PLANADVISER - January/February 2018 - 39

says adviser Mitch Milless, senior vice president of financial
services at RJF Financial Services in Minneapolis. " The
biggest commodity in our business is investment advice, " he
says. " A lot of the time, advisers are like, 'I'm the wizard:
I'm coming in, and I'm great on investments.' In reality, we
all have that capability. Many of our competitors say, 'Our
deliverable is the investment piece.' We're saying, 'That is
one part of our deliverable.' "
Advisory firms pitching their services often have little to
offer on troubleshooting regulatory and compliance requirements,
Milless says. RJF Financial has fashioned its organization
to give sponsors that help, he says. " Our competitors
will have five or six salespeople/advisers, and one or two or
three advisers who are service staff, " he says. " We went the
other way, where we have two or three principal advisers
responsible for bringing in new business-but more advisers
doing troubleshooting for our plan clients. "
The firm also distinguishes its fiduciary value from
its competitors by no longer handling individual wealth
management, Milless says. " Now, we don't do rollover business
at all. We said, 'This [plan work] is going to be our
specialty, so let's not muddy the waters,' " he says. " So, we
can say to sponsors that we have no conflicts of interest
whatsoever. That helps, because not many employers are
excited about advisers trying to 'sell' their participants. "
Focus on Risk Mitigation
Once signing a plan sponsor client, Chairvolotti Financial
has learned to simplify how it explains the fiduciary
process: both the sponsor's responsibilities and its own
fiduciary work. " We used to put a big binder together for our
clients, " Chairvolotti says. " We stopped. We realized it was
creating inaction, because it was so comprehensive. "
Now Chairvolotti Financial uses an online fiduciarycompliance
tool that includes a sponsor dashboard breaking
down the current status of fiduciary documentation work
for that plan into three categories: completed documents,
documents that need the sponsor's signature, and pending
tasks. Sponsors know specifically what they need to do,
and when, to comply with fiduciary requirements and what
tasks the advisory firm does. " This way, clients can see that
we are doing something other than quarterly investment
reviews for them, " Chairvolotti says. " We said, 'We've got to
put something in front of them that they'll actually see, so
they can know what we're doing.' "
To show its value in helping sponsor clients handle their
fiduciary role, Hooker & Holcombe Inc.'s investment advisory
group, in West Hartford, Connecticut, puts considerable
focus on risk mitigation-not just in investment
analytics but in the broader sense of how that applies to a
retirement plan. The group proactively talks to clients about
potential changes in laws and regulations being discussed
in Washington, for example. " For sponsors, the fiduciary role
almost feels like protecting from a 'black swan' event, " the
group's president and chief investment officer (CIO), Rodger
Metzger, says, referring to unpredictable occurrences.
" Plan sponsors are not sure what's going to come up,
so it's nice to have someone who is constantly looking out
on their behalf-and making sure they are protected from
surprises, " Metzger continues. " That way, they not only have
a high-quality investment menu, but they have someone
who is looking out for other [potential compliance issues]
on their behalf. If we give sponsors that, they are much less
likely to pick up the phone when another adviser calls. "
The investment advisory group is deliberate about
having those conversations with clients, Metzger says. It
provides them with an annual fiduciary calendar that specifies
the fiduciary topics it covers with clients each quarter.
" Rather than mentioning something just as a spur-of-themoment
more
methodical about setting aside the time to talk about:
'Down the road, this may be a concern,' " he says. " The fiduciary
calendar allows us to incorporate a lot of information
into our quarterly report, and it also allows us to put that
discussion into the meeting minutes. "
Much of a plan adviser's fiduciary value to clients comes
from " helping solve problems and identifying issues sponsors
have-and maybe don't know they have, " says Doug Prince,
CEO and a principal at ProCourse Fiduciary Advisors LLC,
headquartered in Carmel, Indiana. He breaks down the value
to clients of his firm's fiduciary work this way: 10% is in doing
investment reviews; 20% in customizing a plan's lineup for
the demographics of that organization; 20% in documenting
prudent fiduciary processes; and 50% in broader problemsolving
about issues a plan faces, such as above-average fees.
" We ask sponsors hard questions that can't be answered in
one meeting, " Prince says of problem-solving. " We are getting
them to think through, strategically, what they want their
plan to do. " The firm's surveys of its clients have shown they
really value the instances when ProCourse initiates meetings
for them with other clients facing similar issues with their
plans, to discuss what works to address those problems.
Prince says adding value as a fiduciary adviser is more
about looking forward than backward. " You can outline for
sponsors all the things you have already done for their plan,
and I think most of us do that now, " he says. " But the true
value is when you can help them map out where they're
going and then help them get there. " -Judy Ward
KEY TAKEAWAYS
* Advisers should not assume that, just because they
explain to a plan sponsor the role they play as a
3(21) or 3(38) fiduciary, the sponsor understands or
appreciates the service model.
* Advisers should help clients understand that
their services extend far beyond the investments
to encompass troubleshooting regulatory and
compliance requirements.
* A compliance dashboard or fiduciary calendar can
clarify for a sponsor what actions it needs to take and
all of the support the adviser provides them.
planadviser.com january-february 2018 | 39
thing during a quarterly meeting, we're being
http://www.planadviser.com
PLANADVISER - January/February 2018

Table of Contents for the Digital Edition of PLANADVISER - January/February 2018
