Defining Roles

Art by Giulia Sagramola

At times, a plan adviser shares responsibilities for servicing a client with the client’s recordkeeper. Managing Editor Judy Faust Hartnett checked in with three advisers about the recordkeeper’s role within their advisory service model.

	John Barry John Barry is a registered principal of JMB Wealth Management Inc./LPL Financial in Torrance, California.
	Joe Connell Joe Connell is a partner in Sikich Retirement Plan Services and part of Sikich’s wealth management team in Naperville, Illinois.
	Vince Morris Vince Morris is president of the retirement and wealth division, and a registered investment adviser, at OneDigital Investment Advisors in Leawood, Kansas.

PLANADVISER: How does your client service model vary from recordkeeper to recordkeeper? From client to client?

John Barry: We take a more active role in administration and plan design when the plan is using a bundled recordkeeper. We do have different service models depending on the size of the plan and the revenue it generates. For example, what we do for small companies vs. large companies is unlimited Zoom seminars instead of in-person meetings. We offer one in-person meeting annually for small plans; however, if they ask for a second one we never turn them down. For large-plan clients, we offer unlimited in-person seminars.

Joe Connell: Like John, we have tried to make our service model consistent across all of our clients, regardless of the provider. But we do have relationships with recordkeepers where the service levels are not as personalized [such as working with a designated daily account manager], and it’s more of a group serving the plans in the smaller end of the market. Here, we ensure that they work with our team by including us in all client communications so we can address any issues proactively for the client.

The only client-service-level differences occur when in-person committee meetings are on a quarterly or semi-annual basis. We’re required to be more active in education and communications for a client when it has several hundred or even thousands of employees, vs. a one-location client with fewer than 50. But our communications program makes all of our tools and resources available to each of them.

Vince Morris: Our client service model stays fairly consistent, too, but can vary from recordkeeper to recordkeeper based on what that provider’s relationship management team looks like, as well as the capabilities and services that are available.

For instance, as Joe said, if the recordkeeper has more of a relationship management team approach, and there’s not a dedicated relationship manager for the specific client, then we may be more involved with that client because it doesn’t have a primary point of contact at the recordkeeper to go to. On the flip side, other recordkeepers may have a dedicated relationship manager whom the client knows. This makes it a bit easier for the plan sponsor client to delineate roles.

For our clients, the agreements and the services we provide can create the greatest impact. Our services depend on whether we’re acting as a 3(21) fiduciary or a 3(38) fiduciary to the client and what boxes are checked from our full menu of services. At the end of the day, we cater to the needs of both the employers and the employees. Most clients want our full suite of services, everything from employee education to plan design consulting. However, some of our clients may want the full suite, plus additional programs such as our Advisor Managed Account offering and/or employee engagement/wellness offering. We can be flexible based on the client’s needs and adapt our service model accordingly.

PA: Have you, in the past, had any issues of role overlap or poor communication with recordkeepers or investment managers that have created conflict?

Connell: We make a point of knowing who the recordkeeper’s plan contacts are and creating communication guides for every plan so we know who is the daily contact, the relationship manager, the compliance person if they have one, the investment contacts. We want them to know our team and our roles, how we want to be involved, and the services we provide. This way, the recordkeeper contacts know when they need to communicate with us when they’re working with our client on service-related items. This system has eliminated conflict. When there has been an issue is when we take on a new plan relationship and we haven’t had a plan with that provider recently, and it may not know us and our model.

Morris: We haven’t had many conflicts with the recordkeepers or investment managers, and I believe the reason is the emphasis we’ve put on laying out the communication plan with the committee and other plan service providers ahead of time. There may be overlap, but we find that, when we have transparent communication at the outset of the client relationship, there’s much less conflict, and all roles are more defined.

PA: When you have investment committee meetings, what is the role of the recordkeeper or other service provider? When they participate, how does it affect the agenda?

Morris: We, as the consultants to the committee and the employees, will create the agenda. We decide where to slot the recordkeeper into that agenda. Generally, the recordkeeper will go over its plan review report, which includes plan demographics and asset-allocation data. It will gather all necessary information that can be pulled from its system and relay the specifics of the plan to the client. Consultants don’t own any portion of the recordkeeping experience or act as the custodian of any client assets, so we must rely on the recordkeeper to supply that information.

Barry: Typically, we don’t have the recordkeeper involved with any investment-committee-type meetings. But sometimes there’s no easy way to avoid it, and when that happens we just take care of the investment business at hand, before discussing recordkeeping matters. We try to keep them separate. In the past, too often recordkeepers would try to influence the fund menu with proprietary funds. This doesn’t happen much anymore. The recordkeeper should have no input with the fund menu.

Connell: This is an interesting change happening at the client level. There used to be recurring attendance of the recordkeeper at committee meetings, at least annually with most clients. With the recent changes to in-person meetings, we switched to Teams meetings where the client participates from its offices. The recordkeeping reporting is essential, and we work together to pull the data we need. But we can present it to the client without the provider in attendance. We also meet with providers and share the clients’ goals, and eliminate extra time the committee would spend in discussions. Instead, we present a plan of action based on a subset of the committee who really want to be involved in these discussions outside the committee meeting.

The meeting length and agenda can also be shortened by being virtual. Time seems to be a more precious commodity than ever, and if we can shorten a meeting by 30 minutes several times a year, we have seen committee members more willing to serve and be involved in their role and responsibilities.

PA: Do you have a set group of service people in your practice whom you use for all clients of one recordkeeper? If so, how does that make a difference?

Morris: We purposely have our entire team become familiar with all recordkeepers we have clients with. This lets us be more adaptable and versatile when clients come to us with various requests. We do have individuals on our staff who act as recordkeeper liaisons, such as our business development team. Occasionally, they’ll schedule meetings with the recordkeepers or investment partners so we can understand what new enhancements or capabilities those providers are rolling out.

Barry: We ideally like to have just one person at each recordkeeper who is our contact. I think things are most efficient that way. For example, over the past 25 years, a few times a recordkeeper went from having one individual who serviced us, to a team. Service levels plummeted. They eventually went back to the single-person point of contact. Often, we’re discussing Client A with the service person and, on the same phone call, we’re able to bring up items Client B needs addressed—this saves us all time.

Connell: We don’t assign certain relationship managers on our team to certain providers; we want all of our client relationship managers to be able to know all providers’ systems, websites and procedures so we can be extremely responsive to all client needs as quickly as possible. I think, with the merger mania and RIA [registered investment adviser] firms becoming extremely large and spread out, that this is a differentiator for our model, of staying more hands-on. And it allows providers to fully understand our service model and how we partner with them.