New Retirement Firm Aims to Partner with Generalist Advisers

During more than a decade of work in the wholesale retirement plan space, Shane Hanson saw a problem: The general financial advisers he was selling to were often not able to fully meet the needs of the plan sponsor and plan participants.

“I would come across generalist advisers who needed to close a plan, and I would come in to help them,” Hanson says. “The issue is that at the end of the day, you can only be so many things to so many people. … I knew when I left that the plan sponsor was not truly being serviced.”

Hanson says that after seeing hundreds of these situations, he saw an opening in the market to provide retirement services to smaller advisers overseeing about 10 to 15 clients. If he could provide the 3(38) fiduciary investment services, along with back-office support, he believed the advisers could focus on client relationships and “higher-fee” areas such as wealth management and insurance.

Those generalist advisers “are trying to do the best that they can, but they just don’t focus on the space or have someone on their team who specializes in it, so they struggle with scale and being bogged down by the day-to-day needs,” he says. “If we can provide that solution, they can focus on their wealth management or financial advice or insurance, and we will take care of the plan sponsor and participant.” 

Freedom

Shane Hanson.

Last Thursday, Hanson and his business partner, Cristina Hansen, made his vision reality by launching a retirement consulting firm called Freedom Fiduciaries LLC, overseeing about $200 million in client assets with six staff members.

The firm, based in Boise, Idaho, is offering advisers ERISA 3(38) services, as well as what it calls the Bac(k) Office solution to handle the “day-to-day minutiae” of retirement plan servicing, including service issues, payroll consulting and plan design discussions.

Freedom Fiduciaries is also offering participant communication and engagement tools to be used by advisers and plan sponsors, namely ParticipantIQ for participant communication and FiduciaryIQ for fiduciary training and guidance for sponsors.

“Over the past decade, the retirement plan industry has evolved and now demands a specific skill set from retirement plan specialists,” Dick Darian, the CEO of retirement industry consultancy Wise Rhino, said in a statement with the announcement. “The need for a robust back-office solution has never been greater and will only increase as the industry becomes more specialized and complex.”

For the Assist

Hanson says Freedom Fiduciaries is looking to work alongside advisers in a split-fee model depending on what services are requested. The retirement adviser, who was the captain of his college basketball team at Chaminade University of Honolulu in 2010-11, equates the relationship to a sports team.

“Our role on this team is to specialize in consulting on the retirement plan and letting that partner adviser shine with what they are best at, which is going after that ancillary business, which is looked at as a higher-margin business,” he says. “They have the relationship with the business owner, and that’s why the adviser is in the plan.”

In the current plan landscape, large retirement advisories and insurance and benefits aggregators are setting a torrid pace acquiring wealth managers, with the goal of providing the full range of services to employers. Meanwhile, small retirement plan providers are inking deals with registered investment advisories to provide retirement plan backing for clients.

Hanson sees the firm servicing those financial advisers and broker/dealers who fall through the cracks. The big aggregators are not, in his view, looking to acquire an adviser who is managing 10 to 15 employer clients.

“They are not on an acquisition spree for the everyday 10-15 plan adviser,” Hanson says. “Who is going to help these advisers? I’m looking to fill a gap in the marketplace.”