Practice Management March 26, 2020

How to Run a Remote Advisory Firm

‘This is likely the moment we will become full-time remote and never go back,’ one adviser says. ‘The challenge will be maintaining camaraderie.’
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Art by Hayden Maynard

LHD Retirement’s Indianapolis office and Chepenik Financial are two retirement plan advisory practices that are permitting employees to work from home during the coronavirus pandemic.

LHD Indianapolis has instructed half its staff to work from home and will soon rotate those currently working in the office to home-based work. Those currently working from home will return to the office at that time, explains John Ludwig, a financial adviser with LHD.

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“We will see where we go from there,” he says.

Working from home is possible with employees using their laptops and accessing the company’s systems through a secured virtual private network (VPN), Ludwig says. To collaborate, LHD is using Microsoft Teams.

Prior to implementing this rotating strategy, LHD’s information technology (IT) team configured the staff’s phones so calls into the office are rerouted to employees’ cellphones—an obviously important step.

Chepenik Financial directed all its employees to work from home starting March 13, says Jason Chepenik, managing partner.

“This is likely the moment we will become remote and never go back,” he says. “It wasn’t a difficult decision to make. The only difficult aspect of it is maintaining camaraderie among my team.”

Chepenik Financial is holding meetings via Zoom, says Chepenik, who hopes it will be one way to maintain a sense of working together.

Cybersecurity Is Critical

As the adviser community transitions to remote-based work, cybersecurity and protecting sensitive information should be top of mind, says Cassandra Labbees, a member of the Employee Benefits and Executive Compensation Practice at law firm Epstein Becker Green.

“Employees’ Wi-Fi systems to connect to the internet should be private and password protected,” Labbees says. “Should their system go down, they should not access public Wi-Fi. Instead, they should contact their IT department for help.”

It is also important for the lines of communication between employees and managers to remain strong, so workers “feel that there is a network, that working from home is not so isolating,” Labbees says.

Reiko Feaver, a partner at Culhane Meadows, one of the largest cloud-based law firms in the country, says advisory practices should regularly remind their employees not to open suspicious emails that could contain malware.

“There are a lot of phishing emails being sent right now with the subject line ‘Coronavirus’ and posing as coming from legitimate sources,” Feaver says. The laptops that employees use should be password protected and lock after a period of time, be it one to five minutes, she adds.

Other Security Steps

If they are on the phone discussing confidential information, employees should even consider turning off smart assistant speakers or other cloud-based voice activation systems, Feaver says, and if a company decides to permit some employees to work from home, they need to permit all employees to do so.

“Otherwise, the policy could be viewed as discriminatory,” she says.

Scott Weighart, director of learning and development at Bates Communications, a leadership coaching and consulting firm whose clients include major recordkeepers, says video conferences are generally more effective than phone calls or emails.

“If you have a recurring biweekly staff meeting, try meeting via video conference every other session,” Weighart says. “Or, use video chat for your recurring one-on-one meetings. You’ll find that there is a different level of engagement and participation.”

Because connecting to a video conference can be cumbersome, make sure everyone logs on at least 10 minutes before the start time, he suggests.

If the meeting has 10 or more participants, one way to ensure they remain engaged is to use polls or chat boxes that allow them to weigh in with their thoughts, he says.

“Give the group reasons to be actively engaged,” Weighart adds. “Don’t speak for more than five minutes without opening it up for discussion to get others speaking.”

Practice Management March 24, 2020

Are You an Adviser or Consultant?

Think that distinction doesn’t matter? Just ask your service provider partners.
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Art by Woshibai


During a recent, wide-ranging discussion with PLANADVISER, Edmund Murphy III, president and CEO of Empower Retirement, said the advisory industry’s ongoing merger and acquisition (M&A) rush brings to mind a broader trend that has seen the traditional divisions between “advisers” and “consultants” seemingly break down.

Murphy said it may seem like a mere linguistic exercise whether a financial professional identifies as an “adviser” or “consultant”—and this is true in a sense when it comes to what financial professionals choose to call themselves. In fact, many firms use the terms more or less interchangeably, either based on their view of a given client or prospect or on the specific service level a client is considering. Similarly, clients will often misunderstand or entirely overlook the meaning of the two terms.

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What matters much more, Murphy explained, is how the financial professional’s service provider partners—the recordkeepers, asset managers, broker/dealers, etc.—classify them. In his experience, most service providers continue to draw a hard line between the advisory and consultancy communities. Practically speaking, this distinction has an effect on the pricing, service offerings and overall relationship that develops between a financial services firm and its business partners.

An Intermediated Marketplace

“Even in 2020, there is still not much uniformity from firm to firm in terms of how financial professionals’ strategic service partners look at the ‘intermediary’ market,” Murphy explained. “Oftentimes, when I’m in front of a group of intermediaries we would internally call ‘advisers focused on the smaller market,’ I will take the liberty of calling them ‘consultants,’ frankly because I think they like that term better in some cases, and we don’t necessarily feel a big need to differentiate them as an external thing.”

Internally, Murphy noted, the distinction matters very much.

“We do make a distinction between how we serve advisers or consultants, and it’s an important one,” Murphy said. “Being a consultant or an adviser, in our view, has to do with how the group is organized and what services and solutions they can bring to bear for their customer base. Consultants generally will be providing a more holistic service set, and our support services have to be cognizant of that. It’s not that one is receiving better services, they are just different.”

As a general rule of thumb, “consultants” in Empower’s view are typically working with larger and more sophisticated corporate clients, both on retirement planning issues but also on other payroll or benefits strategies. Notably, Murphy explained, a “401(k) consultant” or a “retirement plan consultant” will likely be drawing on other experts within a firm when it comes to helping their client address holistic benefits strategies.

“Advisers, on the other hand, have a more limited service set that is focused more squarely on the retirement plan or perhaps executive compensation,” Murphy said. “You generally wouldn’t see these ‘advisory’ firms being retained by a Boeing or an Apple to map out their overall benefit strategy. Advisers have some very large clients, to be sure, but the biggest companies still think about using ‘consultants’ for their benefits. And then, of course, there is the discussion about being an ‘investment consultant’ versus being an ‘administrative consultant.’”

Consultants vs. Advisers

Murphy noted another trend that has emerged in recent years that service providers such as Empower are tracking closely: the development of direct competition between firms that service providers would classify differently as consultants and advisers.

“Increasingly, we see there are some ‘consultants’ that will go down market and provide more limited services in an ‘adviser’ style capacity,” he said. “So, this discussion matters for registered investment advisers [RIAs] in their ongoing competition for new business.”

This trend is in fact reflected in the 2020 PLANSPONOR Plan Sponsor of the Year listings. In the same plan size category, there are plan sponsors served by the likes of NEPC, traditionally viewed as a consultancy style firm, and Cammack Retirement Group, which has been viewed more as an advisory firm. Murphy said it will become more common for “advisers” and “consultants” to find themselves competing for the same business, and each model will have its own appeals for potential clients.

Accelerating this trend is the entrance of the likes of HUB International and OneDigital into the retirement plan advisory business. Such developments are clearly aimed, among various other strategic goals, at giving well-established advisory firms the resources they need to provide more holistic services.

Indeed, in a conversation last year with PLANADVISER, Joe DeNoyior, who prior to HUB’s acquisition of his firm was CEO of Washington Financial, said the backing of HUB would allow his firm to deliver “a wider and more holistic scope of services—while enjoying a more efficient back-office process.” He said he and his colleagues chose HUB because they are focused on where plan sponsors are going from a total employee benefits approach. The convergence of health and wealth is here, he said.

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