PLANADVISER - January/February 2020 - 13

Consolidation Pressures
2019 breaks M&A records
WHILE various sectors of the U.S. economy face consolidation
pressures,
the
registered investment
(RIA) industry is in the eye of the merger and acquisition
(M&A) storm. According to Fidelity Investments' year-end
" Wealth Management M&A Transaction Report, " 2019
proved to be a record year for both RIAs and independent
broker/dealers (B/Ds) when it came to M&A activity. The
firm reports that, across the RIA and independent B/D
channels, there were 139 transactions, representing $781.1
billion-amounting to increases of 43% and 38% for the
two channels respectively, compared with full-year 2018.
Fidelity says, " The pressure for financial services firms
to scale and the pervasiveness of prepared buyers who
hold significant capital in a low interest rate environment "
continue to fuel record transaction activity. Underscoring
the aggressive activities of serial and strategic acquirers,
54% of RIA transactions were completed by the 10 most
active firms, accounting for 68 deals in total.
As 2020 unfolds, Fidelity expects the same forces-
external capital, growing operating costs, the search for
talent and the need for scale-to pave the way for another
year of strong activity. -John Manganaro
adviser
139
$781.1
transactions
representing
billion
across the RIA
and ind B/D
channels.
Source: Fidelity Investments
Uncharted Market
Small 403(b) plans can especially use an adviser's expertise
CAMMACK RETIREMENT GROUP was started
more than 50 years ago to specifically serve
the 403(b) market, says Mike Volo, senior
partner in the firm. " In the larger end of
the market, where we do a lot of business,
there seems to be a small group of experienced
advisers serving these plans, " Volo
says. " But in the smaller end of the market,
there are opportunities for advisers. "
Plan design is a clear area where 403(b)
plans need advisers' expertise, particularly
with implementing automatic enrollment
and deferral escalations, says David
Hinderstein, president of Strategic Retirement
Group Inc. " This is the biggest area
where 403(b) plans need help, " Hinderstein
says. " The second is to benchmark and
upgrade provider services. These sponsors
have not been as diligent as 401(k) sponsors
and are paying higher fees. "
" Advisers
making
are particularly
investment
adept
at
recommendations
and putting together fund lineups where
the fees have been scrutinized, " says
David Kaleda, a principal in the fiduciary
responsibility practice group at Groom Law
Group, Chartered. " Cases brought against
403(b) plans highlight another area where
advisers can help, and that's establishing
an IPS
[investment
policy
statement],
procedures on how to run a committee and
prudent processes. " While many 403(b)
plans are governmental plans not subject
to the Employee Retirement Income Security
Act (ERISA), they are still subject to
state laws that resemble ERISA. The tricky
part of handling these plans that advisers
must keep in mind, Kaleda says, is " every
state, county and local government has its
own laws. " -Lee Barney
ON THE MOVE
➜ Cerity Partners LLC
has merged with wealth
management firm EMM
Wealth. As of this transaction,
Cerity Partners
manages approximately
$26 billion in assets.
➜ Bradley Ridnour has
been appointed head
of worksite distribution for
Massachusetts Mutual
Life Insurance Co.
(MassMutual), responsible
for sales of voluntary
and executive benefits at
the workplace.
➜ Transamerica has
appointed Darren Zino
vice president and managing
director for U.S.
retirement sales, leading
Transamerica's distribution
teams for mega,
large and midsize retirement
plan sales. In his
new role, Zino is responsible
for driving the
company's market-share
growth for workplace
plans.
➜ Pacific Life has
named Brian Woolfolk
as leader of the company's
new institutional
division. The division will
bring under one leadership
team Pacific Life's
products in the institutional
space, including
those for pension risk
transfer, stable value
wrap and federal home
loan bank businesses.
planadviser.com January-February 2020 | 13
➜
http://www.planadviser.com
PLANADVISER - January/February 2020

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