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2016 PLANSPONSOR Retirement Plan Adviser Small Team of the Year

The Catanella Institutional Consulting Team of UBS

The Catanella Institutional Consulting Team of UBS, Philadelphia, Pennsylvania

From left: Brian Catanella, vice president, wealth management, and Ken Catanella, managing director

Being proactive and providing customized and personalized solutions for clients is at the heart of the work of The Catanella Institutional Consulting Team of UBS. The team’s mission statement is “to provide our plan sponsor clients with a customized and service-driven model to deliver successful retirement outcomes for their participants, while effectively helping guide them through the ever-changing fiduciary landscape.”

This service-driven model has resulted in considerable client loyalty—some relationships spanning one or two decades—as well as an influx of numerous sponsor clients with a total of more than $800 million in assets in the past eight years, bringing total assets under advisement (AUA) for the practice to $2.3 billion today. This could be attributed, in part, to the fact that the team goes the extra mile. For one example, a client that is a large private equity firm, created a “carve-out” company. As that new organization launched and looked to create a retirement savings plan from the ground up, the Catanella team provided benchmarking, plan structure and committee assistance at no cost for six months.

This dedication to clients was also clear in 2008, in the team’s quick response to the deteriorating economy.

“In the midst of the 2008 financial crisis, when we knew our plan sponsor clients were being bombarded by hundreds of panicking plan participants, following the news of the fall of Lehman Brothers, our team proactively reached out to Mike Ryan, the chief investment officer [CIO] of UBS Wealth Management Americas, to lead a live market update call with full questions and answers for all of our client plan participants,” says Ken Catanella, managing director, wealth management, who runs the firm alongside his son, Brian Catanella. “Not only did this help those participants avoid making an emotion-based investment decision at the height of market volatility, but this helped to take a tremendous burden off the shoulders of our plan sponsor clients, which was equally important. After our call, they received far fewer participant questions and concerns.”

Another, more recent, example of how The Catanella Institutional Consulting Team determinedly gets in front of critical issues facing plan sponsors is its regular “share class optimization” analysis of each plan’s existing investment lineups. The retirement planning industry is facing a new era of stricter fiduciary scrutiny from the Department of Labor (DOL), along with the potential for litigable action, Ken Catanella notes. The team looks to see if the plan has crossed any thresholds to qualify for breakpoints in share classes or if there are ways to decrease the participant investment costs, he says.

“We then review every share class available for the fund, and, depending on how the plan fees are administered, we seek to explore and explain the options available to the plan. What we have found by providing this to clients is that, not only do we have a transcript of a detailed conversation surrounding the fees of the plan and how they are administered, but we are additionally able to deliver the most efficient fee model available that best fits their demographics and participant base,” he says.

As a co-fiduciary, the firm works with clients “to find options that are truly in the best interest of their participants over the long run, and these conversations usually lead to significant reductions in plan participants’ overall costs,” Ken Catanella adds.

Critical Plan Design
Getting participants retirement ready is the underlying goal of the team’s approach to plan design. The Catanella team members are big proponents of automatic enrollment, automatic escalation, stretch matches and both in-person group and one-on-one individual participant education. Catanella’s espousal of “auto” features is resonating with clients, as 90% of them use auto-enrollment, 60% use auto-escalation, and 20% have conducted a re-enrollment.

Giving sponsors an analysis of how their investment in their retirement plan can produce higher savings and retirement readiness scores has helped convince sponsors initially skeptical or reticent to embrace these features of their value, the team says.

However, resting on the laurels of automatic features is not enough, the team believes. It is also important to incentivize participants to increase their deferrals by stretching the match, says Brian Catanella, vice president, wealth management. For example, instead of offering a 50% match on a participant’s first 5% of contributions, change that to 25% of the first 10%, he says. “Our position is that we have to be more proactive with plan sponsors and their participants to get into the 10% to 15% savings bandwidth so that participants have a fighting chance of having enough saved for a successful retirement,” he says.

On-site participant seminars are part of the retirement readiness solution, and they need to be engaging, inspiring and candid, the father-and-son team believes. That means going beyond a simple replacement rate calculation and including projections for health care costs, they say. With such expenses rising about 6% a year and projections for a retiree’s health care needs estimated at $245,000 to $392,000, “we believe it is critically important to both deliver financial education and to discuss the ‘elephant in the room’—health care costs after retirement,” Ken Catanella says. “This is a significant wake-up call for our participant audience.”

To make it personal, he talks about how his own father’s lifetime savings were wiped out within five years of retiring, due to an illness his mother faced. “We feel strongly that it’s our responsibility to warn our participants by using real-life experiences and facts customized to the audience, and this model has been successful in our practice,” he says. Likewise, as the firm’s second generation, Brian Catanella speaks to younger participants about the importance of saving early for retirement in spite of other pressing financial needs, such as student debt, the desire to save for a mortgage or to begin contributing to a child’s education.

Other Differentiators
Another way that The Catanella Institutional Consulting Team of UBS says it differs from its competitors is the on-site due diligence meetings the team holds with investment managers it is planning to hire or that it has placed on a watch list. “We closely monitor the philosophy and process of our managers and feel even more confident in making recommendations to plan sponsors when we truly know the people behind it, as well,” Ken Catanella says.

In the past year, the firm has embraced technology as an additional way to communicate with participants, notably through webcasts, smart phone apps, Brainshark technology and investor psychology-based tools to enable participants to measure retirement income success. As Brian Catanella puts it, “We are excited to be a part of this transformational era of the 401(k) plan.”

BUSINESS AT A GLANCE

LOCATION: Philadelphia, Pennsylvania
PLAN ASSETS UNDER ADVISEMENT: $2.3 billion
MEDIAN PLAN SIZE (IN ASSETS): $55 million
TOTAL PLANS UNDER ADMINISTRATION: 28
TOTAL PARTICIPANTS IN PLANS SERVED: 28,140
SUPPORT STAFF: 2