Craig Reid, the head of Marsh McLennan Agency’s retirement and wealth practice, came to the 401(k) industry while working as a financial adviser at a bank in Kansas City, Missouri. Now he’s steering the subsidiary of insurance brokerage and benefits adviser Marsh McLennan in the opposite direction: leveraging its retirement plan advisement footprint to manage the wealth of C-suite executives.

MMA is relatively new to the retirement and wealth aggregator space. Its retirement practice has gathered momentum mostly in recent years, building from a few retirement practices to a nationally-run group of 200 employees serving 2,500 plans. Today, Reid and team are working to build out MMA’s wealth management capabilities to offer services to clients it’s already working with on workplace retirement plans.

“It’s just a huge opportunity,” Reid says. “We are sitting on [both] retirement and wealth business if we just cross-sell our existing business, even at a marginal rate.”

Aggregators and RIAs with workplace retirement practices have been rapidly acquiring in recent years, and experts see no sign of that trend slowing. For MMA, it’s not just about scale, but adding wealth advisers with the platform and expertise to provide white glove service at scale, according to Reid.

“It’s a new endeavor for us and we understand that it’s a riskier component of the business outside the institutional framework, and we want to make sure we do it right,” he says.

The goal, Reid emphasizes, is not to serve the broad base of retirement plan participants. That is better done through digital platforms and access to MMA financial professionals when participants are experiencing life moments or are in need of help. The target group for the wealth division is those with about $5 million or more in assets.

“If a C-level executive wants to talk to somebody … they want to do that in person,” Reid says. “So having a distribution force across the country is critical from the wealth manager’s chair. I think you can centralize the planning function, but the engagement from the end client is face-to-face.”

At the 2023 PLANADVISER National Conference, a mergers and acquisitions specialist from consultancy MarshBerry noted the business case for retirement plan advisers to consider C-suite financial services.

“Ultimately, especially if you’re in wealth management, you really care about the ultra-high-net-worth [clients],” Rob Madore, a Marshberry vice president, told the audience of advisers in Scottsdale, Arizona. “You provide a flat fee consulting to executives within a company, and that can be very significant … depending on the plan you’re working with and the kind of service that you’re providing. That’s probably the lowest-hanging fruit.”

All About Relationships

The model of cross-selling among divisions is already working well for Reid’s team at MMA. A good amount of retirement plan clients come from the wider firm’s relationships, he notes.

Reid also acknowledges the various competitors already on this path connecting retirement and wealth management. But he continues to see growth across both.

“In the industry at large, we [the aggregators] are not tripping over each other yet,” Reid says. “There are still a lot of generalists in the marketplace [that they can replace].”

Reid believes that, as the aggregator model matures, advisers and wealth managers will be questioning their employer relationships. He believes showing advisers lead generation opportunities from the aggregator model will be key to keeping talent. If a firm fails to do that, he says, employees may look elsewhere.

“It has to be a culture of cross-sell,” Reid says. “It’s not anything that’s demanded, but it has to be something that is constantly discussed and brought to the forefront, encouraged and nurtured.”

401(k) Connection

The once-regional banker first came to the retirement plan industry via a colleague who specialized in 401(k) plans.

“He said, ‘You know, I’m looking for somebody to take over the plan side of the business, and you fit all my criteria. I’d love to teach you the business,’” Reid says.

Reid remembers putting together a presentation on 404(c) requirements for self-directed participant 401(k) plans about two weeks after he started. His compliance team, he says, was not impressed.

“I had a lot to learn on the plan side,” he says. “But I think you have to be a student of the game for whatever you are focused on. … So I dove in feet first.”

Reid began at MMA as one of a handful of retirement plan advisers. The various teams would have meetings about building out a national retirement plan practice, but when it was clear more focus was needed to make it happen, Reid approached leadership with a strategy. In 2019, less than two years on the job, he took the role of national practice head.

According to Reid, a big part of his job has been bringing in strong experts. He notes that the firm recently hired Heather Taylor, formerly of Principal Financial Group, to help bolster its nonqualified deferred compensation offerings. In 2021, the firm brought on Compass Financial Partners as an affiliate, founded and run by plan advisers Kathleen Kelly and George Hoyle.

In addition to its back office team with legal, compliance and operations, the division now has a front office team, including marketing, technology, and business operations.

“Where I think we’re going to shine is that we have these two very different clients,” Reid says. “We have C-suite business owners who have complex financial lives that we are building the adviser white-glove services for, and then you have mass America, the employees. But when you’re working with a business owner, to earn the right to work with his or her wealth, you have to prove that you can support the needs of their employee base.”