SPONSORED SECTION Photography by Ryan Smith
The Value of Flexibility
The shifting retirement plan landscape offers advisers a chance
to rethink the range of solutions they use with clients
The always dynamic retirement plan market is once again
being roiled by external forces.
Among the current drivers
of the shifting landscape: a
continued focus on fees and a
newly implemented rule from
the Department of Labor that
expands the definition of fiduciary “investment advice.” That
rule has already forced many
broker-dealers to reassess
their operating models and has
injected new levels of uncertainty into how plan advisers
should best work with their
plan sponsor clients.
PLANADVISER spoke recently
with Neil Smith, executive vice
president of corporate strategy
at Ascensus, to learn more about what’s changing, how plan
advisers can position themselves to succeed, and how Ascensus
PLANADVISER: How are the new fiduciary rule and the
resulting focus on value versus fees changing the way retire-
ment plan advisers work with clients?
Neil Smith: It’s no surprise that we’re seeing a fairly significant
shift toward more transparent fee-based models in retirement
plans. This has been in motion for several years. The shift started
with independent RIAs operating on a fee-for-service basis and
acknowledging a fiduciary role with their clients. Now, as more
wealth management advisers migrate into the retirement space,
they’re bringing their traditional fee-based pricing models with
them. Without a doubt, the Department of Labor fiduciary regulation has accelerated the change.
PLANADVISER: How are broker-dealers helping advisers
adapt to these changes?
Smith: They’re taking a couple of different approaches. In
PLANADVISER: Can you elab-
some cases, they’re creating
groups of specialist retirement
advisers that have met some
kind of a qualification level that
gives the home office comfort
that the adviser will be able to
operate under this new regula-
tory standard. In other cases,
we’re seeing home offices
developing products with what
we’d call “guardrails.” The idea
is to allow the broader-based
wealth management advisers
to offer solutions in which the
firm steps into a co-fiduciary
role and develop products that
ensure that core services are
uniformly applied across the
orate on how that works in practice?
Smith: With these solutions, firms want to ensure that advisers
are executing against the regulations and the client’s needs in
a way that protects the interests of the advisers, the firm, and
the client. In a typical example, the home office will step in as
a co-fiduciary on the investment platform. The home office
or another designated fiduciary is creating the menu and, as a
provider, Ascensus is supporting their needs with our integrated
tools and technology. They also will look at additional product
features—managed accounts for example—that may assist
advisors in delivering key services and meeting the plan’s regulatory requirements.
PLANADVISER: What can advisers themselves do to reinforce
their value to their clients? Clearly this is more than a matter
of changing the way they bill for their services or introducing
a new product.
Smith: Advisers need to rethink core aspects of their business.
We’re encouraging them to revisit their value proposition and
to clearly position it with their clients. We also recommend that