made. We can’t say for sure at this early stage, before we see the text of the new regulation, but it appears the rule will go beyond merely the issue of proxy voting. It may turn out to be this administration’s ‘interpretive bulletin’ that will formally establish its position on ESG investing and ESG-related proxy voting as a general matter under ERISA.”

Gerstein says it is hard to glean too much insight from the limited information that has been released by OMB. In his assessment, the title suggests the regulation will not be limited to a small technical issue.

“It’s hard to learn too much about a regulation just from the title, but the title in my view suggests it will be somewhat expansive,” Gerstein says. “Discussing ESG funds in plan lineups has been a significant part of my work these days. There has been a lot of confusion about how to think about ESG-themed funds and whether they are subject to fiduciary challenges.”

Taking a step back, Gerstein says that the topic of ESG investing by tax-qualified retirement plans has been something of a political hot potato in the United States. This is at least in part because ESG investing has been narrowly associated with the issues of climate change and collective bargaining, rather than being viewed as a broad set of tools or approaches that can help improve investment performance. The situation stands in clear contrast with Europe and other parts of the world, where asset owners and their stewards have enthusiastically embraced ESG principles in the construction of institutional portfolios.

“There has clearly been some volleying back and forth between the previous administrations about whether it is appropriate to allow tax-qualified retirement plans to address environmental or social issues while directing their investments, really going all the way back to the Clinton administration,” Gerstein says. “However, I actually think the back-and-forth is finally settling around some middle ground principles. The differences of opinions between the administrations have not been as significant as some have suggested—the disagreement is really about the edges.”

Simply put, there is agreement that it is fine to consider and address ESG factors that will have a clear and material impact on the performance of the portfolio. Where there is disagreement is about exactly how to determine materiality in this sense and how rigorous and/or frequent such an analysis ought to be conducted. Another tough question is what time frame to consider when analyzing materiality.

Gerstein adds that Congress isn’t in much of a position to help settle this matter because the ERISA statutes “do not seek to pick winners and losers in terms of the investment types or styles that can be used by tax-advantaged retirement plans.”

“The way ERISA is written, it seeks to prohibit conflicted transactions and to eliminate the chance that fiduciaries will put their self-interest ahead of plan participants,” Gerstein says. “Beyond that, it is really left to broad, common law principles of fiduciary duty and the ultimate primary regulator—i.e., the DOL—to allow ERISA to evolve with the times and to issue fitting guidance. I’m not sure there is anything Congress could do with the statutes that would lend more clarity to this issue.”

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