Every year, advisers who sell or support employer-sponsored retirement plans gather in Orlando, Florida, for the PLANADVISER National Conference (PANC) for an info-packed three days. The conference is a great way for retirement plan advisers—including those at broker/dealers and registered investment advisers (RIAs)—to learn ways to win the business they are after and evolve their service model to remain competitive and profitable while continuing to serve plan sponsors and participants.
This year’s panels covered managed accounts, stable value investments, participant behavior, and the fiduciary investment advice industry, to name a few topics.
Grow that business. What’s the best way to expand? A quick poll of panel attendees found 71% depend on referrals from strategic partners or other professionals to grow their businesses, 20% rely on referrals from clients, and 10% use cold calling.
Jim O’Shaughnessy, managing partner at Sheridan Road Financial, says he sees the potential for disruption in the industry—from lawmakers’ view of the industry to new technology—as the impetus for growth. “We went from a broker/dealer model, to a 3(21) investment adviser model, to a 3(38) investment manager model,” he says. “I see a trend of working more with participants.” (Read more about opportunities for growth.)
What are the keys to profitability? The adviser’s value has changed, according to Daniel Peluse, director of corporate plan services at Wintrust Wealth Management. Nowadays, it’s more about how advisers drive better results and less about accumulation.
“Because of the new fiduciary rule, we expect advisers will decide to be either a wealth management adviser or a retirement plan adviser,” says Jonathan Blaze, regional retirement consultant at Thornburg Investment Management. (Read more about properly gauging services, time, effort and fees.)NEXT: How advisers fit into a changing retirement landscape
What is the adviser’s place in the DC landscape? Plan advisers are the linchpin in the constantly evolving retirement landscape, said Anne Lester, portfolio manager and head of retirement solutions, J.P. Morgan Asset Management.
From bettering outcomes to dealing with changing regulations, every decision will be easier to make, Lester said, every question easier to answer if the adviser asks: is what I’m doing going to increase the probability that someone will get to retirement safely? (Read more about the vital role of advisers in helping plan sponsors navigate the changing retirement landscape here.)
Deciding which fiduciary role to take on. The fiduciary investment advice industry is in a state of flux, and it looks like the number of 3(38) investment managers is set to grow, according to a panel of experts at the conference.
Craig A. Bitman, a partner at Morgan, Lewis & Bockius, explains there are all shades of grey between the three types of fiduciary service. Advisers should make sure plan sponsor clients align their plan document with a provider’s 3(16) contract and duties, because someone still named in the plan document can get dragged into a lawsuit. (Read more about fiduciary roles here.)
How will SEC actions impact retirement plan advisers? Andrea Ottomanelli Magovern, acting branch chief of the Division of Investment Management at the Securities and Exchange Commission (SEC), gave an overview of SEC money market fund reforms adopted in 2014.
Institutional investors, including retirement plans, are starting to discuss the reform’s implications, and advisers often lead the discussions, according to David N. Levine, a principal at Groom Law Group. (Read more about how advisers help plan sponsors review money marketfunds.)
The DOL’s fiduciary proposal. The DOL’s proposed fiduciary definition may restrict the types of information given to participants and the adviser’s compensation model will also be affected. Yet advisers may be more crucial than ever to participants' success. (Read more about how regulationcould make it more difficult to give advice at the participant level whenworking as a fiduciary to the plan.)
NEXT: Getting the best out of technology
Leverage technology. The point of technology is to support advisers in what they do best: help participants retire, says Christen Marsenison, vice president in client services and delivery, Envisage Systems.
Advisers are mulling how to use the many available resources to provide better service and remain profitable, says Anders Smith, senior vice president at Nuveen Investments. Questions include: How do I use this technology to provide better services for my plan sponsors? How can I be more profitable in terms of how I run my business? How do I get more out of each dollar coming in? (Read more about technology.)
How recordkeepers and advisers are a vital partnership. Senior retirement industry executives—one from an advisory and one from a recordkeeper—discuss how the two service providers can team for better plan sponsor outcomes. The recordkeeper is probably the most effective partner for an adviser, according to Joe Ready, executive vice president of Wells Fargo Institutional Retirement and Trust.
Working together improves outcomes and increases satisfaction from the plan sponsor, agrees Randy Long, managing principal at SageView Advisory Group, who says that winning a new advisory client often means converting them to a new recordkeeper. (Read more about therecordkeeper/adviser partnership here.)
Don’t overlook the lucrative micro plan market. “Plan sponsors with less than $20 million in assets under advisement are generalists with a lot of responsibilities, and they are strapped for time,” says Benjamin Lewis, senior managing director, direct plan market, at TIAA-CREF.
Plan sponsors of this size need efficient solutions, and they need help with the basics, reducing effort and risk, as well as providing service to their participants. (Read more about howto work with this market.)
How do you implement retirement income options? Most people are open to the idea of in-plan lifetime income options, but only about one in five DC plan sponsors say they’re interested in these features. More DOL guidance is unlikely, panelists say, and part of the low pick-up problem is regulatory in nature: most plan sponsors cite fears of fiduciary liability and uncertainty around how to pick and monitor annuity providers. (Read moreabout how to advocate for more DC plan income options.)