December 19, 2011
--- Russell Investment’s Retirement Plan Architecture System takes a three-pronged approach to retirement plans: selling, implementing and servicing plans. ---
Speaking with PLANADVISER about the new system, Ben Jones, director, defined contribution for Russell’s DCIO adviser-sold business, said that the system is primarily designed for wealth managers who want to expand their defined contribution (DC) business. However, it addresses challenges faced by plan sponsors and participants as well.
Jones said that when Russell set out to develop this system, the first step was to identify challenges faced by each of these three stakeholders. The most important stakeholder is the participants, he said. Too often they are paralyzed by choice, they aren’t investing in a disciplined manner and they are not saving enough.
Smaller businesses – which are considered to be the best market for advisers looking to gain more plans – are challenged by the size of the task versus the size of their staff. Typically, the business owner is also doing H.R. and potentially sponsoring the plan and it becomes too much of an administrative burden. Because this person is wearing so many different hats, it’s difficult for them to sufficiently manage their fiduciary risks, and they need help making sure they have a prudent process in place.
The most common challenge for advisers in this market is essentially being able to deliver on the value they say they can bring to a plan sponsor. “They need to be able to deliver and explain the value of the fees they charge. It’s about execution,” said Jones.