Time Flies
In This IssueIn this, our anniversary issue, we pick up with the current industry trends surrounding 401(k) fees and adviser compensation. We, as an industry, are in a unique position now that Congress, the courts, and the regulatory bodies are all focusing on the same thing—retirement plan fees. In “The Path Ahead” (page 28), we talk with attorneys, advisers, providers, and investment managers about the current activity in Washington, the courts, and Congress, and get some opinions about what advisers can, and should, do to be proactive about plan fees and their own compensation. We also examine issues of profitability, and some advisers discuss the amount of legwork they do before taking on a client to ensure they are able to make their minimums.
Speaking of Washington, this summer, the final rules regarding 403(b) plans were released (governing nonprofit entities). For those of you who currently work with those plans—or who don’t yet, but have been considering expanding your practice—in “403(b) aware” (page 80), we describe the new regulations and give you some insights about the effects for advisers in both categories. The plans, now with documentation requirements and some motivations to consolidate provider choices, stand likely to resemble much more closely 401(k) plan operations in the future.
Playing FavoritesWho are your favorite investment managers? What about lifecycle and lifestyle fund managers? We asked nearly 200 retirement plan advisers to tell us about how they select and monitor investment options for their qualified plan clients. Performance is still a big driver, as are things like style drift and manager tenure, in their ongoing monitoring process. Further, advisers show clear favorites when it comes to their investment management firms and asset allocation fund suites. Do you share the same tendencies and preferences? Check out “Playing Favorites” (page 38) to find out. On the topic of lifecycle funds, although almost 90% of advisers surveyed recommend an asset-allocation fund type (lifecycle or lifestyle) to their plan clients, there are still advisers who look at such funds as a threat. Whether threat or opportunity, see what the advent and popularity of such funds will mean for some advisers’ practices in “Invest-O-Matic” (page 76).
In the spirit of investments, for years, firms that offer investment management services and mutual funds alongside recordkeeping services have been afforded visibility and traction on plans, sometimes as a result of proprietary fund requirements. However, investment-only shops seem to be making some strides in increasing their foothold in the DC marketplace. Learn what some of their plans are, and what services you might be missing out on, in “Reaching for the Top” (page 64).
The subject of retirement income has been gaining a significant amount of traction in the industry and in mainstream media. The article “Annuity in 401(k) Clothing” (page 56) looks at some new offerings from investment firms wanting to offer a guaranteed income piece as part of a 401(k) plan investment lineup. Are the funds a good idea? Will you encourage your clients to add them to the menu? You can decide after reading what firms like Genworth and The Hartford have to say about their new solutions.
Looking AheadOf course, that’s just what’s inside this issue. As we head into PLANADVISER’s second year, you can look forward to more: more issues (eight), more columnists, and more adviser-oriented research. This year, our columnists have focused on fiduciary and compliance issues, designations, and sales/business practices—are there other areas you’d like us to focus on? As always, our ideas are no good if they don’t help you to do your job better. Please feel free to tell us what you like but, more importantly, what you need to learn more about or what has been over-covered. If you’re interested in contributing an article—or a column—I’d love to hear from you at acooke@plansponsor.com.
PLANADVISER’s accompanying Web site (planadviser.com) and e-newsletter, PLANADVISERdash, also will see some changes. We strive to keep the site an up-to-date resource with the latest news and headlines, product announcements, and industry deals. If you have a deal you’ve made that you want other people to hear about—a hire, winning an RFP, introducing a new service—we want to know. When you go online, are there tools or research that you would like access to? We’ve just launched our Target Date Fund Research Suite—in response to comments from advisers looking for help in comparing the burgeoning number of offerings in the space. Our goal is to be your “go to’ resource on the Web—what do you need for that to occur?
Annual Conference
As we go to press, we’re also heading to PLANADVISER’s first national conference. I’m looking forward to reconnecting with many of you—and meeting some of you for the first time.
All in all, it’s been a remarkable year for advisers, and a great start for PLANADVISER as your partner in anticipating, and responding to, change. However, we know that our continued success relies on our ability to address your needs with respect to maintaining a successful practice with happy clients. I look forward to your ongoing feedback.
Thanks for reading PLANADVISER. I wish you luck in applying the ideas presented here to your business, and I look forward to working with you in the future.