Charlie Cote

Head of Retirement LinkSM Sales at J.P. Morgan Asset Management

PAND16-TL-MS_JPMorgan_Image.jpgCharlie Cote, Head of Retirement LinkSM 
Sales at J.P. Morgan Asset Management
PA: Let’s talk about the retirement plan landscape. What changes are you seeing?

COTE: The retirement plan landscape has shifted dramatically since I first started in the business 20+ years ago. First, we’re seeing advisors widen the services they provide to clients, going beyond fund selection and monitoring to also offer guidance around financial wellness. Our 2015 Defined Contribution Plan Sponsor Research and 2016 Plan Participant Research have shown that participants want help and that plan sponsors want to help them. For example, our research indicates that the majority of employers feel responsible for the overall financial wellness of their participants and the majority of participants feel their employer should help them save for retirement.1

Second, we’re seeing a shift to a more mindful and thoughtful process for the selection and monitoring of DC plan investments, including the plan’s qualified default investment alternative (QDIA). Our research has indicated that about a quarter of plan sponsors don’t understand how their target-date funds [TDF] are constructed, yet every plan sponsor is responsible for the prudent selection and monitoring of their plan’s investments, including the QDIA. J.P. Morgan’s Target Date CompassSM can provide advisors and plan sponsors with an objective, documented and prudent process for target date fund selection.

Third, we’re seeing a further focus on fees and movement towards a non-revenue share class, such as R6.

PA: Charlie, how can plan advisers help sponsors in this changing environment?

COTE: We see an opportunity for advisers to be proactive with clients by sharing with them thought leadership and innovative practices around plan design and investment selection that can help place participants on a path to a better retirement outcome. In our 2016 Plan Participant Research, we found that seventy-five percent of participants think they should be saving 10% or more to be on track toward a secure retirement, of those seventy-six are missing their savings targets.

Advisers can help sponsors by making a recommendation to implement automatic features into the plan. For example, automatic enrollment benefits participants by putting them in the plan and placing them on a path towards saving more.

Our research also indicates that less than a third of participants are confident about which of their 401(k) investment options to invest in. A plan re-enrollment can help position these participants for retirement success by defaulting them into the plan’s qualified default investment alternative (QDIA), usually an age appropriate TDF, while still allowing those who want to take a more active role in choosing investments to opt out. Furthermore, our research shows that 82% percent of participants are in favor of or at least neutral on the concept of re-enrollment, and 99% of those who have gone through a re-enrollment and had their funds invested in a TDF were satisfied2. In addition to helping participants, if their default programs satisfy certain requirements, plan sponsors may gain safe harbor protection for assets defaulted into a QDIA.

PA: What is J.P. Morgan doing to help advisers build stronger plans with their plan sponsor clients?

COTE: J.P. Morgan Retirement Link is our fee-based adviser-sold, full-service solution for 401(k) plans with $500,000 to $50+ million in assets. We bring the full breadth and depth of J.P. Morgan Asset Management to advisers’ fingertips in three ways: competitive fees over similar solutions; investment flexibility and open architecture including access to J.P. Morgan Funds and our active managers with over $1.5 trillion in assets under management3; and best-in-class service4 driven by relationship managers with over 25 years of industry experience5.

PA: You mentioned competitive fees. Can you tell me what you mean by this?

COTE: We introduced a new pricing grid this year to be as transparent and competitive as possible with our fees. We offer two prices. The first is our cost for recordkeeping and administration only, and the second is for re-enrollment into a J.P. Morgan QDIA solution. Plans that choose to re-enroll into J.P. Morgan’s QDIA solution can achieve substantial cost savings with Retirement Link. To further assist advisers in pricing plans we offer a 401(k) fee comparison tool that helps advisers do three things. First is to compare their client’s current fees with the industry averages; second, advisers can determine if there are potential cost savings by moving a plan to Retirement Link and third is to document their process around fees for their client.


1J.P. Morgan Plan Participant Research 2016 and J.P. Morgan Plan Sponsor Research 2015.

2J.P. Morgan Plan Participant Research 2016.

3J.P. Morgan data as of 9/30/16.

4Chatham Partners Satisfaction Survey, 2015. When evaluating DC providers, a top 2 box rating of 85% or greater corresponds to best-in-class rating. 8 out of the top 14 DC providers are incorporated into this survey. Best-in-class rating for Overall Satisfaction, Relationship Management, Account Management, Good value for the money.

5Relationship Managers average 25 years of industry experience; 15 years with J.P. Morgan, 2016. There can be no assurance that the professionals currently employed by J.P. Morgan Asset Management will continue to be employed by J.P. Morgan Asset Management.

TARGET DATE FUNDS. Target date funds are funds with the target date being the approximate date when investors plan to start withdrawing their money. Generally, the asset allocation of each fund will change on an annual basis with the asset allocation becoming more conservative as the fund nears the target retirement date. The principal value of the fund(s) is not guaranteed at any time, including at the target date.

J.P. Morgan Asset Management is the marketing name for the asset management business of JPMorgan Chase & Co., and its affiliates worldwide.

JPMorgan Distribution Services, Inc., member FINRA / SIPC.