PLANSPONSOR Retirement Plan Adviser of the Year

2011 PLANSPONSOR Retirement Plan Adviser of the Year 

James L. Worrell, GPS Investment Advisors, LLC, a Member Firm of 401(k) Advisors 

James Worrell, Founder and President of GPS Investment Advisors, LLC, a Member Firm of 401(k) Advisors, in Providence, Rhode Island, was exposed to the retirement plan business early on; his father ran one of New England’s largest third-party administrator firms in the ’70s, ’80s, and ’90s. However, Worrell was not planning on going that route, going to law school at night while working for a mutual fund company that also provided retirement plan recordkeeping. However, as he was getting ready to graduate, he was offered a wholesaling job in Atlanta and took it, putting law on the back burner.

In 2000, Worrell left wholesaling because he was getting tired of the ending relationships of sales. “As a wholesaler, you are in for the close and then are gone,” he says. “The consultative piece [of being an adviser] was attractive to me.”

He moved back up north and joined a firm called Financial Architects Partners, which was an HNW life insurance firm, with just $12 million in pension assets under management, something Worrell saw as an opportunity for growth. However, after several years there, it seemed to him that members of the firm were going in different directions, so, in 2007, he founded GPS Investment Advisors.

The firm’s name came from Worrell’s mission;

“A compass tells you direction,” Worrell says, “but GPS takes you there.” His philosophy, he says, is to provide advice and guidance to clients to allow them to effectively carry out their responsibilities and manage their retirement assets. Like the GPS in your car, he decided he wanted to give individuals direction—to help them plan, save, and invest wisely to get them to retirement. His practice has grown to include 45 plans and $400 million in assets under advisement.

Soon after he founded GPS, he began leveraging resources from what is now Retirement Plan Advisory Group, a private-label toolset from 401(k) Advisors. In fact, Worrell was using that system when he was approached by 401(k) Advisors about being a member firm. He decided that was the right thing to do and is now a Managing Director of 401(k) Advisors.

In addition to Worrell, GPS has three members. Philip Dancause, Client Service Manager, helps to create and oversee each client’s individualized client service plan assisting clients with various needs. He also is involved in the firm’s investment research. Elisabeth Hickox, Marketing and Client Relations Manager, provides support to all areas of the GPS team, and helps identify new marketing and client opportunities. Whitney Wheeler, Client Services Coordinator, supports the team on a day-to-day basis and assists with quarterly reports and investment reviews, preparing for client meetings, marketing, and client service.

Distinguishing Characteristics

From inception, Worrell wanted his firm to bring fee-for-service consulting to plans in the less than $10 million space and says he is often distinguished from other advisers in the same plan space by his desire to get involved with plan design and document work. His consultative approach includes all aspects of the plan: plan design, fiduciary responsibility, benchmarking and evaluating fees and costs, monitoring investments, and providing employee education.

GPS is providing its plan clients with annual fee disclosures and fee benchmarking, and Worrell says he is increasingly moving toward using the lowest-cost share class, even if it doesn’t include revenue sharing. While that may necessitate charging an explicit fee in its place, Worrell says he believes a participant or fiduciary would want to know what they are paying for and that any potential downside of potential participant confusion from the display of that fee on statements is outweighed by the transparency. Further, Worrell adds, “When participants know they are paying us for advice and guidance, they may be more likely to use our services when we are onsite for enrollment, one-on-one or group meetings, or contact us directly—all of which helps them save and invest better for retirement.”

Plan design features promoted by the Pension Protection Act (auto-enrollment, auto-escalation, use of qualified default investment alternatives) are all things Worrell says he promotes with his plan clients as an effective way to achieve plan goals.

In addition, as it relates to plan design, Worrell helps his clients analyze how company hiring, raises, and review practices affect a retirement plan’s success and ability to reach goals. “We encourage quicker plan eligibility and more frequent plan entry dates to capture new hires before they lose momentum on saving a portion of their pay,” he says. “We encourage managers to raise the issue of deferral increase during salary and performance reviews and at the time raises and bonuses are given.”

Worrell also works with managers and other company leaders in helping to promote participation in the plan and attendance at 401(k) meetings. “We have conducted ‘Train the Trainer’ meetings for clients to educate management-level personnel and company leaders in the features of the company retirement plan so that they can promote it from within,” he explains.

A Passion for Participants

Worrell and his company offer both onsite group and one-on-one employee meetings to offer guidance directly to plan participants. He believes in making things as easy as possible for participants. For example, he has worked with vendors to create postcards or mailers that have a “tear-off” section for the employee to fill in the blank or circle an action to join the plan, increase the deferral, or change the allocation. When onsite for meetings, Worrell says, he arranges to have phone or Web access to accomplish the changes discussed with participants. He leads participants through the process of making changes to their accounts, whether shadowing them while they call the plan provider’s phone number or visit the Web site.

Worrell also has created what he calls “Action Sheets,” promoting simple actions like joining the plan, increasing deferrals, or reallocating money, that let him capitalize on the momentum created with participants. “If a participant expresses intent,” he says, “we can follow up later.” Where the recordkeeper is able to provide gap analysis reports, Worrell will use them to motivate participants to make changes to close their gap.

Continuing its emphasis on helping participants, this year GPS introduced its “Total Financial Fitness” program, rolling it out to all clients and their more than 6,000 retirement plan participants. The program is a monthly Webinar on the last Wednesday of each month for 45 minutes in the afternoon, addressing various financial topics, not just the 401(k) but also college savings, wills and trusts, banking and credit, and insurance.

In order to measure his company’s efforts better as they pertain to plan participant education, Worrell and his team developed “The Employee Meeting Report.” The report accomplishes two objectives: It documents for a client’s fiduciary file the employee education efforts, and it measures the results of the meetings. With the report, Worrell can report, in a standardized way, how many people GPS met with, whether they were participants or eligible nonparticipants, what material was presented and by whom, how many subsequently joined the plan, how many increased their deferrals, and how many changed their allocations. The Employee Meeting Report measures results by capturing the number of meeting attendees and breaking it down by number of newly eligible, number of currently participating, number who changed their allocation, number who joined the plan, and the number who increased their deferrals.

“We want to see 100% of participants saving up to the match, 100% of participants diversified in a way appropriate to their age, and 100% of participants participating,” he says.  —Alison Cooke Mintzer  

2011 PLANSPONSOR Retirement Plan Adviser of the Year Finalists 

Sean Deviney, Provenance Wealth Advisors, LLC, Fort Lauderdale, Florida  

Provenance Wealth Advisors was formed in 2000 by three partners who worked together. While working for SEI investments­ as an institutional wholesaler, Sean Deviney called on the firm, which had no one focusing on retirement plans, although there were about 25 plans on the books. In 2005, Deviney joined the group to build the practice and, since then, the retirement plan business at Provenance has grown to more than $100 million in assets under advisement and more than 100 plans, with a median plan size of $3 million.

Many of the Provenance clients are professional groups that want plan designs that help them maximize deferrals or help with tax planning. Therefore, Deviney says he gets very involved in that process, working with third-party administrators to develop custom designs for each client.

Deviney personally handles all aspects of the retirement plans department, doing all the plan sponsor meetings, employee seminars, and one-on-one participant meetings. In addition to delivering quarterly trustee meetings, he sets up a service schedule for each client that outlines what needs to be covered for the year. Additionally, he provides each plan sponsor and committee with a detailed fee summary, including any wrap fees, mutual fund expenses, TPA fees, and other expenses for the year.

For some trustee-directed profit-sharing plans, Deviney has compiled summaries of the investment decisions made at the trustee/committee level for sponsors to distribute to participants. “This has been effective in conveying to the participants the depth of the decisionmaking process and the results of those decisions,” he says.

To ensure participants are getting the most out of their retirement plan, Deviney focuses on the importance of “taking ownership of your retirement,” he says. All plans he works with offer asset-allocation solutions, something he encourages plan participants to use. “Too few participants are educated enough to build an appropriately diversified portfolio that is aligned with their risk tolerance and time horizon, let alone dedicated enough to continually manage their portfolios,” he explains.

One of Deviney’s passions is putting the plan into “plain English” for the participants. “People throw out technical terms,” he says, “but the 401(k) plan does not have to be intimidating.”

Gregg L. Fine, Gallagher Benefit Services, Boca Raton, Florida  

While in college, Gregg Fine interned at Equitable Financial, cold-calling companies and individuals selling them various services and insurance, respectively. He was offered a job post-college, accepted, and got licensed. A friend of his, working at Wyeth Lehman, was an enroller doing enrollment meetings for 401(k) and 403(b) plans. Fine decided to join him and they built a large TPA and 401(k) advisory shop.

In May of 2006, Fine decided to sell his business to Gallagher Benefits Services. “I wasn’t necessarily looking to sell,” he says, “but it was a good fit.” As one of the largest insurance brokerages, Gallagher was mostly a health and welfare, property and casualty shop, he comments, which gave his team an entrance to health and welfare. The vast majority of his practice (90%) is in 401(k) and 403(b) plans, with a small portion of private clients.

Fine says one of the biggest values he believes he adds to his retirement plan clients is fiduciary risk mitigation. Although he does not sign on as a fiduciary to the plans, he helps his clients ensure they are doing everything they can to mitigate their risk, he says. “Most [plan sponsors and committees] don’t have proper processes and procedures in place,” he says, and he works to ensure those get put in place. The risk mitigation process Fine goes through with clients includes: establishing administrative and investment committees, board resolutions, bylaws, acknowledgement letters, fidelity bonding, and fiduciary liability insurance. This enables the plan sponsor and other committee members to better understand and fulfill their fiduciary obligations and duties. Fine is helped with this by the CEFEX certification held by Gallagher Benefits Services, he says.

“I have a large team behind me,” he says, so he is able to move the individual clients out to others on the team. Having the affiliation with Gallagher Benefits Services allows him to have “a practice that is national in scope and local in touch,” he says.

2011 PLANSPONSOR Retirement Plan Adviser of the Year Finalists continued: 

John W. Spach, 401(k) & 403(b) Advisors-Los Angeles, Woodland Hills, California  

John Spach founded 401(k) Advisors and 403(b) Advisors after deciding to specialize in qualified plans. “I loved working with business owners and employees,” in a business that was not transactional, he says of deciding to leave his prior job as an insurance salesman. He wanted to fill what he saw as gap; advisers often were tied to specific vendors and plans were not being supported in a way that allowed them to take advantage of the most current capabilities.

In order to learn more about the inner workings of retirement plans, Spach linked with a third-party administrator who lent him office space; “I’d come in once a week and he would teach me plan design,” he says. About five years in, Spach was put in touch with Vince Giovinazzo of 401(k) Advisors. Spach says Giovinazzo had an “unbelievable big picture” story and he “challenged me to identify what I did and didn’t want to do.” A couple of years later, Spach partnered with 401(k) Advisors and, a month after that, he sold the biggest plan he’d ever sold, convincing him he made the right choice. “401(k) Advisors gave me the confidence to move up market,” he says. The resources provided by 401(k) Advisors “freed me up to go out and market,” he says.

In 2008, Spach heard people speak about the changes occurring in the 403(b) plan marketplace and saw an opportunity for growth. He hired someone that year who had been director of all community outreach programs at a mega-church in southern California, and had been in contact with every major nonprofit from Santa Barbara to San Diego. He added 403(b) Advisors to the firm’s name to connect better to the marketplace, and began his push into serving 403(b) plans. Although 403(b) plans are only about one-quarter of his retirement plan business, he does expect that to “blow wide open” in 2011.

Philip Steele, Pension Architects, Malibu, California  

True to the name of his firm, when Phillip Steele wants something, he builds it. He believes in open architecture, so much so, that he built his own platform. All of his clients are unbundled plans that are recordkept by Colorado-based third-party administrator DRS, and clear through Schwab Institutional. Steele works with those partners because they allow his Pension Architects team to customize clients’ plan design fully —flexibility he says he could not get with a large national bundled provider.

Steele also has worked with Hand Benefit and Trust to create a suite of collective trusts that are managed actively. The Pension Architects team selects a pool of 25 to 30 investment management companies (including mutual funds and ETFs) and five portfolios are created. This allows the firm to include diversifiers that normally wouldn’t be available on a core menu, such as commodities, because Pension Architects can control the exposure. The company also is working with Fiduciary Benchmarks to develop tools for the education team, Steele says. “We’re more proactive creating our own tools, not looking outside,” he says.

Steele’s open architecture model includes a high-touch financial planning component, requiring individual participant meetings. Although the company does not do wealth management, it does individual participant advice delivered by a team of full-time educators who do nothing but travel to clients and deliver onsite individual meetings.

One initiative Steele has been working on is to deepen the emphasis on education for the committee and the plan sponsor, making it “as intense” as that for the participants, as well as “making sure that they’ve bought into our methodology to make sure we get the support we need,” Steele says.

Not only does he want support from the committee and the plan sponsor, but from middle management of those plan sponsor firms to help sell the approach to the plan participants. For example, when bringing on a recent client with $100 million with 2,000 participants across 13 locations, Pension Architects spent 90 days during the design phase of the plan implementation so the team could have influence on and with middle management, explaining the time commitment and access to participants, among other things.

PLANSPONSOR Retirement Plan Adviser Team of the Year 

FDG Institutional Consulting Group at UBS 

“Our goal is to exceed client expectations every time,” says Phil Fiore of the FDG Institutional Consulting Group at UBS in Stamford, Connecticut. Fiore and the other team members say their mission is “to provide clients and participants with access to the knowledge, experience, insight, and support required to make informed and confident decisions.”

The FDG team has six financial advisers: Phil Fiore, Stephen DesRochers, Jeff Farrar, Dean Gaugler, Lou Gloria, Thomas Gahan. Although all six work with both retirement plan sponsors/institutions and private clients, they each have a primary focus/role. Fiore and DesRochers focus almost exclusively on retirement plan consulting; Farrar, Gaugler, Gloria, and Gahan focus on both private client consulting and retirement plan consulting; and Gahan has a niche focus on nonqualified retirement plans.

Working alongside the advisers are Michael Maggi and Christopher Foster, the investment analysts for the team. Foster focuses on institutional and retirement plan consulting business, while Maggi focuses on the private client business. The team’s two sales assistants, Angela Kelly and Melody Voyak, provide internal operational support for both sides of FDG’s practice.

Team Origins

Fiore and DesRochers both honed their craft at Prudential Securities in Hartford, Connecticut, Fiore doing defined benefit investment consulting and DesRochers working in the 403(b) marketplace. In the mid-1990s, they decided to collaborate and go after business together. The first few hundred million in assets under advisement came from government and nonprofit entities and then, after the crash of 2000, Fiore says, 401(k) plan sponsors started realizing they needed more help dealing with nervous participants. To this day, nearly two-thirds of the firm’s business is with 403(b) and 457 plans, though nearly all of their new business is 401(k) plans, Fiore says.

In 1999, they moved their office to Westport, Connecticut, still at Prudential Securities (which was bought by Wachovia in 2003). In 2005, the team moved to Merrill Lynch and then moved to UBS in April 2009. They moved their business to UBS in 2009 partly because of the toolset UBS was offering to retirement plan advisers like them, which, Fiore notes, allows them to serve as co-fiduciary. The advisers on the team always believed they were fiduciaries with the plans they worked with, at least the ERISA plans, comments DesRochers, so being able to say that to their clients was important. Most of their clients are ERISA plans, as many of the 403(b) plan clients are electing to fall under ERISA, he says. However, they do have some non-electing church plans that are not subject to ERISA, he notes.

Team members agree they are not the “cheapest game in town.” However, says Fiore, it’s like staying at a 5-star hotel: “You get what you pay for.” FDG charges a flat fee based on services rendered; each client gets to select what services it wants from the team’s menu. When the team takes on a new client, “we sit down and find out what services they want and when,” says DesRochers. Then, the team puts together a minimum package it is comfortable with for each client, he explains, and the clients can add to that package if they would like.

The team also has been able to help clients with their plan fees through the use of ERISA budget accounts, whether used as a conduit to reallocate unused revenue-sharing dollars to participant accounts, or to offset other plan expenses. In fact, in 2010, FDG claims to have returned to clients approximately $170,000 in lower fees or funds available via those mechanisms.

The team’s newest member, Thomas Gahan, has helped the team with its recent initiative around nonqualified plan implementation (including supplemental executive retirement plans, top hat plans, and excess benefit plans). Although nonqualified plans are still only about 5% of the team’s client base, FDG has begun consulting on plan design, funding analysis, and implementation of these plans. The team is working with clients’ tax advisers and legal counsel to determine the correct accounting entries along with monitoring their compliance with 409A regulations.

Dual Focus

Fiore says the team’s dual focus on retirement plans and private wealth management provides “a great balance” and offers significant value to its clients. The private client practice lends an understanding of client and participant­ concerns and emotions to the institutional practice, allowing team members to better educate investment committees about what their participants are feeling, and what they should be thinking about for tomorrow. Two to three advisers attend every client meeting and participant education session.

The Certified Financial Planners (CFPs) on the team also are positioned to offer participant education to those individuals who seek greater clarity and understanding with respect to their retirement savings. FDG offers a phone counseling service for client plans that allows participants to call the team’s Stamford office at their leisure and speak to the in-house CFPs about any financial issues or technical questions, explains DesRochers. “We tell our [clients’] HR departments, our 800 number should be the first call,” notes Fiore.

The phone bank is open while the office is open, but meetings also can be scheduled for nights and weekends. It is impossible to see every participant at the firm’s larger clients, even when doing meetings, says Fiore, so the phone bank provides another touch point. “We are here to help them think through the reality of the situation and help them make a decision that is fiscally responsible rather than emotionally expedient,” says Fiore.

That 800 number is in addition to the team’s onsite educational efforts, things the team notes are not “typical” enrollment meetings. FDG prides itself on in-depth discussions with participants to ensure they understand not only why it is important to be active in the retirement plan, but also how they can do it.

The team spends extra time with two specific participant groups: those new to their careers and those toward the end of their working lives. Those participants are dealing with emotional ties to their decisions, Fiore says. Those new in their careers generally have not had much market experience and have to understand the need for saving and investing, while those planning their exit from the workforce must understand whether they can retire, what that will look like, and the various complexities that come with that decision.

Client Service

In addition to the annual client service schedule, FDG benchmarks the fees of each client plan every three years, or when the plan size or average participant balances cross key pricing points. The process begins by submitting a blind RFI to multiple vendors with the results compiled to show the client a qualitative and quantitative comparison. If substantive fee differences are noticed, FDG looks into the offering available under the new provider. If the potential plan option seems appropriate, the provider is interviewed to ensure all plan complexities or specifics have been discussed.

The team has a 24-hour rule within the operation for plan sponsors and participants, meaning that the team will respond to any client or participant contact or request within 24 hours, though many times it is by close of business the same day, says Fiore. “We tell our clients, ‘We are part of your staff but not on your payroll,’” says Farrar. —Alison Cooke Mintzer  

Retirement Plan Adviser TEAM of the Year Judges 

Nevin Adams, Global Editor-in-Chief, PLANSPONSOR 

Steff Chalk, CEO, Fiduciary Consulting Group 

Alison Cooke Mintzer, Executive Editor, PLANADVISER 

Ryan Gardner, representing Fiduciary Investment Advisors, LLC, 2009 PLANSPONSOR Retirement Plan Adviser Team of the Year 

2011 PLANSPONSOR Retirement Plan Adviser Team of the Year Finalists 

Institutional Investment Consulting 

Michael Kozemchak, Tony Ciocca, Barry Stoey, Paul Stevens, Greg Cimmino — Bloomfield Hills, Michigan

Institutional Investment Consulting was established in 2003 “out of necessity,” Founder Michael Kozemchak says. He had been working in a wirehouse environment where, he says, “no one understood the institutional consulting world.”

First to come on board was Tony Ciocca. Over the years, Greg Cimmino, Barry Stoey, and Paul Stevens came on board. While the team has five advisers, all of whom are considered “rainmakers. “Everyone does everything,” he says. “There is no concentration of responsibilities.” Further, the team setup means each plan sponsor client works with at least two consultants.

The team’s focus is mostly in the large market, offering plan design and document support, oversight of plan communications, corporate governance support, vendor management, and investment analytics.  “Our team serves as taskmasters allowing the committee to leverage their time and remain focused on their core business,” Kozemchak notes.

With 30 clients (and 37 plans, as IIC has clients with which it works on multiple plans), the IIC team works with 21 providers. This means all team members are “extremely well-informed about provider strengths and weaknesses,” Kozemchak explains. Part of this knowledge comes from an ongoing focus on benchmarking qualified and nonqualified plans.

2011 PLANSPONSOR Retirement Plan Adviser Team of the Year Finalists continued: 

The Ratay Group at Morgan Stanley Smith Barney 

Mark Ratay, Daniel Peluse, Chastity Peterson — Lisle, Illinois

In the early ’90s, Mark Ratay started his focus on retirement plans, working mostly with very large pension funds helping them to find investments, slowly moving into 401(k) plans. These days, Ratay and Daniel Peluse, who joined the firm as an intern back in 2001, are working with about 37 401(k) clients, with which they are full-retainer consultants helping with all aspects of the plan: plan design, education, and investment monitoring. They still have a handful of pension plan clients and also work as investment-only consultants for a few clients, Peluse explains.

“We are very hands on with clients,” Ratay notes. “Our goal is to help protect them as fiduciaries.”

Ratay and Peluse are Corporate Retirement Directors (CRDs) and, within the Morgan Stanley Smith Barney organization, The Ratay Group and other CRDs are available as resources to advisers that do not specialize in retirement plans. Those advisers can pick which CRDs they want to work with when they find a retirement plan client (a plan with either $25 million or more in assets or a publicly traded company). Their goal is to add three to seven plans annually, and not just from the Chicago area. “We’ll go wherever advisers’ clients are or opportunities are,” Peluse says.

In those arrangements, Peluse and Ratay act as the core advisers, but they have revenue-sharing agreements with the other advisers Ratay explains.