In Practice October 18, 2022

Recordkeepers Help Advisers Get Personal

How recordkeepers partner with advisers on managed accounts, retirement income and financial wellness.

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From left: Steve McCoy, iJoin; Sam Mitchell, Sentinel Benefits & Financial Group; Mike Cohen, NWPS (photo by Prana Portraits)


Trends and what’s working in recordkeeper-adviser partnerships was the subject of a panel discussion at the 2022 LeafHouse National Retirement Symposium.

The session moderated by Steve McCoy, chief executive officer at iJoin, a personalized managed account and retirement plan participant enrollment platform, featured Mike Cohen, director of national accounts, NWPS, and Sam Mitchell, president and CEO, Sentinel Benefits & Financial Group  

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Cohen said independent recordkeepers, and his firm in particular, are part of an adviser’s team. “We are there to make advisers look good,” he said.

NWPS is seeing more activity with emerging advisers who need to grow their business, according to Cohen. “Our platform allows them to provide core solutions to their clients.”

But NWPS reaches up market too and deals with some of the aggregator firms. “Aggregators have been moving toward larger recordkeepers and a broad-based national strategy,” he said. “But we focus on customized support and individualized care for clients in each marketplace.” He added that iJoin is a platform NWPS partners with that offers advisers a tool for growth.

“Our conversations with advisers have been focused on our ability to help them drive targeted campaigns where they see outcomes that are not what they want them to be,” Cohen said. “That is what is resonating with advisers. Having participants pick up the phone and someone being there and understanding where they are does matter.”

Sentinel’s Mitchell explained that his firm’s foundation was recordkeeping, but it evolved into a wider range of services, including advisers. “We believe our secret sauce is being an adviser in the Northeast. Providing a full range of services gives us the advantage to know what advisers need,” he said. “We want to marry independent advisers with independent recordkeepers. We’ve been through a time where advisers felt like they had to partner with big-name recordkeepers to compete, but we think it’s more about having a recordkeeper that understands the personal relationship advisers have with business owners.”

Sentinel works a lot with advisers with five to 20 retirement plan clients, according to Mitchell. “It’s not their core business, but it is ours, so we can help them communicate and personalize communication to participants,” he said. Mitchell added that no adviser wants 20 recordkeeper partners they can’t manage, but three to five that can meet different needs is good.

Sentinel focuses on personalization, Mitchell said. “The relationship a participant has through our technology is adviser-centric,” he explained. “Advisers can provide custom planning and education. We have one adviser relationship where they want a call center so they can triage questions, but that is an anomaly.”

Personalization Through Managed Accounts

McCoy noted that “aggregator firms are adding wealth managers for obvious reasons, but we’re also seeing wealth advisers look for retirement plan advisers so they can leverage solutions like managed accounts” to reach clients. “They are looking to apply that to households that don’t have enough AUM to qualify for the full-blown advice solution.”

Advisers need to be aware of the next iteration of personalization, such as more personalized target-date funds or managed accounts, Cohen said. “It’s about educating plan sponsors about what is out there,” he said, adding that, with adviser managed accounts, recordkeepers work in partnership with advisers.

On the evolution of managed accounts, Mitchell said advisers historically would say, “Why should we offer managed accounts when we can’t pick investments?” But now advisers are able to have full discretion in investment selection with adviser-managed accounts.

“For an adviser that is also a personal wealth adviser, adviser-managed accounts are a tool to engage clients much earlier in their journey,” Mitchell said. “What we really need to solve for and support advisers on is to target information to participants when they need it and be much more relational so we can create action before it’s too late for them but also before it’s too late for us to connect with them.”

Retirement Income and Financial Wellness Can Be Controversial

McCoy moved into topics he called “controversial” in the industry. McCoy noted that there is so much noise around in-plan income—the largest insurance carriers in the world are all focused on the retirement plan industry. “They want to create a market that’s attractive,” he said. He alluded to retirement income-related announcements that a couple of big providers will reportedly make this quarter.

Mitchell said Sentinel has done a lot of research about retirement income in the last year or so. He thinks it has momentum in the retirement plan space and is something advisers have to be ready for. “Retirement income solutions need to be in-plan and adviser-centric,” he said. “We need to make sure solutions get to participants at the right time and are portable. There are some products out there, but we have a long way to go. The feedback we’re getting from advisers is they need more data and more comfort in being able to analyze solutions.”

Education is needed to reduce skepticism around income products, according to Cohen. “We’ve partnered with Allianz, and we think it’s a good solution, but advisers are still skeptical,” he said.

Financial wellness is controversial because there are so many definitions, Mitchell said. “We’ve become reliant on recordkeepers for financial wellness, but the truth is it is not enough to expect participants to go on a recordkeeper’s website to get financially confident,” he argued. “It’s been technology heavy, but [Sentinel] has changed it so that the participant has access to someone to talk to. We have to build trust. Financial wellness hasn’t worked for us until we put people in it.”

He added that financial wellness can’t be just a touch point when a participant enrolls in his retirement plan; “we have to keep reaching out.”

With financial wellness, there needs to be a balance between tech and personal support, Cohen said. “It depends on the age range of the participant you’re talking to.” Cohen added that constant engagement and checkpoints are needed. “Don’t expect participants to do it on their own; they should work with coaches,” he suggested. “We’re seeing advisers with CFPs on staff for this.”

“When we put out digital tools for financial wellness, we didn’t see adoption by participants, “iJoin’s McCoy said. “But when we started connecting participants with advisers, we saw that working for them.”
In Practice October 18, 2022

Getting Advisers Comfortable With the Future of Retirement Planning

DCIO is out; co-distribution is in, according to a panel discussion at the LeafHouse National Retirement Symposium.

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From left: Michael Garberich, LeafHouse; Tina Sanchez, BlackRock; Todd Williams, American Century; Mike Rosenberg, First Eagle Investment Management; Steve Dopp, Lord Abbett (photo by Prana Portraits)


Adapting to a changing marketplace, with more personalization and through partnerships, is critical for advisers, Michael Garberich, director of analytics at LeafHouse Financial Advisors, said at the start of a 2022 LeafHouse National Retirement Symposium conversation about the past, present and future of retirement planning.

Mike Rosenberg, head of retirement investment solutions at First Eagle Investment Management, called for a new way to evaluate investments.

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Addressing market volatility, Rosenberg admonished advisers not to rest when things are going well. “That’s the time to peek around the corner and see what’s coming,” he said. “There will be spats of volatility, so advisers need to be prepared. Creating an investment menu that works for participants is important.”

Rosenberg said he thinks the way investments have traditionally been evaluated is archaic. “One-, three- and five-year returns are not real measures of investment skill and capability,” he said. “That evaluation doesn’t do a service to participants, as we can see by the investment menus in most plans today.” Rosenberg added that it’s easy to sell a fund when the market is up, but when the market is down and the fund is down even more, most investment managers and advisers say, ’We’re going to wait and see.’ That’s kind of archaic.”

Rosenberg said investment managers and advisers should look at the intent of the investment—whether it is to beat its benchmark, to get as much alpha as cheaply as possible, etc. To protect participants’ assets, it’s important to take into account more than what has traditionally been evaluated. “Volatility is really important. Getting back to even more quickly and starting to compound wealth over time is the only thing that matters,” he said. “No participant says, ‘I want to beat the market,’ they say, ‘I want to accumulate enough assets to be able to retire.’ We need to find a way to measure that.”

Rosenberg added, “If that’s not how the investment policy statement says to evaluate investments, change it. The IPS should be reviewed regularly and updated, especially in times of volatility.”

Retirement Income Is the Focus of the Future

When it comes to retirement income planning, education is important but also experience is needed for participants to know how to handle volatility as they age, said Tina Sanchez, managing director at BlackRock. “I feel like once participants come out of this volatility, there will be many more conversations about income solutions,” she said.

Steve Dopp, national director, retirement at Lord Abbett, said the key to getting participants to use retirement income solutions is personalization.

“At BlackRock, we believe in a continuum of personalization,” Sanchez said. “That means [target-date funds] for the youngest investors, personalized TDF solutions for larger plan sponsors and co-manufactured solutions from different providers, especially in pooled plans to meet needs of different plan sponsors. Advisers should think about who to partner with down the road when it comes to personalization.”

One thing BlackRock has spent time on is the difference between genders, according to Sanchez. “We’ve launched a model for women, another step towards customization,” she said. “It’s not full advice; it’s a model that recognizes genders are different, behaviors are different, and women often have different career paths [than men].”

Rosenberg pointed out that the conversation about retirement income is not new. “The facts about aging demographics is not new, there are just some folks who punish innovators, and that needs to stop,” he said. “We need to encourage new products. There are some great products. There’s a spot for guaranteed income and a spot for a retirement tier—it’s not a one-size-fits-all solution.”

Dopp said personalization will also trigger more adoption of managed accounts, but adoption will start with larger firms. “Advisers need to partner with the innovators,” he said. “I’m building a team around entrepreneurs—people who think differently and can think about where we need to be in 10 years.”

A More Collaborative Future

Regarding partnerships and investment offerings, Dopp said, “I hate the moniker ‘[defined contribution investment only].’ We just need to be more forward-thinking about distribution across the industry.”

Todd Williams, vice president, consultant relations at American Century, said the firm has struggled with how to work with aggregator firms. It is dropping the DCIO label as well and assigning more specialists to a relationship, serving clients at all levels.

Williams noted that co-distribution is something American Century wasn’t doing two years ago. “Now we work with other asset managers to bring advisers solutions,” he said. “Partnering with others that have strengths in areas we don’t is really paying off.”

Dopp said it’s every vendor’s job to be a connective tissue to build strategic partnerships with advisers. “If we want real engagement, we can create strategies together,” he said. “We won’t be everything to everyone, but we want to be a lot to the folks we engage with.”

Advisers and providers need to solve for how to share information and become an industry network so decisions can be made more cleanly, Dopp said.

“Connections are incredibly important, and we need to understand that’s the path of least resistance to helping clients,” Rosenberg said. “We build investment menus that are multi-manager. There’s a slot for everyone. I think leveraging what we can all offer together is something advisers can do more of.”

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