2016 RPAY – The Beacon Group at Morgan Stanley

PLANADVISER: Tell us about your practice and how you and your team members got into advising retirement plans.
The Beacon Group: Our practice is primarily focused on advising retirement plans. Our senior-most partner ran a third-party administration (TPA) firm for 25 years, prior to moving to a wealth management firm in 1991 and founding the team. From the beginning, serving the needs of retirement plans was the primary focus of the team. Each member of the team has pursued extensive education and credentials to provide expert service to our retirement plan clients.

PA: What is your mission statement?
BG:
To empower participants with the tools, resources, and appropriate investment options to retire with respect and dignity on their own terms.

PA: How is your team/process/structure unique? How has it evolved?
BG:
The most unique part of our business process is our approach to participant education. We believe there is a large gap in what the retirement industry believes/surveys and what actually is occurring in plans, at the very least with participants who join our clients’ plans. We believe the basic financial knowledge gap is greater than what is stated. We have utilized behavioral finance in our presentations to help participants better understand how they can impact their retirement picture.

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The process starts with enrollment meetings where we will review the basics of the plan and the importance of saving. We then discuss what the participant can actually control: savings rate and asset allocation. While this is a broad review, we have found that more participants sign up and save more than the standard automatic contribution. They also choose a risk level that is suitable instead of a standard moderate risk level.

The next step is to hold another level of presentations: Budgeting (helps with deferral rates) and Investing (helps participants understand asset allocation). We have had great traction with these meetings where participants have thanked us for the basic financial knowledge they did not receive during their school years.

After the group meetings, we conduct one-on-one meetings with participants to further assist with payroll calculations or questions they may have with the options within the plan. We also utilize Morgan Stanley’s in-depth financial planning tool, LifeView, to draw up a full retirement picture for participants that not only includes the spend-down effect but allows us to calculate when certain larger expenses will occur in retirement. We have not seen a tool with as much capability as the LifeView from our peers.

The evolution of this education process has occurred because of the work we put into our business model when plans were holding tight while the dust of the Affordable Care Act was settling. We found that prospects were putting off the decision-making process, which allowed us to improve and streamline our investment process. We ensured the tracking held all the key criteria and we had a high conviction list of funds. This led to more time available to conduct education. It has also reduced the investment discussion to about 10%-20% of an investment committee meeting, which led to more focus on administration and education.

This approach and the case studies we have completed have led to winning at least 10 plans in the last 12 to 18 months.

PA: Describe any particularly noteworthy initiatives you have led with your customer base in the past 12 months (investment, education, plan design or communication).
BG:
 In addition to the education initiatives we are currently working on, we have worked with clients on fee levelization and target date analysis. We believe these are two areas that require the attention of the Investment Committee.

PA: As a retirement plan adviser, what do you take the most pride in?
BG:
Every member of our team wants to make a difference. As corporate retirement directors at Morgan Stanley, we are able to make a difference for the participants of plans we serve. We do not have a minimum account balance requirement like other Morgan Stanley advisers who work with individual investors. We are able to help the people who need the most help. We believe from a behavioral standpoint, the retirement industry failed participants years ago by focusing on the wrong retirement number: the final balance.

The industry has shifted the message to the contribution percentage but it is our call as advisers to bring this information to participants. With pensions going away and participants unsure of Social Security (Pew Research Study), the weight falls on the contribution percentage. The days we are the most proud are when our education creates a need in a participant’s mind to make a positive decision that will help impact their retirement picture.

BUSINESS AT A GLANCE

LOCATION: Jenkintown, Pennsylvania
TOTAL ASSETS UNDER ADVISEMENT: $1.7 billion
MEDIAN PLAN SIZE (IN ASSETS): $20 million
TOTAL PLANS UNDER ADMINISTRATION: 105

2016 RPAY – AFS 401(k) Retirement Services

PLANADVISER: Tell us about your practice and how you and your team members got into advising retirement plans.
AFS 401(k) Retirement Services: Our team had modest beginnings with a big mission and vision. AFS Financial Group was established in 1988 by our founding principal, Alp Atabek. Building from his background as a tax accountant, Alp decided to offer financial planning and investment management services for individuals in his Bethesda, Maryland, office. Recognizing most companies and their employees were not achieving their retirement plan goals, and determined to establish a better process, Alp began providing retirement education sessions to small- and mid-sized companies in the area.

I, Alexander Assaley, grew up with financial advisers in my family; my father and my uncle were both advisers. However, I didn’t necessarily think I would get into the financial services business. When I was 17 years old, my father unexpectedly passed away en route to a business awards trip in Hawaii. He had always managed our family’s finances, and we learned very quickly how difficult that was. In a few short years, I came to realize the financial struggles that most working Americans deal with on a daily basis. Ultimately, these experiences helped me grow and develop an interest and love for understanding how people make decisions with money, and help them do a better job planning for today, tomorrow, and their long-term future.

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In 2006, I joined Alp with the singular focus of creating better retirement programs for companies, developing effective oversight and compliance for their committees, and enhancing the experience and positive outcomes for their employees. Even before the 408(b)2 fee disclosure and the Department of Labor’s (DOL) fiduciary regulation, our team decided to work as independent advocates simply because it was the right thing to do. While the first few years in building our practice were challenging, Alp and I had a clear mission and vision to deliver a proactive, high0-touch service model to clients.

You could say that fate brought the three of us together. In 2008, I met Daniel and we began sharing our ideas and input on both life and the retirement plan industry. At the same time, Daniel and his wife, Becky, were planning to depart on an 11-month missionary trip, serving those in need around the world. After interviewing over a dozen firms in the Washington, D.C., area, Daniel merged with me and Alp to create AFS 401(k) Retirement Services, where we initially served his clients while he provided humanitarian aid in 2nd and 3rd world countries around the world.

By 2011, our continued drive, perseverance, and passion to create better financial futures for employers and employees had helped us reach modest, and continually growing, levels of success. What started as three retirement plan clients in 2006 had now grown to more than 30 retirement plan clients and over $500 million in plan assets under advisement. Our focus on delivering high-touch service to clients was working, as we were starting to get noticed.

In 2012, I was named Top Adviser of the Year for Large Plans by 401kwire.com. Also, at the end of that same year we were honored to receive the Retirement Adviser of the Year Award by Employee Benefits News. These accolades only pushed us to work harder and do more for our clients because it meant we had a responsibility to live it up to these achievements and the status as leaders in the industry.

We also became more involved within the industry—speaking at conferences, events, and helping to shape policy here in Washington, D.C. In 2012, I became a member of the NAPA Steering Committee charged with coordinating their annual 401(k) Summit. Additionally, Daniel and I have been involved with the NAPA Fly-in forum and other meetings with policymakers to help promote and strengthen the private retirement system. In mid-2016, I will serve as a member of NAPA’s Leadership Council.

We now serve 55 companies and organizations as their dedicated, retirement plan adviser. We are more energized than ever before in creating tools, resources, and solutions to help working Americans and employers enhance their retirement programs. We continue to focus on growing our client relationships and our team and work closely with other industry practitioners and advisers in order to collectively raise the bar for our nation’s retirement system.

PA: What is your mission statement
AFS: We believe people should enjoy their life—all of it. To help them achieve this, we work to make complex retirement plans simple.

We stand out because of our process and our team. We take the time to get to know and understand an organization’s values in order to create a custom service model to meet their needs. Our firm stands by four guiding principles:

  1. We believe in working Americans, and believe all employees should have access to the tools, resources, and advice they need in order to create a strategy to achieve a dignified retirement.
  2. We care about companies and the challenges they face with fiduciary responsibility. We are driven to help employers and their benefits committees understand and manage their retirement plan duties, and navigate the complex rules and regulations, maintaining plan compliance and efficiency—and we provide the expertise, hands-on approach, and passion to serve employers and employees.
  3. We support a strong retirement system—we are actively involved within the industry through thought leadership and advisory council roles to promote an ethical, innovative, and valuable retirement system for American workers.
  4. We focus on our team—our firm is proud of our culture, one that promotes integrity, knowledge, and opportunities for career advancement. We recognize the importance of work/life balance and encourage involvement in continuing industry education, as well as worthwhile social and charitable efforts that are important to our employees.

 

BUSINESS AT A GLANCE

LOCATION: Bethesda, Maryland
TOTAL ASSETS UNDER ADVISEMENT: $1.12 billion
MEDIAN PLAN SIZE (IN ASSETS): $16.5 million
TOTAL PLANS UNDER ADMINISTRATION: 55

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