2010 PLANSPONSOR Retirement Plan Adviser Team of the Year

The Prince Group (Indianapolis, Indiana)

The Prince Group was founded in 1998 and experienced rapid growth in its early years as the company tried to establish itself and develop a client base. That growth paid off and has now slowed–in the last two years, the team has turned away more potential clients than it has brought on, Douglas Prince says, because they want to ensure its members can effectively take care of the clients they have, The Prince Group is now focused on managed growth, process efficiency, and attracting the team’s model client. “We have changed from a sales focused organization to asking ‘how can we be the best at what we do and do it the most efficiently?’” Douglas Prince notes. However, clients still are coming on board, with the company adding 12 clients between late 2008 and early 2010 as a result of referrals.

The team has seven members (Prince, Brea Dantin, Deana Harmon, Jillian Grimm, Joe Copeland, Ben Donathen, Sue Platt): three senior team members (Prince, Dantin, and Harmon), an adviser who has family clients, an administrative assistant, two professionals who have some direct client work, and a permanent intern. Prince began his career as a CPA working with nonqualified and employee benefit plans, including qualified plans. He then went to McDonald Investments where he helped to build its retirement effort before he decided to strike out on his own and found The Prince Group. Dantin was brought in shortly thereafter and Harmon, with an MBA and background working in HR at a public accounting firm, joined about five years ago.

“By managing growth, we can devote time to creating new services that prepare our clients for issues, trends and legislation coming down the pike. Also, we are able to focus on producing our on-going service deliverables in the most efficient manner,” Prince explains. “Anything we touch more than once, we try to automate,” he notes. The team is so committed to efficiency that it even has engaged the services of a process engineer and has a programmer on contract.

Most of the team’s clients are within a two- to three-hour drive from their office in Indianapolis, Prince says. This allows for more face-to-face time, according to Dantin, which in turn leads to stronger relationships. Further, Prince says, it is the face-to-face time that generates conversations about what is happening at the company, which often leads to initiatives affecting the design and communication of the retirement plan.

“Our services continue to evolve as we improve our internal technology,” Prince explains, and each year the group adds items to its standard service model. The Prince Group’s ongoing service model incorporates a very personal level of involvement; “For each new client, we put the investment committee members through a fiduciary education process and meet individually with each committee member to conduct an investment risk assessment that gets rolled up to the committee level. This helps identify a risk tolerance that is used in the selection of investment option for the plan. We then help the committee to document their duties through an investment committee charter that gets approved at the board level. We help the committee to understand the risk and return of various investment categories—including target-date funds—that will be used to help identify which investment categories will be offered to participants. Then, the fund search process begins. We help to identify if the fee and expense structure and the services offered by the current vendor are competitive with the marketplace. We help the plan sponsors with implementing any changes from the above.”

Of The Prince Group’s clients, all with plan assets of more than $10,000,000 are fee-based but the company is in the process of moving all of its smaller clients out of the commission market into a fee-based model. Clients also receive fee disclosure information twice per year, Prince says. One time is as part of the total fee and expense review and the second time is when the client completes an evaluation form about the advisory group’s services. “We have been doing this for several years so that the clients know how much we get paid and where it comes from. We want the client to have full transparency of our fees,” Prince explains.

The Prince Group has “automated the review process for target-date funds that compares the client’s target-date fund glide path to all of the funds in the universe. We also automated the review process for the underlying funds inside the target-date portfolios so that the underlying funds are run through the same screening criteria that the other funds in the core lineup are reviewed against,” Prince says. “Several years ago we developed a report that helps identify which participants are not diversified enough. We then used this report to target these participants, with the help of the plan sponsor, for one-on-one meetings. After this market meltdown, the plan sponsors have thanked us for doing this several years ago.”

The company is able to download participant investment data and look down to the participant level to see who is investing outside of the normal range for a particular age. Another initiative that Prince Group members have done around participants and investing relates to fixed income. “Based upon some recent studies about participant behavior and analysis of the census of employees in our retirement plans, we have worked with our clients to expand the fixed-income menu, to help the employees that we anticipate will become less aggressive, to allow for better diversification among fixed-income investments.”

“The foundation of our team is that we are a fiduciary,” Prince explains. “We have to act in the best interest of participants. This is what the market demands and needs.” The Prince Group has developed its own internal fiduciary monitoring system that helps its members review the investments and other plan betterment items. Outside of the normal quarterly investment review process, Prince says the Group has identified 20 different items that the committee should review in detail at least once per year, and publishes an annual calendar of what items will be reviewed and when. Each committee meeting includes about 75% of time spent on the noninvestment items helping the committee to fulfill and establish the fiduciary goals and objectives, measuring where they came from and what will be the priorities for the upcoming year.