PLANADVISER - September/October 2021 - 21

such as an investment trade or deferral amount increase.
RFIs can also give a sense of how much a recordkeeper
personalizes its financial wellness communications for
different employee demographics, Braun says. Many recordkeepers
now have a huge quantity of financial wellness information
and tools. " How does the recordkeeper try to streamline
its financial wellness content? " she says. " How does it
funnel the right content to the right person, at the right time?
You don't want to talk to a 20-year-old about Social Security. "
How participants can access personalized financial wellness
advice-whether through a call center or online-is a
topic Duckett says is worth exploring in an RFI. " How easy
is it for participants to get the financial wellness advice they
need, wherever they are and when they need that advice?
Can the participant get that advice in 15 minutes instead of
two hours? " he says. " Also, how easy is it to make changes
[such as a deferral increase] in response to that advice? "
5) Who will supply financial wellness advice. These
days, Duckett says, a recordkeeper can distinguish itself
by taking on fiduciary responsibility for the one-on-one
financial wellness advice it gives. He says most do not, so
it should be asked about in the RFI. He also suggests asking
how the recordkeeper's staff members who give the advice
are compensated. At some recordkeepers, these staffers
earn a commission based on investment choices made by a
program participant they have advised, he says. At others,
he notes, the staffer receives a salary plus a bonus based on
survey feedback from the participants.
At least one large recordkeeper has utilized registered
representatives to have financial wellness conversations
with program participants, during which they sold them
the recordkeeper's proprietary investment products, says
Barbara Delaney, principal and founder of StoneStreet/
Renaissance (SSRBA), a part of Hub International, in Pearl
River, New York. She and her advisory colleagues prefer to be
the ones offering the one-on-one advice. " The recordkeepers
know we're fiduciaries for the plan and they're not, " she says.
" As the adviser, we have the fiduciary processes in place, and
it's a natural extension for the sponsors to trust us to give
that advice to participants. "
But Delaney sees differences in recordkeepers' willingness
to integrate an advisory firm's financial wellness services
with their financial wellness program, so it is good to ask
about it in an RFI. " They have to collaborate with us, " she says.
" We want to make sure we're controlling the participant experience
and that we're co-fiduciaries on it. " That is becoming
an even more urgent issue to resolve, she says, adding, " I
can't tell you the number of employees at our clients who are
thinking about retiring, and there is such a demand for being
able to talk to someone about it. " -Judy Ward
New Investment Possibilities
W
hen evaluating plans with clients,
an adviser can help them understand
new investments they may see
on recordkeeping platforms. Advisers
noted these three types as being
currently of interest to sponsors:
* Collective investment trusts
(CITs). " We're having conversations
educating committees about CITs, now
that those are coming downstream [to
smaller plans] so much more, " Pensionmark
Financial Group's Kristen Deevy
says. " It takes some education. Some
sponsors will ask, 'Can I track the
performance as easily as with a mutual
fund?' And some are concerned that
CITs don't have as long a track record.
On the other hand, there's been a lot of
retirement plan litigation on excessive
mutual fund fees, and CITs are typically
quite a bit [less expensive] than
mutual funds. So I tell committees,
'Let's at least have a discussion about it
and make sure we have the lowest-cost
share class available.' "
* Adviser managed accounts.
Some recordkeeping platforms focus on
offering their own managed accounts;
some offer a managed account service;
and some will partner with advisers
on adviser managed accounts (AMAs),
says Barbara Delaney, of StoneStreet/
Renaissance. She prefers to work with
the last group, she says. " We definitely
see an uptick in interest in managed
accounts, and we also see confusion
about the right type of managed
account and who controls the experience, "
she says. " As the adviser, we
want to control the participant experience
on the account and the [investment
recommendation]
outcomes.
Often,
the recordkeeper controls [both
of those] and we just control the assetallocation
models. "
* ESG funds. " We are actively
adding ESG [environmental, social
and governance] funds to our clients'
investment menus, " says Mark Beaton,
of OneDigital Retirement & Wealth.
" But sponsors need to understand that
the classification of ESG funds is very
loose now: They're basically catch-all
funds. " That makes participant education
crucial, he says. " Participants buy
into an ESG fund and usually don't look
at the fund's underlying investments. "
Some funds have brown stocks among
the green, he says. " Participants need
to understand the specifics of what
they are, or are not, investing in. "
An adviser can work with a
committee to get more clarity on the
right investment boundaries for that
plan's potential addition of ESG funds,
Beaton says. One option is to survey
employees, to see what ESG practices
mean the most to them, he says. " The
other option is for the committee to
decide. In that case, for the adviser, it's
an issue of asking the right questions
of the committee to help it understand
what the ESG products are including,
and what they're eliminating, from
their portfolios. " -JW
planadviser.com September-October 2021 | 21
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