October 11, 2017

2016 RPAY – Graystone Consulting | Cincinnati, Morgan Stanley

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PLANADVISER: What is your mission statement?
Graystone Consulting | Cincinnati, Morgan Stanley: Specializing in consulting services for qualified retirement plans, our mission is to provide objective, full-service, leading edge consulting services focused on meeting the needs of our plan sponsor clients, their investment committees and employees. Through independence and transparency in investment advice, we believe that excellence in consulting requires unabashed client advocacy and stewardship.

PA: How is your team/process/structure unique? How has it evolved?
GC: We understand that there are many experienced, large teams who provide excellent retirement plan consulting services. For many institutional clients, selecting an 401(k) consultant is often a compromise. Do you choose a large, research-rich outfit that assigns B-team professionals to all but the premier clients — or a boutique consultant that delivers quality attention but lacks research resources? Graystone Consulting | Cincinnati provides a distinctive third solution that combines the extensive capabilities and research of the leading consulting organizations with customized A-team service forevery client.

Graystone’s capabilities, resources and culture provide clients with a productive and personalized investment consulting relationship. We believe we are unique in regards to the level of service that we are able to provide because of our team members’ extensive experience and number of team members.

Our team consists of Chartered Retirement Plan Specialists (CRPS), Certified Behavioral Finance Analysts (CBFA), and multiple Certified Investment Management Analysts (CIMA) and Accredited Investment Fiduciaries (AIF) to assist our plan sponsors and participants. We are completely dedicated to the retirement plans marketplace.In addition, we are able to draw upon the vast resources of Morgan Stanley which include over 40 attorneys, 250 compliance professionals, 470risk personnel and over 260 consulting group professionals supporting our investment manager research process (including a dedicated stable value analyst).

Given that we have numerous clients spread throughout the country, our team size and expertise enables us to deliver the highest quality fiduciary support for our plan sponsors. It also allows us to spend a lot of time focusing on employee retirement readiness as we travel throughout the country to meet employees and help them prepare for a comfortable retirement.

In recent years, there has been a lot of focus on the behavioral finance side of participant education. Given the numerous behavioral related obstacles that tend to keep participants from saving enough money for retirement, our team includes a Certified Behavioral Finance Analyst (CBFA) and a Chartered Retirement Plans Specialist (CRPS) who is dedicated to orchestrating plan design enhancements along with retirement plan education programs to help our plan sponsors dramatically boost plan deferrals and participation rates.

Along with our participant related services, we offer extensive fiduciary support and stewardship for our plan sponsor clients. We provide full fee transparency and assume co-fiduciary status in a 3(21) and 3(38) capacity. Being a part of Morgan Stanley also enables our clients to have “peace of mind” that they are partnering with a localized team that works for one of the largest financial services firms in the world with all of the necessary resources to assist them with their fiduciary responsibilities.

Over the recent years, our team has changed its focus to promote increased retirement plan effectiveness through behavioral finance related employee education and plan design. Asset allocation and fund performance are still of great importance, but we now place a higher level of emphasis on participant deferral percentages, plan participation, and automated plan design features as these are extremely important drivers of retirement readiness

In regards to our investment management consulting, we only offer our services for nonproprietary funds and products to avoid any potential conflicts of interest. We believe that our fiduciary services for plan sponsors, combined with behavioral finance related plan design advice and participant education, along with our ability to work with clients ranging from small businesses to Fortune 500 companies, enables us to deliver a process that is truly unique in our industry.

PA: What have you done in the past year to improve participants’ retirement readiness?
GC: We were recently hired by a corporate client plan sponsor who had a very large percentage of plan assets residing in the stable value fund. During our analysis of the 401(k) plan, we identified that most of the assets residing in the stable value fund were a result of the client’s pre-Pension Protection Act (PA) default investment selection. The client has since selected the plan’s target retirement date funds as the current QDIA.

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We worked with the plan sponsor and the company’s 401(k) recordkeeper to implement a plan re-enrollment using the target-date funds as the default selection in an effort to ensure the appropriate level of participant investment suitability. We supported the initiative with extensive employee education to communicate the changes to the plan participants.

PA: As a retirement plan adviser, what do you take the most pride in?
GC: Helping participants reach their retirement goals. Quite often, we meet with employees who have never met with a financial advisor during their entire life. These employees tend to feel very anxious about investing their money and are very concerned that they do not have the necessary tools to plan for a comfortable retirement. We take pride in being able to provide these employees with much needed education to help them reach their retirement goals.

Recently, we had an employee of a corporate client thank us for instilling in him the importance of saving over 25 years ago. He was very proud that he now has an account balance worth over $600,000, and he mentioned that he was never a “saver” until he attended one of our employee education meetings. He stated that that one chance encounter with our team 25 years ago literally changed his life and he was extremely appreciative. It is moments like this that reminds us why we are so very proud to be able to help employees plan for a more enjoyable life in retirement.

PA: What benchmarks do you use to measure plan and client success? How do you react to clients or prospects who don’t share your goals for their retirement plan?
GC: We benchmark investment returns, risk, retirement readiness, investment outcomes, fiduciary scores, fees and plan design. We believe that the proof is in the numbers, and client success means that their employees can retire on their terms. Of course, we never completely agree with each client’s investment committee, but the vast majority of our clients share our goals for their plan. We think this is due to our sales process—meaning, they hire us if they generally believe in our approach. At the end of the day, we always provide our full and honest opinion even if we know they will disagree.

BUSINESS AT A GLANCE

LOCATION: Cincinnati, Ohio
TOTAL PLAN ASSETS UNDER ADVISEMENT: $3.4 billion
MEDIAN PLAN SIZE (IN ASSETS): $40 million
TOTAL PLANS UNDER ADMINISTRATION: 73
October 11, 2017

2016 RPAY – Compass Financial Partners

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PLANADVISER: What is your mission statement?
Compass Financial Partners: We love what we do. We pave the path to the future. Our mission is to put the people we serve—retirement plan sponsors and plan participants—on the best path toward their goals. We enable them to make smart decisions, empower them to act with confidence and strive to position them for long‐term success. It is an awesome responsibility. And an equally awesome opportunity.

PA: How is your team/process/structure unique? How has it evolved?
CFP: At Compass Financial Partners, we know we’re not the only firm offering retirement plan consulting to plan sponsors across the U.S. But while other firms may offer a similar list of services, we believe that who we are and how we operate sets us apart. As highly credentialed professionals (accreditations include: CFA®, CPA®, CFP®, CRPS®, CRPC®, AIF®, AIFA®, QPFC®, GFS® & CMFC®) with a seasoned history in helping plan sponsors maximize their retirement plan benefit, we have earned the trust and respect of our clients, and have established ourselves as recognized thought leaders in the retirement plan industry.

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But we know we can always improve, and so, we are committed to re‐investing in our business through not only the exceptional team members we employ, but also in our investment in infrastructure, operations and technology in order to continuously enhance the services and consulting capabilities we deliver to our clients.

In an industry where we see cost compression, increasing responsibility and greater competition, our team has created exceptional partnerships with clients and service providers that create efficiencies, fosters collaboration, and ultimately help employees navigate retirement with dignity.

PA: Describe any particularly noteworthy initiatives you have led with your customer base in the past 12 months (investment, education, plan design or communication).
CFP: Aside from our continual encouragement for plans to adopt automatic enrollment and automatic increase at higher deferral percentages (i.e. automatic enrollment at 6% and automatic increase at 2% annually to as high at 10% 12%), we reviewed with each of our clients over the past year increasing the flexibility of distribution features that would assist participants in meeting their income replacement needs at retirement.

The goal of our discussions with clients was to encourage plan provisions that allowed for a plan truly designed to accommodate the needs of participants from “cradle to grave,” thus allowing participants the ability to continue to benefit from the institutional pricing of their company sponsored plan. We reviewed provisions to assure that plans provided the maximum distribution flexibility at retirement by offering notonly lump sum but partial lump sums and systematic installment distributions. The timing was great, as many of our clients were going through a document restatement last year and were able to wrap these changes into the restatement.

Most recently, we have also been reviewing with our clients the Department of Labor’s (DOL’s email sent last fall to plan sponsors with tips for selecting and monitoring a plan auditor. Just like we did when the DOL released their target-date fund tips in early 2013, we have assisted our clients with documenting their process regarding auditor selection.

Lastly, Compass has continued to invest heavily in our firm’s investment due diligence efforts.

With plan sponsors and regulators steadfastly focused on fees we believe the bar for active management has been raised. Therefore, the insights we gain from traveling across the country to meet directly with portfolio management teams (10 due diligence meetings at firm headquarters in 2015) has never been more important to our process.

PA: As a retirement plan adviser, what do you take the most pride in?
CFP: We believe at the heart of every fiduciary decision is a single question: “Will it help plan participants?” We have built our firm on empowering plan fiduciaries to have the confidence to make the right decisions in designing their plan in order to improve their ability of their employees to retire with dignity. As such, although we fully embrace our role in supporting our clients regarding the “3 F’s” (fees, funds, and fiduciary) our passion lies with the plan participant.

We believe strongly in the concept of “what gets measured gets done”—whether it is measuring the effectiveness of plan design or documenting our education efforts by tracking key metrics such as the number of group and individual meetings, number of employees in attendance and the number of employees taking positive action in group meetings and individual meetings—we believe our passion in helping participants become more engaged, better informed and empowered to take or maintain positive action leads to a more appreciated benefit program and extraordinary results.

PA: How do you grow your business? What changes to your practice or service model are you planning for 2016?
CFP: As mentioned above, our biggest differentiator is our team. It’s not our investment scorecard, or our fiduciary lockbox that gets us hired. It’s our people. It’s the combination of experience, energy and passion that sets us apart. Each of the team members supporting client relationships with Compass brings specific experience: investment due diligence and performance reporting, fiduciary governance, participant engagement strategy development and execution, plan design and fee benchmarking.

These specialty areas of focus, when combined, allow us to help holistically evaluate and enhance our client’s retirement plans. In 2016, we have, and will continue to focus on selectively making additions to our team who can both complement our passion and enhance the Compass’ client experience.

BUSINESS AT A GLANCE

LOCATION: Greensboro, North Carolina
TOTAL PLAN ASSETS UNDER ADVISEMENT: $6.1 billion
MEDIAN PLAN SIZE (IN ASSETS): $13 million
TOTAL PLANS UNDER ADMINISTRATION: 100

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