PANC 2017: Understanding Adviser Tools and Support

Advisers on the “Understanding Adviser Tools and Support” panel at the 2017 PLANADVISER National Conference (PANC), Thursday, ran through a host of applications and tools that they described as “game changers” and observed that service providers—including recordkeepers, investment managers and defined contribution investment only (DCIO) firms—are constantly developing new ones.

Asked what tools he likes for advising retirement plan sponsors and participants, Stace Hilbrant, managing director of 401k Advisors in Chicago, said he finds Morningstar Workstation invaluable for supplying him with mutual fund performance data and market commentary. “I spend five hours preparing for meetings [with retirement plan committees],” Hilbrant said. Morningstar Workstation shows him “how funds are constructed. It is ‘mission critical,’” he said.

Hilbrant also uses The Retirement Analysis Kit (TRAK)—retirement readiness software for participants that costs a mere $900 a year.

Edward Chairvolotti, president and CEO of Chairvolotti Financial, said he developed Planchekr, an automated fiduciary dashboard to better serve his 75 fiduciary clients along with his 75 other clients soon to become fiduciary clients.

The dashboard shows each client 25 goals it needs to fulfill to be in compliance with the Department of Labor (DOL)’s fiduciary requirements and “automates the governance file,” Chairvolotti said.

NEXT: Analyzing TDF glide paths

With the help of Lockton, SageView and Innovest, PIMCO has developed a tool to analyze target-date fund (TDF) glide paths, said Jay Slusher, vice president, retirement adviser consultant at PIMCO. In addition, his firm has written a white paper recommending a four-step process advisers should follow to monitor TDFs. As outlined in the paper, these are: 1) create a timeline for how frequently the particular TDF should be monitored; 2) determine what areas should be appraised in an annual deep dive; 3) perform a due diligence study every three to five years; and 4) benchmark the fund. Of course, all of these steps need to be documented, Slusher said.

Recognizing that fee compression is a challenge for all retirement plan advisers, Wells Fargo Asset Management has made “differentiating itself through its adviser service model” a priority, said Thomas O’Connell, DCIO specialist at the firm. Wells Fargo, therefore, surveyed 140 retirement plan specialists and their participants to discover discrepancies between sponsors’ expectations and advisers’ services, he said.

The firm learned that, among top advisers, 52% survey their clients on a regular basis, said O’Connell, who asked the audience, by show of hands, who follows that procedure. Only a handful indicated this is a practice at their firm.

O’Connell said the survey also revealed that “plan sponsors want to be educated and to receive proactive suggestions” from their retirement plan advisers. “A satisfied client will leave you for as little as a 10-basis-point” reduction in fees, he said, noting that sponsors are constantly bombarded by offers from competitors. “A loyal client will call you up and ask you why it should leave you for 10 basis points [bps],” O’Connell said.

As far the practice management software that the panelists use, Hilbrant said he employs Dropbox to share office files. It allows “various people to contribute to a report,” he said. Additionally, 401k Advisors uses a cloud site so that the advisers can access information about the fiduciary rule, he added.

 Hilbrant said he has also found Evernote to be indispensable for dictating retirement plan committee meeting minutes into his iPhone. That has “revolutionized” the way he communicates with people in his office, he said, because his writing is so poor he sometimes can’t decipher it, himself.

Jim Sampson, director of retirement advisory services at Hilb Group Retirement Services, and moderator of the panel, said that rather than provide retirement committee members with paper-based reports, Hilb Group now gives them iPads and controls the presentation through Apple’s Conference Pad application. Sampson uploads the reports through Dropbox and shares them wirelessly with committee members via Bluetooth or Wi-Fi. Sampson said he likes the app not only because it is paperless but because it allows him to make last-minute changes—even during the meeting.

Hilbrant added that, while iPads initially cost more than $1,000 apiece, used VersionOne iPads are now available on eBay for as little as $60 apiece, making it affordable for advisers not only to loan iPads to committee members but to give them the devices.

NEXT: The ‘big ask’

As to what advisers are looking for, Wells Fargo has found that the “‘big ask’ is for additional content to keep committee meetings fresh,” O’Connell said. As a result, every quarter, Wells Fargo offers advisers new content on such topics as serving Millennials or pre-retirees, he said.

According to Slusher, PIMCO has found advisers are anxious for help with locating new revenue stream sources. “We can provide you with a list of defined benefit [DB] plans by city, assets or zip code,” he said. “This is low-hanging fruit.” PIMCO also conducts an annual consultant survey of some 70 firms representing $60 trillion in assets, to uncover plan design and investment trends, Slusher added.

The panelists went on to list a number of other software packages they find helpful, including a tool from Fidelity that helps advisers find the best-performing funds, Hilbrant said. “It eliminates hours of the process,” he said.

Sampson said he takes recommendations from mutual fund wholesalers and inputs them into software called Investment Bullpen. The program will indicate which of those funds are the best performing, he said.

Chairvolotti said he screens funds in Fi360 as well as in Dorsey Wright’s Team Builder. The latter is a “point and finger chart that ranks every mutual fund and exchange-traded fund [ETF] and plots them in Morningstar-style-type boxes,” he said. “This has led to as much as 24% tactile better performance, year to date. This is a trending—not a timing—tool.”

Additionally, Chairvolotti uses the Plan Check customer relationship management (CRM) tool. “It can even aggregate all of your plans,” he noted.

To aggregate all of a participant’s holdings, Chairvolotti Financial uses eMoney, which asks participants to populate the application with all of their assets. To benchmark small plans with 100 participants or less, Chairvolotti said he likes ERISApedia, and for larger plans, R-Xtrema.

Hilbrant said Fiduciary Benchmarks has been a “game changer” for 401k Advisors. This software asks advisers to input all of the fiduciary services they are providing for a client and then arrives at a suggested flat fee. For example, the software might conclude that a practice should be charging a sponsor $40,000 a year, he said. “If you are charging only $25,000, you can readily corroborate your value proposition,” he noted.

The bottom line, Chairvolotti said, is “there are people creating software for our industry every single day.” Advisers need to keep their eyes open and embrace these offerings, he said. In fact, Chairvolotti said he is so enthusiastic about new software applications for retirement plan advisers that he frequently buys such offerings without first calculating whether they’ll be valuable. He said he has found this a good way to stay one step ahead of his competitors.