Deals & People August 14, 2015

Retirement Industry People Moves

Kravitz opens and staffs a new Chicago office; Jody Ackerman joins John Hancock RPS as a regional vice president; Chris Barrett joins Stadion as a regional vice president; and James Macey becomes co-lead on Franklin Templeton Allocation funds and TDF suite.
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Kravitz, a national provider of cash balance retirement plans, announced the opening of a Chicago office to meet the growing demand for cash balance retirement plans throughout the Midwest region.

The firm says it already serves a large client base across the Midwest, so expanding to Chicago was an obvious next step from a growth and client service perspective. The firm shares figures suggesting the number of new cash balance plans “has been increasing more than 20% annually while the traditional 401(k) market remains flat.”

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Kravitz tapped Chicago native and cash balance expert Steve Stone to lead the new office. Stone brings more than 15 years of retirement industry experience, including roles at John Hancock and J.P. Morgan. Most recently he worked for a large regional third-party administration firm.

NEXT: John Hancock RPS adds regional VP

John Hancock Retirement Plan Services has hired Jody Ackerman as regional vice president, responsible for sales and relationship development with financial representatives and plan consultants in John Hancock's Mid-Atlantic Division, with a focus on central Ohio. She reports to Stephen Davis, divisional vice president, Mid-Atlantic Division.

Ackerman has 15 years of experience in retirement plans and the Ohio marketplace, according to the firm.

She most recently served as vice president of retirement plan sales, handling central and southern Ohio, for a significant retirement plan provider. She is a graduate of The Ohio State University with a degree in business administration and finance, and holds FINRA Series 7, 24, 63 licenses. She also holds state insurance licenses in Ohio and Kentucky.

NEXT: Stadion hires sales VP in New England 

Stadion Money Management announced the hire of Chris Barrett as a regional vice president, with responsibility for retirement sales in New England and Northern New Jersey.  

Stadion says Barrett is a retirement industry veteran who has more than 28 years of industry experience. Immediately prior to joining Stadion, he worked for Transamerica Retirement Services, where he was a divisional vice president responsible for managing the sales and marketing effort for defined contribution and defined benefit plans in the Northeast U.S.

Previously, he held senior sales and sales management roles with U. S. Trust, UBS, and MFS Investment Management.

Barrett received his bachelor’s degree in history from the University of Massachusetts, Dartmouth, and an M.B.A. from the Suffolk University Sawyer School of Management. He also holds the accredited retirement plan consultant (ARPC) designation from FINRA.

NEXT: Franklin Templeton adds fund manager 

Franklin Templeton Investments hired James Macey as co-lead on the Franklin Allocation Funds and Franklin LifeSmart Retirement Target Funds.

Macey becomes a senior vice president and portfolio manager in the new role, and will maintain a focus on retirement solutions. He joins current co-lead managers Tom Nelson, senior vice president, director of investment solutions, and Tony Coffey, senior vice president, on the management team for the allocation and target-date funds.

With 15 years of investment industry experience, Macey was previously at Allianz Global Investors, where he was a co-lead manager for their target-date and retirement income portfolios. He was also a portfolio manager for Allianz’s multi-asset U.S. mutual funds and helped to operate target-risk, multi-asset real return and 529 college-savings plan funds.

Macey holds a master’s of science degree in astrophysics from University College London. He also holds chartered financial analyst, chartered alternative investment analyst and professional risk manager designations.

Data & Research August 14, 2015

Advisers May Want to Get In On Robo-Advice Movement

Deloitte sees this model gaining significant traction in coming years.
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The 11 leading robo-advisers—firms that leverage client information and algorithms to develop automated portfolio allocation—had $19 billion in assets under management at the end of 2014. This is according to a report from Deloitte titled, “Robo-Advisors: Capitalizing on a Growing Opportunity.”

“However, these new market entrants are still nascent and represent a trivial amount relative to the $25 trillion retail investable assets in the United States,” Deloitte says. “Their lack of distribution has likely contributed to difficulties in reaching a large number of potential customers.” But with large wealth management firms like Charles Schwab and Vanguard now entering the fray, that might change, Deloitte predicts.

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The reason why robo-advisers might gain traction is they typically provide advice for as little as 20 basis points and in some cases, at no charge, according to Deloitte They might also appeal to younger investors who are digitally savvy and want to access their portfolios anywhere and anytime.

It also cannot be overlooked that some wealth management firms are investing heavily in “big data and advanced analytics,” potentially leading to more personalized advice. And, some wealth management firms are combining robo-advice with their existing advisory offerings for a hybrid model. Finally, technology has lowered the barriers for firms to offer robo-advice—and Deloitte thinks “non-financial firms with access to large numbers of retail investors and leading-edge technology firms will likely also enter wealth management through a robo-advice model.”

NEXT: How adviser practices should respond

Advisory practices that serve high-net-worth individuals who can afford person-to-person advice may not want to embrace these new robo-advice developments.  However, those that serve the mass-market “will likely need to embrace digital strategies and tools to help maintain competitive advantage in this new market environment,” Deloitte says. “Although it is only the beginning, wealth managers should react, as this hybrid service model will likely become the new norm.”

Deloitte outlines three ways advisers can enter the robo-adviser field. They can partner with an existing robo-adviser, which will help them avoid the costs and risks of building a solution to fit their legacy systems. An example of this is Fidelity Investments partnering with Betterment. They can go the in-house route, which gives them the control to offer various functions. Vanguard and Charles Schwab have taken this approach. Or, they can acquire a robo-adviser, like Northwestern Mutual’s purchase of Learnvest.

“Robo-advice is here to stay and poised to evolve into much more disruptive and wide-ranging forms of advice. All wealth management firms should take notice,” Deloitte concludes. Deloitte’s report can be downloaded here.

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