Deals & People June 3, 2022

Retirement Industry People Moves

Creative Planning acquires Ferris Capital; Envestnet strengthens its retirement solutions ecosystem with new acquisition; TIAA appoints chief institutional client officer; and more.

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Art by Subin Yang

Creative Planning Acquires Ferris Capital

Ferris Capital, LLC, which has $755 million in assets under management, has joined forces with Creative Planning LLC.

David M. Ferris, CEO and chief investment officer of Ferris Capital, created the wealth management firm to provide a top-of-the-line experience to his clients. The 10-year-old firm now has a team that manages generational wealth, succession planning, investment management, real estate, retirement planning, private equity and more.

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With its latest acquisition, Creative Planning manages or advises on over $225 billion in assets across all 50 states and 65 countries, with continued plans for growth throughout 2022.

Envestnet Strengthens Its Retirement Solutions Ecosystem With New Acquisition

Envestnet has announced its acquisition of 401kplans.com, a digital 401(k) retirement plan marketplace that streamlines retirement plan distribution and due diligence among financial advisers and third-party administrators.

“Envestnet’s acquisition of 401kplans.com reinforces our commitment to the retirement plan industry and follows the recent appointment of Sean Murray as head of retirement in November of 2021,” says Andrew Stavaridis, chief relationship officer of Envestnet. “401(k) plans remain the primary savings vehicle for 60 million American workers, yet advisers are often reluctant to incorporate them as part of their practices and holistic planning processes. By bringing 401kplans.com into our retirement offering, we can create a more seamless experience for advisers to shop, benchmark and screen investments for their retirement plan clients.”

401(k) plan sponsors have a fiduciary responsibility to ensure plan investments and fees charged to the plan are prudent and reasonable. With Envestnet’s retirement solutions marketplace, advisers can employ Envestnet’s outsourced 3(38) or 3(21) fiduciary services for investment selection and monitoring in retirement plan portfolios and can access essential information to make investment recommendations and understand the impact of fund changes to the total cost of their plans.

The 401kplans.com digital marketplace, available online and via mobile app, walks advisers through a documented due diligence process when considering plan providers. The platform enables advisers to eliminate manual proposal requests, quickly compare recordkeepers and evaluate investment options. It delivers instant pricing from most 401(k) providers thanks to direct integrations with more than 36 plan recordkeepers.

Founded by 28-year industry veteran Scott Buffington, 401kplans.com has nearly 28,000 advisers with accounts on the platform and working relationships with many of the largest broker/dealers. Through this acquisition, Buffington joins Envestnet as head of retirement sales, reporting to Sean Murray.

“What would typically take advisers several weeks to complete can now be accomplished in a matter of minutes with a couple of clicks on our digital platform,” Buffington says. He states that the offering “serves as a platform for all advisers—from retirement plan novices to industry veterans—to help them efficiently find the best providers, assess fees and select appropriate investments for their clients.”

Envestnet manages retirement asset data from more than 200,000 retirement plans. The 401kplans.com marketplace is a core component of Envestnet’s retirement services strategy to provide an innovative solution to its enterprise clients, and to become a major distribution channel for recordkeepers and investment managers.

“By combining data aggregation, fiduciary services and our digital marketplace, Envestnet will have the ability to aid home offices and advisers in finding appropriately priced retirement plans with suitable investment choices on an ongoing basis,” Stavaridis says.

TIAA Appoints Chief Institutional Client Officer

TIAA has announced the appointment of Kourtney Gibson as chief institutional client officer.

Gibson joins July 1 following the retirement of Doug Chittenden, a 38-year TIAA veteran. Most recently, Gibson was executive vice chairwoman of global investment services firm Loop Capital, where she served in a range of leadership roles. She will report to president and CEO Thasunda Brown Duckett and become a member of the company’s executive committee. Chittenden will serve as an adviser and vice chairman of institutional relationships until March 2023.

In her last role, Gibson was responsible for setting long-term strategy and aligning talent and other resources to deepen client relationships and deliver a wide array of solutions at the firm, which manages over $6 billion in assets on behalf of institutional clients and executes an average of $1.75 billion in daily trading in over 80 countries. Over more than 20 years at Loop Capital, she oversaw various corporate, governmental, institutional and consultant client relations and led multiple functions, including asset management, strategy, sales and trading.

Gibson also has firsthand experience with TIAA clients. She sits on the boards of trustees at the University of Miami, where she serves on the investment committee, and at Viterbo University, where she serves on the finance committee. She is also a director on the boards of Lululemon Athletica and MarketAxess Holdings.

Gibson holds an MBA from the Kellogg School of Management at Northwestern University and a Bachelor of Business Administration from the University of Miami. She is a board member of the Dibia DREAM Foundation, which provides STEM education for underserved youth, and a board member and immediate past chairwoman of the Chicago Scholars Foundation, the largest college access and success program in Chicago.

Wilshire Enhances Investment Capabilities with New Senior Vice President

Wilshire has announced the arrival of Julija Kod as senior vice president of the institutional client solutions team. In her role, Kod will be focused on Wilshire’s institutional defined contribution business and advising defined contribution plan sponsors, both public and corporate.

Prior to joining Wilshire, Kod spent over 10 years at Mercer, most recently as a senior investment consultant, providing investment consulting services to corporate retirement plans. Kod earned a Master of Science in finance and investment and a Bachelor of Science in economics and finance from the University of Bristol. She holds the chartered financial analyst designation.

Compliance June 2, 2022

Latest Social Security Solvency Update Sees 2035 Depletion Date

The combined asset reserves of the Old-Age and Survivors Insurance and Disability Trust Funds are projected to become depleted in 2035, which is one year later than projected last year.

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The Social Security Board of Trustees has released its annual report on the financial status of the Social Security Trust Funds.

According to the update, the combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds are projected to become depleted in 2035, one year later than projected last year. At that time, presuming no legislative changes are made, 80% of benefits would still be payable.

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Specifically, the OASI Trust Fund is projected to become depleted in 2034, one year later than last year’s estimate, with 77% of benefits payable at that time. On the other hand, the DI Trust Fund asset reserves are not currently projected to become depleted during the 75-year projection period.

In dollar figures, the asset reserves of the combined OASI and DI Trust Funds declined by $56 billion in 2021 to a total of $2.852 trillion. Moving forward, the total annual cost of the program is projected to exceed total annual income in 2022 and remain higher throughout the 75-year projection period.

As noted in the update report, total costs began to be higher than total income in 2021. Social Security’s costs have exceeded non-interest income since 2010.

“It is important to strengthen Social Security for future generations. The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually,” says Kilolo Kijakazi, acting commissioner of Social Security. “Social Security will continue to be a vital part of the lives of 66 million beneficiaries and 182 million workers and their families during 2022.”

Other highlights of the Trustees Report show total income, including interest, to the combined OASI and DI Trust Funds amounted to $1.088 trillion in 2021. This includes $980.6 billion from net payroll tax contributions, $37.6 billion from taxation of benefits and $70.1 billion in interest. Total expenditures from the combined OASI and DI Trust Funds amounted to nearly $1.145 trillion in 2021.

Social Security paid benefits of $1.133 trillion in calendar year 2021. There were about 65 million beneficiaries at the end of the calendar year.

The projected actuarial deficit over the 75-year long-range period is 3.42% of taxable payroll. This is lower than the 3.54% projected in last year’s report.

During 2021, an estimated 179 million people had earnings covered by Social Security and paid payroll taxes, and the cost of $6.5 billion to administer the Social Security program in 2021 was 0.6% percent of total expenditures.

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