2020 Will Be Another Year of Adviser Philanthropy

The editorial team of PLANADVISER was blown away by the generosity of advisers recognized in our 2019 Advisers Giving Back program, and we’re already working on new stories of giving for 2020.

Art by Alex Eben Meyer


Are you an adviser who gives back to the local, regional or global community? Do you know of such a firm? Perhaps they provide funding to international human rights initiatives, or maybe they allow staff to donate their working time at the local food bank.

However retirement plan advisers are giving back, we want to hear about them for our 2020 Advisers Giving Back program. Like the inaugural 2019 edition of the program, each month, on PLANADVISER’s website, we’ll roll out profiles of advisers or advisory practices that have undertaken some philanthropic endeavor. It might be a local community service event, or it might be an outreach with a global footprint. It could also be volunteering or fundraising—we won’t restrict recognition to only social action.

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Besides to highlight the good being done by retirement plan advisers and to attract a new generation, we hope these stories will help those of you who have yet to figure out the role of corporate responsibility or philanthropy in your practice. We hope they’ll give you insights for embracing such initiatives in your culture.

If anyone needs another reason to try philanthropy: A recent analysis of 350,000 surveys taken by organizations certified by Great Place to Work found a connection between organizational giving and employee behaviors. Employees who said their employers made a positive impact in the world were more likely to give extra to get the work done, stay with an organization for the long haul, and look forward to coming to work. All things employers appreciate.

Need some inspiration for ways to give back in 2020? Look no further than our 2019 profiles, which tell impressive and encouraging stories of dedicated advisers and their staff.

A Nationwide Network of Giving – In 2016, when CBIZ was celebrating its 20th anniversary, the firm decided to give its employees the opportunity to volunteer in their local communities for up to a total of 20,000 hours. It was so successful and was met with such employee enthusiasm that CBIZ decided to make “CBIZ Cares” an ongoing program as part of its community involvement initiatives. Today, the wealth advisory, accounting and insurance company’s 100 offices around the nation each decide what causes to volunteer for, and nationally, the firm runs a National Food Drive and Dress for Success. 

A Culture of Compassion – Ever since Innovest Portfolio Solutions was founded in 1996, the practice has encouraged its employees to volunteer in the local community. Today, the Denver-based firm has a charitable donations committee that selects the 12 activities Innovest engages in every year. Last year, the firm’s 50 employees volunteered a total of 12,010 hours of their time, indicating just how much this has become part of the Innovest culture.

When People Need a Head Start – After learning about the work of Head Start, George P. Fraser decided to provide financial education to parents of students in the program and build a scholarship fund for the teachers employed there. “You can do good and still do good business,” he says. 

A Foundation That Spans the World – Since its founding in 2011, the SageView Foundation has raised more than $1.5 million to help meet the health care and education needs of women and children in crisis and to provide community development micro-loans. Much of the Foundation’s work to date is focused on Rwanda. 

Teaching Financial Literacy – Barbara Delaney, a principal at StoneStreet Renaissance LLC, teaches high school girls how to handle money. The girls have expressed great interest in what she does as a retirement plan adviser, so she explains how StoneStreet Renaissance, headquartered in Pearl River, New York, helps participants plan for their future.

2019—the Year of Mergers and Acquisitions

Wells Fargo, PSC, Aspire, Charles Schwab, Hub International, CAPTRUST and many other firms have been involved in significant merger and acquisition activity this year.

Paul Sommerstad, a partner at Cerity Partners who joined the firm through its acquisition of Blue Prairie Group back in April, says accelerated merger and acquisition (M&A) activity was an important retirement plan industry trend in 2019.

“To put it simply, consolidation is a fact of where we are at in the economic cycle,” Sommerstad says. “M&A activity is very prevalent both within our industry and among the client base we serve.”

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At Cerity Partners, in addition to its own M&A activity, the firm has helped multiple health care clients join larger networks in 2019.

“We have clients on both ends of M&A activity, as many advisory firms probably do. We have clients that are being acquired and we have clients that are making acquisitions,” Sommerstad explains. “I’ll be on the phone with a client of ours today that has a 1/1/2020 plan acquisition, and they have another one already lined up for 1/1/2021.”

In all industries, mergers and acquisitions are near all-time highs, Sommerstad adds.

“That’s part of why you hear this figure that there are only about half as many publically traded stocks available today versus several decades ago,” he says. “On the flip side, the number of private equity firms has ballooned from a few hundred to 8,000-plus in that time period. As advisers, it’s in our wheelhouse to help with these M&A processes. Our skillset can be very valuable, especially on the defined benefit [DB] side of things. A poorly funded DB plan that is not understood by the acquiring entity can turn into a real headache down the line.”

M&A Among Advisers  

While advisory firms’ clients are facing their own consolidation pressures, the registered investment adviser (RIA) and independent broker/dealer industries are in the eye of the M&A storm. According to Fidelity’s latest Wealth Management M&A Transaction Report, the pressure for financial services firms to scale and the pervasiveness of prepared buyers who hold significant capital in a low interest rate environment continues to fuel record transaction activity.

“For RIAs, this tension is intensified by rising valuations and a lack of succession planning in some firms,” the report says. “Ten RIA transactions representing $20 billion in AUM were announced in November, up slightly in AUM from the ten transactions totaling $17.0B in November 2018.”

Through the first 11 months of 2019, Fidelity reports, there have been more than 115 registered investment adviser (RIA) transactions, up 36% over the same time period in 2018 and representing $146 billion in AUM, which is up 34% over 2018. Year-to-date, there have been 11 independent broker/dealer transactions, representing $628.7 billion in assets, up significantly from 2018, which had eight transactions representing $453 billion.

Regular readers of PLANADVISER will recall several different buying sprees executed during 2019, with perhaps the most prevalent coming on the part of Hub International. The firm started its acquisition activity back in January, when it announced the acquisition of Sheridan Road Financial. The buying continued in September, when Hub announced in rapid succession six acquisitions of firms that were part of Global Retirement Partners (GRP). This round of acquisitions brought on board  EPIC Retirement ServicesStoneStreetWashington FinancialPerennial Pension & WealthWhartonHill and Inter-Mountain Retirement Partners (MRP). Just last month, the global insurance firm continued to grow its stable of retirement plan specialists with the addition of two New York-based advisers.

Also in November, Advisor Group and Ladenburg Thalmann announced a plan to merge, a move that will bring together more than 11,000 financial advisers and $450 billion in client assets.

Earlier in the year, CAPTRUST grabbed headlines for its own serial acquisition activity based on the premise of bringing together retirement planning and wealth management expertise under the same roof.

M&A Among Recordkeepers and Asset Managers

In addition to RIA consolidation, 2019 also delivered several significant acquisitions among recordkeepers and asset managers.

In April, Principal Financial Group announced a definitive agreement with Wells Fargo & Company to acquire its Institutional Retirement & Trust business, a deal which was finalized in the third quarter. Through the acquisition, Principal effectively doubled the size of its U.S. retirement business, while bringing on institutional trust and custody offerings for the non-retirement market and expanding its discretionary asset management footprint.

Last month, the Charles Schwab Corporation and TD Ameritrade Holding Corporation announced their entrance into a definitive agreement for Schwab to acquire TD Ameritrade in an all-stock transaction. According to the firms’ leadership, the transaction will create significant strategic benefits for the combined organization and is expected to deliver attractive returns for the owners of both companies.

Specifically, the acquisition will add to Schwab approximately 12 million client accounts, $1.3 trillion in client assets, and approximately $5 billion in annual revenue. This added scale is expected to result in lower operating expenses as a percentage of client assets and to help fund enhanced client experience capabilities in the future. The resulting combined firm is expected to serve 24 million client accounts with more than $5 trillion in client assets.

In August, it was revealed that PCS and Aspire, both founded nearly two decades ago with the common goal of providing specialized services to investment fiduciaries, would join together to achieve the benefits of scale in an increasingly competitive marketplace. The combined entity will be a 300-person organization focused on providing conflict-free recordkeeping services to 16,000 plans and 750,000 eligible participants, representing more than $23 billion in assets under administration. Together, PCS and Aspire will serve thousands of financial advisers, strategists and third-party administrators (TPAs) across the United States.

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