Brokers/dealers live in the convergence of wealth and retirement

Brokers have lived in the convergence of wealth and retirement where most archivists and pension plan advisors are just entering it.

However, the leaders of the comic book retreat gathered at the 4e Annual RPA Broker/Dealer Roundtable and Think Tank held in New York following the Record Keeper Roundtable and prior to the 8e annual The Industry Awards are still struggling to bring together the institutional and retail businesses of their business.

Key themes around convergence included how to grow and show their businesses the full value of pension plans as well as access to data. More and more plan sponsors are asking for financial wellness tools to help workers, as retirement plans have become a priority, which is a major shift.

Specialists with 50% of their income from defined contribution plans represent 10% of all advisors with a plan; 35% are intentionalists with DC incomes of 15% to 49%, with the rest accidental or blind squirrels. While these percentages were similar between different types of CAs, there were widely divergent business models on how best to grow the pension plan business, including:

  1. Focus on specialists and direct them to them, which is favored by wirehouses
  2. Encourage and empower generalists, favored by independents
  3. Promote partnerships between RPAs and wealth management advisors, acclaimed by all

Highlights included:

  • MassMutual’s David Curylo sees his job as simplifying the complex, which Envestnet is trying to do with its acquisition of as well as Stephen Daigle’s BidMoni, according to Sean Murray.
  • While RPAG’s Jesse Taylor suggested that comics should create home office specialists, Curylo said his company relies on specialists in the field. UBS’s Mike Griffin noted that he was trying to replicate what specialists do in the home office.
  • Jim Doyle of JPMorgan Chase said his firm embraces non-specialists and tries to allocate sensitive banking credentials to adviser diversity.
  • Scott Smith of Hightower acknowledged that the 80/20 split between specialists and wealth advisors is the norm, but it can vary depending on what the referent wants to do. Partnerships can be tricky if the RPA leaves, especially when sharing costs.
  • Advisor Group’s Brian Brashaw said cost-sharing can even be a challenge within the eight BDs in his group, when many rely on archivists to help with commissions.
  • Cambridge’s Annie Messer has seen encouraging results from partnerships between her advisors in the 457(b) and 403(b) markets in particular.
  • Tapping into affluent clients who own or manage a retirement plan is a challenge, Mike Griffin noted, as is the focus on specialists, which limits distribution with their average plan size of $33 million. He also noted that more plan sponsors are asking for help with workers’ financial needs.
  • RBC’s Collin Royce said his company was trying to standardize service models and empower advisors, a sentiment echoed by Adeline Wong of Cetera, who said the BD was deploying regional growth managers to support generalists.
  • While noting that Kestra has a strong home office, Taylor Hammons said senior executives are struggling with pension plans’ seemingly low profit margins with 95% retained. MassMutual’s Curylo and Shawn Daly were able to show how plan participant earnings paint a very different picture. Chuck Serveiss of LPL said research at his firm indicates that wealth advisers with a pension plan are more profitable.

BDs agreed that they needed to collaborate to standardize and gain access to archivist data with three data aggregators in the room, including Morningstar, which built data channels to 26 archivists, Envestnet and RPAG. Leveraging behavioral finance even more and bringing wealth technology to the DC market by showing what problems their peers were solving were other ways to share.

They asked to highlight opportunities for wealth advisors with CD plans and perhaps expand LPL research to show how advisors who adopt convergence are more profitable. It was also suggested that Wealthies be expanded to include more providers who support RPAs and wealth advisors who help DC participants.

It was a vigorous and moderated discussion from a group whose wealth management capabilities are far superior to those of RPA-focused companies, but who struggle to secure resources within their own companies as the worlds converge. of retail and institutions collide.

Fred Barstein is founder and CEO of TRAU, TPSU and 401kTV.

About the author