How to Make the Leap

Art by Jack Dylan

One might think attracting clients with greater assets under advisement (AUA) would call for a complicated game plan. But, as two seasoned retirement plan advisers suggest, the answer is much simpler: Serve your current clients well.

For Ken Catanella, founder and managing director, wealth management, of The Catanella Institutional Consulting Group of UBS in Philadelphia, this means welcoming innovation—in plan design, communication, technology, etc.—to help grow his clients’ plans and better serve their participants.

“You’ve got to take care of them first,” he says. “If you do a good job for them, everything else follows its own course. You’re going to get referred to a $250 million plan. Then you can use that as a reference.”

His own firm’s advancement is a case in point. In 1994, three years after his team joined UBS, one of his two plans totaled $17 million. Today, his smallest plan is $100 million.

Building a strong reputation aided that ascent, he notes. At UBS, for instance, he shares his team’s success stories with private wealth consultants who serve large corporations; they, too, provide referrals. “You can’t go after larger plans unless you have larger plans,” he says. “You’ll be asked, ‘How many $100 million plans do you consult to?’ If you can’t answer that question, it’s over before you start.”

Like Catanella, Grant Arends, president of Intellicents Inc. in Kansas City, Kansas, watched his business evolve until the next step was naturally up. “It starts with an opportunity presenting itself, most likely from a referral or a center of influence where someone brings you into a larger plan,” he says.

Arends’ varied experience working with small plans—notably with the participants—proved to be invaluable. “When we bring that level of consulting, regarding participant services, to larger plans, we get a ‘Wow’ factor because they’re not used to hearing that from consultants,” he says, adding that many large-plan advisers focus only on investments, fees and fiduciary coverage—they outsource the hands-on tasks. “To me, [serving participants] is the ticket into the larger-plan market,” he observes.

But a lack of specialization can also slam the door, he says. Intellicents does plan consulting exclusively, he notes and cautions investment managers and generalists against tackling this market without a specialist on their team. “Even in the $10 million space [today], you’d better know what you’re doing; if you’re in a competitive situation with advisers who are specialists, they’re going to clean your clock,” he says.

He cites a further caveat: Not all advisers can provide services competitively in the current fee environment. “You need scale and team work to deliver those services to a large plan profitably today.” Therefore, performing due diligence is key, he says.

Still, there is an alternative way to make the climb—one Catanella prefers: “Grow your small plans, and you will grow.” For example, he says, “by working with [one] company to improve communications and participant education and bring the match to where it should be, we enhanced all those things to make it more attractive for people to save.” Today, that $17 million plan he mentioned has AUA of $200 million.