Deals & People June 10, 2016

Retirement Industry People Moves

Kravitz opens Atlanta office; CUNA Mutual adds six to sales team; LPL opens office in D.C. for Government Relations team.
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Cash balance plan provider Kravitz has opened a regional headquarters in Atlanta to serve the demand for cash balance plans throughout the South and Southeast.

Kravitz tapped Atlanta resident and retirement plan sales expert Shannon Hayes to lead the new office.

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Hayes brings more than a decade of retirement industry experience to Kravitz, including experience at The Hartford, Edward Jones and Mass Mutual. Most recently, she doubled sales in the Atlanta region for a national third-party administration (TPA) firm.

“I really look forward to growing relationships with the Kravitz network of financial advisers, CPAs and partner TPA firms across the Southeast,” Hayes says. That network includes more than 300 retirement professionals in the local area who have completed the Kravitz Cash Balance Coach Certification program.

NEXT: TIAA leader elected to NBOA board

Ben Lewis, senior managing director at TIAA, has been elected to serve on the National Business Officer’s Association (NBOA) Board of Directors starting July 1.

Lewis, who leads TIAA’s retirement plan business dedicated to independent schools, was selected to the board due to his deep understanding of the challenges facing independent school business officers and leadership in the small- to mid-size retirement plan field. During the three-year term, Lewis and his fellow board members will focus on helping independent schools address strategic needs, including securing financial well-being for their employees.

NEXT: CUNA Mutual adds six to sales team

CUNA Mutual Retirement Solutions added six regional sales professionals to its sales team.

Based on a team structure, retirement plan advisers across the country now have access to regional vice presidents and regional sales consultants to help build and close business.

In the Eastern Division, Lee Tenney joined CUNA Mutual Retirement Solutions in January 2016 as regional vice president for Connecticut, eastern New York and western Massachusetts. He previously served as senior vice president at 3D Asset Management and director of retirement at Wisdomtree Investments. He reports to Christina Gregory, Eastern Divisional vice president.

Michael Kouromihelakis was also hired in January as regional sales consultant in Connecticut, upstate New York, western Massachusetts, Missouri, Oklahoma, Kansas and Nebraska. Prior to joining CUNA Mutual Retirement Solutions, Kouromihelakis served as a financial associate with Webster Bank in Connecticut, and brings more than 15 years of experience in the financial services industry. He reports to Pete Wesner, divisional manager, Internal Sales.

CUNA Mutual Retirement Solutions added four new hires in its Western Division. Michael Kuehnle is the regional vice president covering the south Texas territory. Before joining the company in August 2015, he served as director of sales and marketing at Malcolm Thompson and Associates and was regional vice president of retirement plan sales at Nationwide Financial and Enterprise Capital Management. Kuehnle has more than 20 years of experience in the financial services industry.

Jonathon Matson joined CUNA Mutual Retirement Solutions in December 2015 as regional vice president for Arizona, Colorado, New Mexico, Utah and Wyoming. Prior to joining the company, Matson served as a regional vice president with Guardian Retirement Solutions and joins the team with more than 10 years of experience in the financial services industry.

The new regional vice president for northern Texas is Trey Wallace, who was promoted in December 2015 and has more than 15 years of experience as a wholesaler focusing on retirement solutions. He previously worked directly with business owners, plan sponsors and financial advisers as a retirement plan consultant at ING and Nationwide. Wallace and Matson report to Joe Eleccion, Western Divisional vice president.

DJ Sobrepena became the regional sales consultant in January supporting Scott Thaler for southern California, Hawaii, and Las Vegas. Prior to joining CUNA Mutual Retirement Solutions, Sobrepena served as a retirement solutions associate at AllianceBernstein before becoming a business development specialist at MullinTBG. He has nearly 10 years of experience in the financial services industry and reports to Pete Wesner.

“The intermediary channel is a critical component of the long-term growth strategy for our retirement services business,” says Paul Swanson, vice president of National Sales and Institutional Relationship Management for CUNA Mutual Retirement Solutions. “I am very excited about the level of talent we’ve put in place to support our expanding client base.”

With these additions, the CUNA Mutual Retirement Solutions sales team is now fully staffed.

NEXT: LPL opens office in D.C. for Government Relations team

LPL Financial LLC, a wholly owned subsidiary of LPL Financial Holdings Inc., has established an office in Washington, D.C. for members of its Government Relations team who engage regularly with legislators, regulators and trade associations to advocate and address issues on behalf of the financial services industry, LPL advisers and retail investors.

While LPL’s Government Relations team has long been engaged with policymakers and influencers in the capital city, having a local base of operations will foster increased collaboration across the various functions within this team, while also creating efficiencies and conveniences that will maximize their efforts on behalf of the firm and the industry, the firm says.

“The work of our Government Relations team is one important way LPL demonstrates its commitment to ensuring all Americans have access to independent financial advice,” says David Bergers, LPL general counsel and managing director of Legal and Government Relations. “As a leader in our industry, LPL has a responsibility to ensure the voices of our advisers and investors are heard and to advocate for policies that support the best interests of investors. We are excited to strengthen our commitment to this important effort by establishing a physical presence in D.C. and further empowering our team in their essential work.”
Compliance June 10, 2016

Latest DOL Fiduciary Rule Lawsuit Spotlights Insurance Industry Concerns

Two national insurance advocacy groups have “reluctantly” joined the growing list of plaintiffs asking the federal courts to declare the DOL’s new fiduciary rule arbitrary and capricious. 
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The latest legal challenge to the Department of Labor’s (DOL) new fiduciary rule comes from two national life insurance industry advocacy groups, who say they are reluctantly, but necessarily, attempting to halt the rulemaking.

Previous suits have been filed by the fixed-annuities industry and a wider coalition of financial services providers and other interests, including U.S. Chamber of Commerce, Financial Services Institute, Financial Services Roundtable. Similar to those challengers, the American Council of Life Insurers (ACLI) and the National Association of Insurance and Financial Advisors (NAIFA) say their “commitment to present and future retirees requires them to challenge the U.S. Department of Labor’s fiduciary regulation in court.”

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“ACLI and NAIFA do so reluctantly,” suggests ACLI President & CEO Dirk Kempthorne and NAIFA CEO Kevin Mayeux. “But it has become clear that the rule will harm the very people it is meant to help. It will harm retirement savers who now, more than ever, need access to the guaranteed lifetime income products—personal pensions—offered by ACLI and NAIFA members.”

The complaint was filed U.S. District Court for the Northern District of Texas—the same venue as the suit filed by the U.S. Chamber, FSI, and company. The text of the complaint suggests the DOL regulation “will impact Americans’ access to accurate and valuable information from financial professionals about their 401(k)s, individual retirement accounts (IRAs) and other retirement plans, including information about guaranteed lifetime income products such as annuities.”

Those who have followed the rulemaking in recent years will see some familiar arguments in the text of the complaint. According to ACLI and NAIFA members, annuities are the only products in the private marketplace that guarantee lifetime income, and thus the DOL should be cautious before enshrining a rule that could potentially make it harder to access said products.

“After a regulator in the United Kingdom tried a similar approach in 2012, the UK Treasury Department and Financial Conduct Authority in March 2016 issued a report …  that said a gap exists for people on lower incomes or with lower levels of assets who cannot afford to pay the fee for advice or find it harder to access,” the suit argues. “In addition to affecting retirement planning products and the importance of saving for the long-term, the regulation will impact the availability of lifetime income products in the marketplace.”

NEXT: Constitutional violations? 

The implication of the suit is that the DOL lacks the authority from Congress to push the industry so forcefully to change so fundamentally so quickly. The groups further suggest the rulemaking could be outright unconstitutional.

“The rule directly regulates commercial speech by imposing fiduciary obligations on recommendations about retirement products,” plaintiffs suggest. “The Department's rule will classify virtually all commercial interactions between those selling life insurance products and retirement investors as ‘fiduciary’ advice, despite the fact those relationships have never before been deemed fiduciary and do not bear the hallmarks of fiduciary status.”

The groups also claim the enforcement of the DOL’s envisioned fiduciary paradigm will not be in taking with the spirit of the Employee Retirement Income Security Act (ERISA) and other relevant retirement and tax law. 

“With no authority from Congress, and inconsistent with clear congressional intent, the Department of Labor created a private right-of-action for plaintiffs' lawyers and state courts to enforce its complex and vague standards,” the complaint argues. “Congress alone has the responsibility to ensure evenhanded, consistent, and predictable enforcement of the law. This approach places life insurance companies and financial professionals under a perpetual threat of litigation that will increase the cost and affect the availability of retirement products for low- and middle-income Americans.”

Finally, the suit argues the DOL “unreasonably and arbitrarily dismissed the existing and effective regulatory structure enforced by the Securities and Exchange Commission, the Financial Industry Regulatory Authority, and state insurance regulators.”

The full complaint is available online here.

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