PLANADVISER - May/June 2019 - 22

Other firms, including many interviewed for this article,
are eagerly building business models that can support
advisers working with both private wealth management
and institutional clients. They say that serving retirement
plans and private individuals does not mean a firm will
aggressively solicit rollovers or engage in other potentially
problematic cross-selling behaviors the Employee Retirement
Income Security Act (ERISA) has barred.
Instead, as Dick Darian and Bob Francis, partners at
Wise Rhino Group in Mount Pleasant, South Carolina, see
it, building a firm that does both private wealth and institutional
retirement plan business is about creating a holistic
service ecosystem that clients want and need, especially
as the defined contribution (DC) plan system matures and
becomes a key component of individuals' retirement income.
" When I talk to a lot of our institutionally focused peers,
they're all trying to figure out their relationship with the
wealth management space, " says Rick Shoff, managing
director of CAPTRUST Advisor Group,
in Raleigh, North
Carolina. " We are going down the route of doing both private
wealth and retirement business because we know that, ultimately,
all the people we help within the institutional plans
are eventually going to have to do something with that
money. [So], we believe being holistic is important for our
future and for our clients' well-being. "
Darian and Francis, whose firm specializes in helping
advisory firms identify potential partners or merger/acquisition
opportunities, agree that the barrier between wealth
managers and retirement plan advisers is quickly diminishing.
They go so far as to suggest that retirement advisory
practices that fail to engage in wealth management may not
survive the next decade.
Gone are the days, they say, when there was hesitancy
to espouse wealth and retirement businesses out of fear
of regulatory scrutiny or the potential for conflicts of
interest. Rather, firms are embracing the holistic philosophy
and model.
As a result, they say, competition on pricing is heating up
dramatically across the advisory industry.
" We're aware of certain firms that are very large that, at
this point, are almost giving away the plan services, the fund
lineup and the fiduciary services to the plan sponsor, to get
access to the participants' future wealth business, " Francis
says. " If you're a retirement practice that does not engage in
private wealth management and you're pricing your service
at X, you will soon be competing against firms that are
willing to price at a fraction of X while also offering equal or
better quality service for participants. In cases where plan
sponsors are fine with the potential for cross-selling, that's
going to be incredibly tough for the retirement-only shop. "
The integration of participant services into the retirement
plan business shows that certain fundamentals have
remained in place over the decades, especially when it
comes to the importance of meeting the needs of individual
participants, notes Cathy Clauson, AssetMark senior vice
president of sales strategy, operations and administration,
based in San Francisco.
" At AssetMark, we're seeing more and more individual
wealth advisers who have not tried retirement plan services
before embrace the approach of working with us, in a
turnkey manner, to serve retirement plans, " Clauson says.
" These are advisers moving over from just doing wealth
[management] and stepping into the retirement plan space.
We have six or eight of them making the jump every month. "
Clauson, however, has seen few advisers reduce or waive
their 401(k) plan fees in order to make their money by crossGig
Workers and Phased Retirements
WITH a financial services career
stretching back to 1998, Sri Reddy,
senior vice president of retirement
and income solutions at Principal
Financial Group in Des Moines, Iowa,
has spent considerable time observing
the slow but steady evolution of the
retirement plan industry. Asked to
predict the biggest source of potential
disruption in the industry today,
Reddy points to the growth of the
gig-based economy and the changing
demographics of the U.S. work force.
Even if gig work is not the norm by
2030, as some studies have suggested,
Reddy says, the relationship between
employer and employee is changing.
" We are starting to see a fundamental
reconsideration of how people
think about their relationship with
their employer and, as a result, what
their expectations are for compensation
and benefits, " Reddy says. " Structurally,
there will undoubtedly be changes to
come in the next 10 to 20 years. "
One main structural change he
foresees is that " the whole notion of
retirement being a one-time event at
age 60 or 65 is becoming obsolete. "
" That idea made sense when most
of our economy was based on physical
labor. Your body was unable to
continue to work beyond this age, "
Reddy says. " But I would argue that
the jobs we have now, which are more
service- and knowledge-based, make
older workers more valuable. They
can give back more as they age. The
practical result is that, as people hit
age 62 or 65 in this environment, they
want choice. They want choice on how
many days they work, how much they
engage, and what types of roles they
will fill or not fill. "
This will transform what retirement
looks like, over time, Reddy says.
Simultaneously, with the aging of the
Baby Boomers, the U.S. now sees its
first generation to enter retirement
generally much healthier than were
previous generations. -JM
22 | planadviser.com May-June 2019
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PLANADVISER - May/June 2019

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