Products September 5, 2012

MassMutual: No Plans to Break What Works

When The Hartford announced it would be selling its retirement business, MassMutual perked up.
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“We were delighted when we heard The Hartford was going to be disposing of its retirement services business because it is so complementary to our business,” Elaine Sarsynski, executive vice president and head of MassMutual’s Retirement Services Division, told PLANADVISER.  

The Hartford will add small plans business to MassMutual’s typically mid- to large-market book of business. According to PLANSPONSOR’s 2012 Recordkeeping Survey, $29 billion of The Hartford’s recordkeeping assets are with plans of size $10 million and less, while MassMutual has nearly $35 billion in the $1 million to $200 million plan market. Both companies work with fully-bundled and third party administrator (TPA) service models and both are very adviser-centric, Sarsynski said. She noted that the combined business will move MassMutual from its current place at number 20 to number 11 in the industry, in terms of assets under management, serving more than three million participants, with $125 billion in assets under management.  

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Hugh O’Toole, senior vice president of sales and client management for MassMutual’s Retirement Services Division, noted that MassMutual was considering government markets as the next niche it would pursue for growth, and The Hartford’s existing 457 plan business complements that strategy. 

O’Toole said MassMutual does not envision that the company will “break” what is currently working for the companies and their adviser, plan sponsor and participant clients.   

The Hartford has a fully-operational recordkeeping platform that works well for its plans, and MassMutual’s proprietary platform works well for mid-market clients, he noted. For the foreseeable future, they will use both platforms, meaning that The Hartford’s current clients will not be forced into a platform conversion.

Staffing Needs  

Sarsynski added that the office locations for the two businesses are also complementary—both have plan administration offices in Connecticut and adviser-support offices in Boston. MassMutual is thrilled about acquiring The Hartford’s call center in Phoenix because it wanted a presence in that time zone, she said.  

For now, MassMutual plans to keep all locations. However, O’Toole said between now and the close of the transaction, company leaders will be working together to determine what is appropriate for the future.  

As for new business, O’Toole stated the two companies are legally required between signing and close to remain two separate competitors, so both organizations have been told to compete and serve employees well. Legally, advisers should not speak about the combined corporation before close and approval by regulators. O’Toole believes the market will understand that anything sold under The Hartford, after close, will be backed by full faith and credit of MassMutual.  

Sarsynski said they are calling the transaction a win to the fifth power because all constituents the companies work with will have enhanced products and services. Feedback from advisers, TPAs and sponsors has been very positive, she said.   

According to Sarsynski, employees are thrilled with the opportunities this offers, and communities in which the firms have a local presence will be well-served. 

Deals & People September 5, 2012

NAPFA Elects Locker as National Chair

Lauren Locker was elected national chairman of the National Association of Personal Financial Advisors (NAPFA) on August 31 to fill the recently vacated position.


 

 

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Locker brings years of regional and national board leadership to NAPFA’s top volunteer position, and will assume the chairmanship immediately. She succeeds Susan John, who stayed on when Ron Rhoades, who had been chair-elect, stepped down voluntarily last month because of a compliance error. (See “Compliance Registration Error Causes NAPFA Chair-Elect to Resign.”)

Locker founded Locker Financial Services LLC in Little Falls, New Jersey, in 1992. She became a Certified Financial Planner in 1994 and joined NAPFA in 1998. Her practice was established to work with middle-income individuals, especially women and non-traditional families. During her more than 20 years in the field, she’s seen a growing demand for financial services that focus on the aging and elderly population. To better understand and serve these clients, she became a Registered Financial Gerontologist (RFG) as well as a Certified Senior Advisor. She established a new division of her business, ElderLife, to work with aging adults.

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Locker is the immediate past-chair of NAPFA’s Northeast/Mid-Atlantic Board and has served on NAPFA’s National Board for the past two years. In her new role, she is committed to seeing NAPFA achieve its goal of becoming “the recognized and unquestioned leader in supporting the professional growth and business development of extraordinary financial advisers.”

Locker’s objectives will be to lead the board in its effort to sharply define and promote the NAPFA brand; provide NAPFA members with educational opportunities; and ensure that the organization’s fiduciary perspective is represented nationally.

Calling this a critical time for the organization and the industry, Locker said that the current debate regarding oversight and regulation gives NAPFA members an opportunity to bring their commitment to the fiduciary standard to the forefront. “Our members already pledge to employ full disclosure, transparency and accountability in every interaction with every client,” Locker said. “We can’t let uncertainty about regulatory issues cause us to lose that all-important focus. We need to forget about ‘business as usual’ and begin to think in terms of business as it should be to meet the needs of the public who have their eyes open and their expectations set high.”

 

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