Products July 17, 2013

JHFN Creates Broker/Dealer Brand

John Hancock Financial Network said it would market itself to advisers using the name Signator Investors Inc.
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The move was made to separate the division that creates investment products from the distribution unit and to strengthen the commitment to expanding its independent broker/dealer. Signator is allowing its advisers to brand using John Hancock Financial Network, or any unique doing-business-as. Since John Hancock continues to carry weight with consumers, the name will still be used.

One differentiator for the firm’s independent broker/dealers is the array of technology platforms and professional development resources, said Brian Heapps, president of John Hancock Financial Network. Signator will offer an open product platform, including a range of investment, advisory and protection products from a number of providers, while supporting the adviser’s autonomy and independent brand.

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As the firm has transitioned to independence, John Hancock Financial Network has seen its sales grow and shift toward wealth product sales.

“The transition, increased sales, and growth are providing us the scale necessary for further expansion,” Heapps said. In June Symetra Investment Services, Inc., a dual registered broker/dealer with approximately 280 independent representatives, agreed to be acquired by John Hancock Financial Network. Signator currently has about 1,600 advisers and representatives across the U.S.

As of July 17, John Hancock Financial Network’s adviser website and related marketing materials will carry the following brand: Signator Investors Inc., powered by John Hancock Financial Network.

Compliance July 17, 2013

GAO Shares Findings with HELP Committee

The Senate Committee on Health, Education, Labor and Pensions (HELP) heard some findings about small businesses and retirement security.
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In a testimony, Charles A. Jeszeck, director of education, work force and income security at the Government Accountability Office (GAO), told lawmakers a March 2012 GAO report (see “GAO Recommends Retirement Plan Outreach for Small Employers”) found many of the small employers who were contacted said they felt overwhelmed by the number of plan options, plan administration requirements and fiduciary responsibilities for setting up and maintaining a retirement plan for employees. Some small employers found it challenging to select investment funds for their plans, and some cited a lack of financial resources, time and personnel as challenges to sponsoring a plan.

Jeszeck also noted that participants in small plans often pay higher recordkeeping and investment management fees than participants in larger plans. He told lawmakers multiple employer plan (MEP) representatives have suggested MEPs as a viable way for small employers to reduce the administrative and fiduciary responsibilities that come with sponsoring a pension plan, as well as to reduce costs, in part through asset pooling.

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However, the GAO found that these advantages are not always unique to MEPs. There was also no consensus on the potential for MEPs to increase plan coverage. During the GAO’s September 2012 study (see “GAO Explores Use of MEPs”), the Department of Labor (DOL) ruled that some MEPs made up of otherwise unrelated employers did not constitute a single pension plan but an arrangement under which each employer sponsored a separate plan for its own employees. 

“Because this raises significant policy and compliance questions and data are limited, it is important that Labor gather information on participating employers to inform policy and oversight activities on retirement security for employees of small businesses,” Jeszeck said, according to a report of his testimony.

The report is here.

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