Recordkeepers Talk Collaboration, Challenges in Adviser Relationships

Recordkeeper leaders say relationships with plan advisers work best when the adviser has a good sense of where they want to take their practice and know what they need from the recordkeeper to achieve those goals.

“The advisers that we work best with have a sense of where they want to take things and how they want to grow their practice,” Jason Crane, head of core retirement at Ascensus, told an audience of advisers at the PLANADVISER 360 national conference on Monday in Scottsdale, Arizona.

Adviser Kim Cochrane, director of client services at Hub International Retirement and Wealth Management, who was running the session, was on the recordkeeper side before becoming an adviser. She asked the group of recordkeeper leaders what they see great advisers do to ensure a productive relationship.

Crane noted that, historically, plan advisers could grow incrementally one new plan sponsor client at a time. But today, the fee compression that has hit recordkeepers has also made its way to advisers, who are now seeking growth in other areas, including ancillary benefits and wealth management. That has made good advisers “really intentional about where [they] want to grow the business, which enables the recordkeeper to help you identify the right solutions.”

Colin West, senior vice president of sales, at Fidelity Investments, stressed the benefits that can come when an adviser works with the recordkeeper before going to a retirement plan committee or strategy meeting with a plan sponsor client.

“Our managing directors are relationship managers,” West said. “They want access; they want to be able to have some value add for the client. So really good advisers have that meeting [with Fidelity], not necessarily five minutes before in the parking lot [before seeing a client], … but they do something in advance that is intentional and allows us to go in together and share [stories] that complement each other.”

Beyond the Plan

West also stressed that the Fidelity partner is not there to offer everything to the client, but to take the adviser’s lead if they are offering ancillary services or consulting beyond the defined contribution plan.

“If you have the ability to offer insights with respect to health or with respect to equity compensation plans or with respect to donor advised funds or charitable giving—whatever it is—we’ve found that clients want that to come from one person, and, ideally, it’s you, the specialist,” he said. “That’s where, versus maybe the casual adviser, you have a really big leg up.”

Melissa Doucette of Principal Financial Group, stressed that advisers can also work with the recordkeeper to learn or grow in other areas, such as employee stock ownership plans or defined benefit pension risk transfers.

“We have experts in all those areas,” said Doucette, Principal’s national sales director for strategic relations, retirement and income solutions. “You don’t need to be the expert. We can help you prospect and will help you set up that meeting. … So lean on the resources you have access to.

Cochrane also asked the recordkeepers about the other direction—areas when relationships with advisers go bad.

Crane, of Ascensus, said the relationship works best when advisers have “realistic expectations of their recordkeeper,” with a goal of working with them and using their resources, rather than just driving down the cost.

Kurt Ritter, a consultant relations director at Voya Financial, said it is best when an adviser can drill down into the needs of the particular workplace they are serving to keep the costs in line with the services.

“We focus on keeping things at the work site and in-plan … because we think that drives the costs down as well,” he said.

For instance, Ritter said, his team will work with an adviser to price out an additional offering separately, such as a nonqualified plan, rather than lumping it in with the DC plan and potentially charging a higher fee.

Wealth Coordination

Cochrane queried the recordkeeper leads about the tension between advisers and recordkeepers in getting wealth services clients from the plan..

The recordkeeper panelists stressed that they are partners in working with advisories interested in wealth management services.

Doucette, of Principal, said the firm had not gone out to spend money on a wealth division, but instead had a robo-advisory service and otherwise looked to partner with advisers on wealth leads if that is their business model.

West, of Fidelity, noted that his firm has a program to work with advisers to identify participants who may be interested in wealth services, including sharing relevant information from the plan.

A member of the audience later challenged West, saying that they had experienced Fidelity calling up clients in a plan they advised.

West responded that, more than a decade ago, Fidelity had a program like that, but it had been stopped, and Fidelity now works with advisers interested in providing wealth services, not undercutting them.