Perhaps what is most remarkable about the changes that Rick Wedge, 2010 PLANSPONSOR Retirement Plan Adviser of the Year, has seen with his practice is that his firm had $300 million in assets under advisement (AUA) when he won the award. Today, Wedge, a managing director with Pensionmark, has $1 billion in AUA.
While Wedge continues to focus on plans in the small to mid-size market, including plans with as little as $1 million in assets, his practice has moved a bit up market to serve plans with as much as $30 million in assets. Wedge says he derives a great deal of satisfaction in working with smaller plans, where there is a lot of personal interaction and he feels he can make a real difference.
“When you work with a group of 60 to 80 employees, you find they often need our help,” Wedge says.
Referrals continue to drive the lion’s share of growth, he says. Wedge is also in the process of opening up an office in Scottsdale, Arizona.
As to how his service model has changed, Wedge notes that he joined forces with Pensionmark Retirement Group in 2012, creating Pensionmark San Francisco.
“We have really created a sophisticated fiduciary process, which has freed us up to work on the fun stuff, including financial wellness and helping participants to become more comfortable about their finances and their future,” Wedge reflects.
Wedge says an important tool that Pensionmark developed in 2018 is its advice product, SMARTmap. It is an interactive portal that asks users about all their financial goals, be it saving for a child’s education, a vacation home, travel or retirement. The program prioritizes these goals and develops a timeline and funding strategy for each goal. SMARTmap then creates what Pensionmark calls a “personal wealth blueprint” for each user that is updated daily on a personal website. Wedge says these types of tools can be very powerful in getting people on the right track.
Wedge says Pensionmark was among the first retirement advisory practices to provide participants with a holistic overview of their finances and “unbiased investment advice on their entire portfolio.”
“We do not sell any investment product and can put together a full-blown financial plan for every participant we serve,” Wedge says. “SMARTmap sets up our participants for success.”
Because Pensionmark now has nearly $50 billion in total assets under advisement, it can negotiate from a position of strength for clients with its strategic partners, Wedge says.
“In dealing with recordkeepers, we have a national accounts presence,” he explains. “We know who our relationship managers will be and don’t have to reinvent the wheel when we put a new plan in place. This enables us to do a better job of servicing our clients.”
Wedge says that in just the past 10 years alone, since winning the award, the retirement planning industry has dramatically changed.
“There used to be a lot more brokers with just a couple of plans,” he says. “Now, you see more specialists like us, and today, besides Pensionmark, there are three to four other national firms that do a good job in the small to mid-market. There still are wirehouses, but they are less prevalent, and today, retirement practices are offering more employee benefits beyond just retirement plans.”
Wedge says he is “very optimistic” about the future of the retirement plan industry and about what is ahead for Pensionmark. Wedge says an important driver of growth for Pensionmark is the 3(38) and 3(21) fiduciary services it offers and the competitive pricing it can achieve because of its scale. “Most clients are moving to 3(38) and new business is coming in there,” Wedge says.
And for all practices, he says, “I am very confident in the adviser’s role moving forward because there are fewer and fewer brokers and more committed advisers.”
Even though financial wellness has risen to the forefront of plan sponsors’ and participants’ minds in recent years, Wedge says he has “always thought it is the most important thing” a retirement plan adviser can offer.
“It is critical to help people put away enough money for all of their goals and allocate those funds properly,” he says.
Since the pandemic broke out and wreaked havoc on the markets, Wedge says he has been offering more group and one-on-one educational and advice meetings with participants. Most of his clients have adopted the relief provisions of the Coronavirus Aid, Relief and Economic Security (CARES) Act, he says, but, thankfully, few participants are “breaking the glass on their 401(k)s to withdraw funds, which we think is great.”
As for how Pensionmark’s 71 offices give back to their communities, Wedge says that every one of them does philanthropic work and that he, personally, helps centers that work with autistic children, in large part because he has an autistic son. Pensionmark has also successfully convinced all its clients to include environmental, social and governance (ESG) funds in their investment lineups, and they continue to perform well, Wedge notes.