Savant, Monitor Group Finalize to Become National RIA

The company, Savant Capital LLC, will provide strategic advantages and efficiencies, and have nearly $2.7B assets under management.

The strategic combination of Savant Capital Management and The Monitor Group, one of the biggest in the registered investment adviser (RIA) industry, will give the new company more than 90 employees in nine offices in three states (Illinois, Wisconsin and Virginia).  Savant Capital will be among the top 50 largest RIAs in total assets under management.

The combination of the firms will allow the two organizations to utilize best practices by leveraging their combined intellectual capital and expanding service offerings, and creating long-term and continued success for clients.  Both organizations are fee-only financial planning and investment management firms with similar investment and planning philosophies, a fiduciary approach and corporate values.

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The board of managers for Savant Capital is Thomas Muldowney, chairman and principal; Brent Brodeski, chief executive and principal; Richard Bennett, COO and principal; and Glenn Kautt, vice chairman and principal (previously president and chairman of The Monitor Group). Before the combination, Muldowney, Brodeski and Bennett were principals at Savant Capital Management.

The new Savant gains strategic advantages by combining The Monitor Group’s estate planning and tax preparation strengths with Savant Capital Management’s divisions, which serve investors who have $50,000 or more in assets. Savant Capital Management also has an institutional division that provides advisory services to 401(k) and company retirement plans, endowments, foundations and private trusts.

Savant Capital will be headquartered in Rockford, Illinois.

 

Despite Funding Relief, DB Contributions May Stay Above Minimum

Contribution activity could remain above the minimum requirement despite a bill that gives defined benefit (DB) plan sponsors funding relief, a report contends.  

The transportation funding bill expands the period used for determining interest rates for calculating pension liabilities to 25 years (see “Pension Funding Measure Addresses Low Interest Rates”). For 2012, the interest rates must be within 10% of the average of benchmark bond rates for the 25-year-preceding period. The provision helps plan sponsors because interest rates were much higher before the 2008 financial crisis, and the use of higher interest rates lowers pension liability calculations.   

While the funding relief is expected to lower the mandatory contribution requirements over the next several years, many plan sponsors have historically contributed more than the minimum requirement in any given year, according to a report by Goldman Sachs Asset Management (GSAM). The firm expects that trend to continue.

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Many plan sponsors have previously said they intend to make large contributions to their pension plans. Even if required contributions are lowered, some plan sponsors may still want to make large payments into their plans because of record levels of cash on corporate balance sheets and low interest rates available in credit markets.

Plan sponsors who have large cash balances or simply do not want to change their strategy are most likely to remain contributing more than the minimum, Michael Moran, pension strategist at GSAM, told PLANADVISER

Moran said if plan sponsors contribute less, they should keep in mind that the pension liability recognized on the balance sheet will not decline as much as it would if a higher contribution was made. “You still have the liability there,” he stated.

While this new legislation would help some corporate DB plan sponsors who are struggling to make extremely large required contributions, it is not a cure-all, Moran emphasized.

“Because of the way the legislation was written, the effectiveness of that relief diminishes over time,” he added.

On June 29, Congress gave its final approval for the bill’s pension changes (see “Congress Passes Bill With Pension Funding Relief”). 

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