RiXtrema will be revamping its FiduciaryOptimizer platform by
utilizing retirement plan benchmarking, red flag data, and other
features introduced through a partnership with Larkspur Data. RiXtrema in turn
will provide Larkspur Data with value-added information about aggregate plan
saving, annual percentage rate savings, and diversification ratings for
complimentary use by Larkspur Data's clients.
The IRA FiduciaryOptimizer is designed to help clients comply with the upcoming Department
of Labor (DOL)’s Conflict of Interest rule by helping advisers servicing retirement
plans to analyze clients’ best interests, as well as fee reasonableness. Also
known as the fiduciary rule, the DOL policy goes into effect in April 2017.
Larkspur Data will supplement RiXtrema's existing data
sets. These currently consist of Plan Screener, based on the plan's schedule of
assets reported along with Form 5500; and FeeComp,
a database of advisers' fees based on their Form ADV Part 2.
"The Larkspur Data team is expert in retirement plan data,
providing information on more than a million plans in the U.S.," says RiXtrema President Daniel Satchkov, CFA. "Their database is a robust, value-added
enhancement to our system, enabling advisers to pull in needed data with just a
couple of clicks."
Satchkov adds, "Plan advisers frequently find that
participants could not, or would not, obtain required disclosures from plan
sponsors. The recent DOL FAQ clarification on best interest documentation under
the fiduciary rule explicitly states that if advisers cannot obtain the plan
sponsor disclosure on current out-of-pocket retirement fees, then advisers can
use the plan's annual reporting and benchmarking data."
The IRA FiduciaryOptimizer also produces a report summarizing why
a rollover would be the best interest of the client. Reports can be generated by
individual advisers, or by a home office compliance team using an administrator
portal to manage outcomes for all advisers/representatives with the firm.
Larkspur Data will also power RiXtrema's 401kFiduciaryOptimizer, a
separate part of RiXtrema's platform that is used to win business in the plan
"At Larkspur Data, we've analyzed every plan filing for the
past 10 years (over 10 million in total) using 90 different 'risk'
factors," says Robert Morris, vice president of Operations. "Our
research has revealed that roughly one-third of all retirement plans are either
out of compliance or have significant operational flaws. With this integration,
advisers will be able to quickly access data that will enable them to
effectively leverage the power of RiXtrema. The quantitative data that RiXtrema
will provide us will help our clients gauge whether the plans they are
researching are following best fiduciary practices in their investment menu
RiXtrema’s move follows a recent trend which shows that advisers
are increasingly turning to technological solutions to remain complaint ahead of the DOL rule.
Founded in 2010, RiXtrema is a portfolio
crash-testing company that helps advisers discuss risk with clients. Larkspur
Data is a provider of targeted data and market intelligence
for financial advisers in the 401(k) and qualified plan industry.