Products August 22, 2019

Ladenburg Launches Turnkey 401(k) Solution for Smaller Businesses

It is a fully bundled 401(k) plan offering that incorporates a broad selection of investment products, as well as 3(38) fiduciary oversight.

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Ladenburg Thalmann Financial Services Inc. has launched Qui(k), a turnkey 401(k) solution designed to help small- and medium-size businesses more easily implement qualified retirement plans.

Qui(k) is a fully bundled 401(k) plan offering that incorporates a broad selection of investment products selected and monitored by Ladenburg Thalmann Assest Management, which serves as the 3(38) fiduciary for the plans associated with the platform.

Qui(k) is available to advisers across all of Ladenburg’s independent and brokerage subsidiaries. The turnkey administrative and recordkeeping functions that the platform offers include day-to-day administrative tasks, such as reviewing and approving employee loans and overseeing hardship distributions, qualified domestic relations orders, terminated employee distribution requests and terminated employee automatic threshold distributions.

“We are pleased to draw on our scale, experience and resources to further enhance our advisers’ ability to support the needs of their business owner clients with the Qui(k) platform,” says Paul Lofties, senior vice president of wealth management at Ladenburg. “For small- and medium-sized businesses, having a competitive qualified employee retirement plan is essential in hiring and retaining the personnel they need to grow.”

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The Markets August 22, 2019

Education Among Advisers About CITs Is Needed: Cerulli

While they have grown at a compound annual growth rate of 7.25% a year in the past five years, if advisers were better educated about them and if the transparency issue could be addressed, that growth could rise significantly, according to the research firm.

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According to a report by Cerulli Associates and the Coalition of Collective Investment Trusts, collective investment trust (CIT) assets stood at $3 trillion as of year-end 2018. For the five-year period ended by the end of last year, they grew at a compound annual growth rate of 7.25%. Had the market not fallen at the end of last year, that growth rate would have been higher.

CIT’s lower costs compared to mutual funds is the primary driver of their growth, the two organizations say. In recent years, defined contribution (DC) plans have accounted for the majority of flows to CIT products, forcing providers to increasingly question strategies for tapping the channel.

“More than 40% of CIT providers identify advisers’ lack of CIT knowledge as a top challenge to adoption in DC plans,” says James Tamposi, senior analyst at Cerulli. “This highlights that one of the biggest initiatives has been to increase education and awareness of the vehicle among plan sponsors, financial advisers and other industry participants.”

Another challenge that CITs face is their lack of transparency. “The lack of consistent, public reporting factors [has led to] DC plan sponsors’ reluctance to adopt the vehicle,” says Anna Fang, research analyst at Cerulli. “Almost half of providers surveyed noted that CITs’ lack of transparency relative to mutual funds threatens the vehicle’s adoption.”

However, that being said, Anya Krymkowski, associate director, retirement, Cerulli, says that knowledge about CITs among advisers who specialize in retirement plans, particularly those in the mid to large market, is quite high, and that CITs have been growing at a faster rate than mutual funds within retirement plans. Additionally, she says, advisers and plan sponsors can negotiate with CIT providers to receive more information on the trusts, thereby addressing the transparency issue. “CIT providers are issuing more information and doing so more frequently,” she notes. However, CIT providers are likely to be reticent to disclose how they negotiate fees, and the information reported for CITs is still less standardized than for mutual funds.

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