BofA Merrill Lynch Rebrands 401(k) Adviser Unit

Advisers with substantial corporate plan expertise who also meet specific criteria, including a nomination and application, have a new title at Bank of America Merrill Lynch.

According to Matthew Card, a spokesman with Bank of America, the previous moniker, Defined Contribution Designation program, never really took off with plan sponsors. “It just didn’t seem to resonate,” he tells PLANADVISER. The firm surveyed its designated advisers and asked them to come up with a name that best articulates how they support institutional plans, and Retirement Benefit Consultants was chosen from a half-dozen or so names suggested by the 220 advisers in the division.

The number of advisers looking to specialize in the institutional retirement plan space has definitely swelled, says Joe Mrozek, head of corporate market business development and adviser programs for Bank of America Merrill Lynch. The designation was established in 2010 with an initial group of 135 advisers and has grown 25% over the last two years.

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“There’s more opportunity in the space,” Mrozek tells PLANADVISER, so it is not surprising to see more advisers looking to enter. He cites figures from the The Retirement Advisor University that show about 3,000 out of 300,000 registered representatives have more than $30 million in institutional retirement plan assets. Within the broader advisory industry, retirement plan advisers are a fairly small segment, Card says.

Most of the advisers work in teams, Mrozek says, which makes the transition to supporting institutional retirement plans more natural. “A very successful wealth management team or more family office types have a very institutional office model that plays well to institutional plans,” he says, noting the team structure, specific roles, and dedication to communication, education and ongoing client servicing.

Mrozek says the firm supports advisers with training, knowledge and materials that back up the investment products. “From our perspective, we know what the fee disclosure looks like, since we manufacture the products,” he says. “We have all the information readily available from our product team, so our advisers are well informed and well educated.” 

The program originally was designed to recognize advisers with significant experience serving employers’ retirement benefit plans—aligning advisers’ specialized expertise to these clients’ more sophisticated needs. Advisers must meet specific criteria, including experience working with corporate retirement plan clients, as well as product and technical expertise. Advisers must then complete a nomination and application process, in addition to interviews with a panel of leaders from across the firm.

More information about Retirement Benefit Consultants is available on the website of Bank of America Merrill Lynch.

FINRA Approves Mandatory Background Checks

The Financial Industry Regulatory Authority (FINRA) approved an amendment to its supervision rule that would require registered firms to conduct background checks on all registration applicants.

The supervision rule amendment was approved by the FINRA Board of Governors, but it still must be reviewed and accepted by the Securities and Exchange Commission (SEC) before taking effect. If approved by the SEC, the amendment would expand the obligations of FINRA member firms to check the background of applicants for registration, including first-time applications, as well as transfers, to verify the accuracy and completeness of the information contained in an applicant’s Form U4. Firms would also be required to adopt written procedures in this area that include searching public records.

Separately, FINRA also plans to perform an initial search of public financial records for all registered representatives. Additionally, FINRA will conduct a search of publicly available criminal records for all registered individuals who have not been fingerprinted within the last five years. Once these searches are completed, FINRA will conduct periodic reviews of public records to ascertain the accuracy and completeness of the information available to investors and regulators.

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FINRA says these efforts better position its auditors and regulators to assess member firm and registered individual compliance with reporting rules.

FINRA is also considering whether the additional data should be included in BrokerCheck, a free online service through which investors can conduct background checks on FINRA-registered firms and individuals. FINRA’s chief economist has initiated a study to see if there is a meaningful relationship between that data—which includes failed examinations—and broker misconduct.

Richard Ketchum, FINRA chairman and chief executive officer, says the rule change and revamped monitoring effort are important initiatives to improve the accuracy and totality of details reported on a registered individual’s Form U4.

Under the new rules, FINRA would also require firms to use publicly available records to verify that information such as criminal and bankruptcy records, civil litigations, judgments and liens are properly reported upon a registered individual’s application. FINRA encourages every investor to use BrokerCheck to research the background of individuals they are trusting to invest their money.

More information is available at www.finra.org.

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