GPS PEP Expands User Base in Deal With Trilogy Financial

Group Plan Systems LLC has added financial planning advisory Trilogy Financial to a network of investment advisory firms that can add plan sponsor clients to GPS’ pooled employer plan offering.

Trilogy Financial, which oversees $3.6 billion in client assets, will have an “investment sleeve” in the GPS Navigator PEP, with its investment advisers acting as the 3(38) investment fiduciary for plan sponsor clients.

The GPS Navigator PEP was launched in 2023, with GPS as the pooled plan provider and July Business Services as recordkeeper and third-party administrator.

It has a unique design in the market as, rather than bringing in plan sponsors itself, GPS Navigator allows financial firms to add their clients to the PEP while they make investment decisions as the 3(38) for those plan sponsors.

“For the right client, PEPs can be an appropriate solution, but we didn’t want to rush to build something just to do so,” said Tom Elkins, senior vice president of the 401(k) & qualified plans team at Trilogy, in a statement. “We can offer a PEP our clients will value, without the time and expense of developing it on our own, and we can serve as the 3(38). It’s an elegant design.”

Elkins noted in the announcement that the firm has “identified several potential employers” for the PEP and said many of the 50 or so small-plan startups it brings on every year may be good candidates.

GPS is a joint venture between the Pension Resource Institute and Waypoint Fiduciary, run by managing partners Jason Roberts, CEO and founder of the PRI, and Pete Swisher, founder and president of Waypoint.

“For RIAs who want to offer a PEP, being able to build an investment sleeve in the PEP gets it off the ground much sooner,” says Annie Messer, vice president of fiduciary services at GPS and president of member relations at PRI. “You can get it up and running and branded much easier—starting their own PEP could be expensive and very time consuming.”

July’s investment sleeve structure allows for the PEP to accommodate multiple 3(38) managers.

Messer also notes that one challenge for RIAs in starting a PEP can be that, if there is not at least one audit-sized plan, small employers will have to bear the burden of the additional audit cost, which can deter them from joining. With the GPS Navigator, plan sponsors can join a PEP that already has large employers sharing the audit cost, with smaller employers benefitting by being part of an audited plan for a nominal cost.

There are currently four investment managers serving as 3(38) fiduciaries within the PEP and one general investment sleeve run by Envesnet Inc., with more in talks to be added, according to Messer. She says GPS developed the structure in part due to demand from members, including registered investment advisers, broker/dealers and banks and trust companies.

“We see it as a great option to create scale, especially for some of the small and midsized RIAs that went to have a PEP offering,” she says.