Deals & People September 6, 2023

Alera’s Retirement Unit Adds Financial Wellness Director

Alera's retirement and wealth services divisions also name new chief investment officer.

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Alera Group Inc.’s retirement plan services division announced Wednesday that it has hired Matt Rafeld to a newly created role as director of financial wellness, part of a push to provide the full range of services to plan sponsors.

Rafeld comes to Alera from Edelman Financial Engines, where he was also director of financial wellness. He will report to Christian Mango, Alera’s executive vice president and national practice leader for retirement plan services, according to the Deerfield, Illinois-based firm.

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Matt Rafeld

“Matt’s hire is part of a larger strategic effort to provide more holistic solutions to our clients as more employers recognize that the workplace has become the financial hub for many Americans and that offering employee financial wellness programs reduces financial stress, increases productivity, and helps companies attract and retain top talent,” Mango said in a statement.

Alera will be joining other retirement plan advisories and recordkeepers in building out its own national financial wellness program in coming months, Mango said in the announcement.

“Across Alera Group, we are committed to meeting the evolving needs of our clients and their employees, and that increasingly involves active support for employees’ financial wellbeing,” he said.

The move comes shortly after Alera announced another new hire as a senior retirement plan consultant: Bryan Hissong, formerly of Arthur J. Gallagher & Co., joined the firm in July to work with large defined contribution, defined benefit and nonqualified plans.

Rafeld spent 10 years at Edelman Financial Engines as a financial wellness instructor and director of its wellness program.

“We want to help retirement plan participants and employees more broadly navigate concurrent goals, whether that’s establishing and funding emergency savings accounts, saving for their children’s education, or saving for their own retirement,” Rafeld said in a statement.

Mango also came from financial wellness, having joined Alera in 2022 from a role as president of Financial Fitness for Life.

New CIO 

B.J. Webster

Alera also announced on Wednesday the creation of a new chief investment officer role for its wealth services and retirement plan services divisions.

B.J. Webster, a managing partner of Pennsylvania-based Wharton Business Group, an Alera Group company, will assume the CIO responsibilities alongside his continuing work with clients, Alera announced.

“With B.J.’s leadership and guidance, we will provide a unified investment platform for a consistent client experience and easy access to broad investment options,” Tina Hohman, executive vice president and national practice leader of Alera Group Wealth Services, said in a statement.

Webster co-founded Wharton Business Group in 1992 and has worked in portfolio evaluation, investment policy development, manager selection, security selection, portfolio rebalancing and investment fee analysis. Alera acquired Wharton Business Group in 2022 along with multiple other wealth services and retirement plan services offices, according to the firm.

Alera’s wealth services group oversees more than $7.5 billion in assets under management, and its retirement plan services unit advises on about $7.5 billion of assets.

Compliance September 5, 2023

SEC Charges 5 Advisory Firms for Custody Rule Violations

The rule violation announcement is the second the regulator has issued in a ‘targeted’ effort, even as it seeks public comment on a proposed broadening of the custody rule.

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The Securities and Exchange Commission on Tuesday announced charges against five investment advisories for failing to comply with requirements related to the so-called custody rule, or safekeeping of client assets, as laid out in Rule 206(4)-2 under the Investment Advisers Act of 1940.

The charges come even as the SEC weighs renaming it the safeguarding rule and broadening its footprint to account for what the regulator has described as advancements in the investment space. The regulator re-opened the comment period for that revised definition on August 23.

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According to Tuesday’s announcement, the five firms failed to do one or more of the following: have audits performed; deliver audited financials to investors in a timely manner; and ensure a qualified custodian maintained client assets. In addition, two firms were charged for failing to promptly file amended Forms ADV to reflect they had received audited financial statements, and one firm did not properly describe the status of its financial statement audits when filing its Form ADV.

The advisory firms are: Lloyd George Management (HK) Ltd; Bluestone Capital Management LLC; The Eideard Group LLC; Disruptive Technology Advisers LLC; and Apex Financial Advisors Inc.

“The Custody Rule and the associated Form ADV reporting obligations are core to investor protection,” Andrew Dean, co-chief of the SEC Enforcement Division’s asset management unit, said in a statement. “We will continue to ensure that private fund advisers meet their obligations to secure client assets.”

According to Tuesday’s announcement, all five advisory firms agreed to pay civil penalties ranging from $50,000 to $225,000 to settle the charges. The firms neither admitted nor denied the findings but agreed to be censured and to cease and desist from violating the respective provisions, in addition to the penalty fees.

This is the second set of charges the SEC has brought as part of its “targeted sweep concerning violations” of the Custody Rule after charging nine advisory firms in September 2022, the regulator noted.

The SEC re-opened its comment period on the proposed revision to the custody rule, which had initially ended on May 8, after receiving widespread industry pushback and questions, including suggestions that the new rule would unnecessarily widen the umbrella of regulation for many adviser-led asset investments.

In May, the Investment Adviser Association argued that the amended rule would bring under SEC audit and reporting: digital assets, real estate and physical commodities that could “make those other assets difficult to transact in.” The organization described the rule as “a huge sea change” for custodians, advisers and accountants.

Public comments on the proposed rule changes can be submitted, as well as read, on the SEC’s website.

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