Deals & People April 13, 2018

Retirement Industry People Moves

The Standard Adds Retirement Specialist to Denver Office; New Regional SVP for TPA Services at Pentegra; Industry Veteran to Serve as SVP and Sales Director at USICG; and more.

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The Standard has announced the hiring of Michael Cohen as national accounts relationship manager. He is based in The Standard’s Denver, Colorado, Retirement Plans Sales and Service office.

Cohen has 12 years of experience in the financial services industry, specializing in retirement plans and partnering with advisers, registered investment adviser (RIA) firms and plan providers. Prior to joining The Standard, he worked as a relationship manager for Charles Schwab & Co.

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“Mike comes to us with a deep understanding of the financial services industry and a special focus on retirement plan products and services,” says Ken Waineo, director of Business Development for The Standard. “He brings expertise, collaboration and insights to our adviser and channel partners.”

Cohen received a bachelor’s degree from the University of Colorado. He holds FINRA Series 7 and 63 licenses and is an Accredited Investment Fiduciary with fi360.

New Regional SVP for TPA Services at Pentegra

Lance Kesterson of Pentegra has been named regional senior vice president, TPA (third party administrator) Services.  Kesterson will spearhead Pentegra’s TPA operations, overseeing strategy, operational effectiveness, adviser and client experience, and business development efforts.

Pentegra’s TPA divisions in Blacklick, Ohio; Charlotte, North Carolina; and Greenville, South Carolina will report to Kesterson, who will be based in Blacklick.

Pentegra Senior Vice President and Chief Operations Officer Michael Palmiere said, “Lance is an accomplished and talented industry professional and we are delighted to welcome him to the Pentegra team. He brings a unique combination of expertise in retirement plan administration and service, client relations, sales and project management to Pentegra.”  

Prior to joining Pentegra, Kesterson served as senior vice president at United Retirement Plan Consultants, Inc., where he was responsible for directing and executing national sales and marketing strategies. Previously, he served in numerous roles at Nationwide Insurance, including vice president and segment chief financial officer, Retirement Plans. Kesterson holds an MBA and B.S. in Finance and Accounting from The Ohio State University.

BPAS Acquires HR Consultants’ Puerto Rico Division 

Benefit Plans Administrative Services, Inc. (BPAS) has acquired the business of HR Consultants (SA), LLC, in Puerto Rico. Both Adrian Robles and Hector D. Gaitan, of HR Consultants, have already joined the staff of BPAS under an interim arrangement. 

A spin-off of the PricewaterhouseCoopers Global Human Resources Solutions division, BPAS staffs 30 credentialed actuaries and serves plans ranging from 1 to 20,000 employees. The company’s defined contribution group has been supporting plans in Puerto Rico since 2000. 

Hector Gaitan of HR Consultants, who will take on the role of SVP Caribbean Operations, BPAS Trust Company of Puerto Rico, says, “I am extremely excited to join BPAS. Their depth of staff, breadth of practice and demonstrated commitment to clients in Puerto Rico are all valued-added benefits to HR Consultants’ clients. We look forward to continuing our relationships with clients from our expanded office in Puerto Rico.” 

Industry Veteran to Serve as SVP and Sales Director at USICG

USI Consulting Group has added Bart Ballinger to the position of senior vice president and regional sales director, based in Los Angeles, California. Ballinger will be responsible for managing the western region of the sales force and providing creative solutions for USICG clients. He has 28 years of experience in plan design, investment, compliance, recordkeeping and participant communications.

Great-West Investments Adds Four Veteran Team Members

Great-West Investments announced the addition of four veteran team members to help deliver the company’s investment, income and advice solutions for the retirement market.

Thomas Nun joined Great-West Investments in a new role as Portfolio Strategist where he will be responsible for supporting the firm’s suite of investment products to advisers, consultants and plan sponsors. Nun joins the Great-West Investments team from Janus Henderson, where he helped develop corporate and product strategy and previously served as assistant portfolio manager on various Janus funds.

David Budka is the new Consultant Relations Director. He is a former investment portfolio strategist and has been in investment consultant relations for the past 13 years with MassMutual, BNY Mellon and most recently USAA. He started April 9 and will be based in Boston.

Blair Filuk is the new Core Segment Investment Sales Director for the West Region. Filuk comes to Great-West Investments from Voya, where for the past 17 years he worked in various defined contribution investment-only roles and most notably as a West Coast investment wholesaler. Filuk, who began his new role April 2, will be based in Portland, Oregon.

Matthew Rielley joins the Great-West Investments team as the new Core Segment Investment Sales Director for the Midwest Region. Rielley has been with Empower Retirement for the past 11 years as a regional sales director and is transitioning to investment product and solutions. He brings extensive defined contribution experience and knowledge of the Midwest region. Rielley will be based in Milwaukee, Wisconsin. He started his new role April 2.

Executive VP to Join Senior Leadership Team at FIA  

Fiduciary Investment Advisors, LLC (FIA), has hired James Romano as executive vice president. Romano will be a member of the senior leadership team responsible for the daily operation of the firm. His areas of responsibility include strategic development of the firm, along with financial and risk management.

“Jim is a seasoned financial executive with a strong background in asset management, mergers and acquisitions, and significant international experience. We believe that he is particularly well suited to work with our leadership team to help us grow and continue to retain the highest level of client service and satisfaction that FIA is known for,” notes Mark Wetzel, president of FIA.

Prior to joining FIA, Romano worked at Conning for over two decades, where he served as chief risk officer and head of the risk solutions business. He was also previously employed by John Hancock Mutual Funds, Travelers, and UTC Otis Engineering.

Regional Sales VP Joins Voya’s Small-Mid Practice

Voya Retirement has recently hired Craig Pagano as regional vice president of sales for the company’s Small-Mid Corporate Market business. 

In this role, Pagano will be responsible for developing distribution relationships and increasing retirement plan sales in southern New Jersey and Delaware. He will focus on all distribution channels, including registered investment advisers (RIAs), wirehouse firms, independent and regional broker-dealers as well as banks, that serve employers with employee retirement income security act (ERISA) plans up to $75 million in assets.

“I look forward to joining a company that is not only leading the way in helping individuals become ready to retire better, but is committed to making the community a better place,” says Pagano.

Pagano recently held the position of regional vice president at Transamerica Retirement Solutions. He graduated from the University of South Carolina, Columbia, with a Bachelor of Arts. He also received his Master in Finance from Rutgers, the State University of New Jersey-Newark.

Boston-Based John Hancock President Named as CEO

Patrick Murphy has been named chief executive officer, John Hancock Retirement Plan Services (JHRPS), part of John Hancock, the U.S. division of Toronto-based Manulife.

Murphy, who is based in Boston and is JHRPS’ president, will replace Peter Gordon, who will be retiring from the company later in the year.

In his new role, he will be responsible for leading all facets of John Hancock’s U.S. retirement recordkeeping business. His appointment is effective immediately.

“Patrick has been a critical member of the leadership team for our retirement business since coming on board in 2015,” says Gordon. “He has been instrumental in expanding our solutions across the retirement plan market to service more than 57,000 plans and help more than 2.7 million participants. I’m confident that Patrick’s experience, expertise and commitment will help serve our customers as we continue to grow.” 

Murphy joined Hancock when the company acquired New York Life’s RPS business where he had been chief executive officer. He was employed at New York Life for 11 years in a variety of roles, and has spent his career working in retirement plan services, including American Express Retirement Plan Services, Transamerica and Putnam Investments.

Murphy graduated from Brown University with a B.A. in Organizational Behavior and Management.

The Markets April 13, 2018

LDI Solutions Support Surge in Custom Institutional Portfolios

A new Cerulli Associates analysis shows institutional custom solutions assets stood at $1.7 trillion at year-end 2016, and assets are projected to grow 10.4% to 1.9 trillion by 2021.

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The latest report published by Cerulli Associates seeks to develop a working definition of “custom institutional investing solutions.”

“True institutional custom solutions are a relatively new phenomenon in the modern history of asset management and there remains a great deal of debate in the industry regarding what constitutes a custom solution,” says Christopher Mason, senior analyst at Cerulli.

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The framework established by Cerulli researchers suggests the “custom institutional solution” label is appropriate for “any strategy managed for an institution characterized by the major functions of liability-driven investing (LDI), multi-asset-class solutions, outsourced chief investment officer, and pension risk transfer or pension settlement transactions.”

“Cerulli suggests that LDI is the ultimate custom solution and that the growth of the discipline is intertwined with the developments in the U.S. corporate defined benefit (DB) plan universe,” Mason explains. “LDI is used by corporate plans in the United Kingdom, Canada, and elsewhere; however, the U.S. corporate market is by far the largest.”

Alexi Maravel, director of Cerulli’s institutional practice, observes that the LDI topic is “probably the most competitive pricing environment among the different types of institutional custom solutions available today.”

“In such an environment with pressure on pricing and rising cost of resources, Cerulli believes more mergers and acquisitions among LDI managers could occur in the near future as organizations look for scale in their delivery of services,” Maravel says.

Cerulli’s report, “North American Institutional Markets 2017: Strategies for Implementing Customized Services Across Client Segments,” also covers the increased use and adoption of collective investment trusts (CITs), and the ongoing influence of investment consultants.

Details from the Cerulli report

Cerulli’s reporting shows institutional assets rose 5.5% year over year to roughly $20.7 trillion as of year-end 2016, reflecting growth across defined contribution (DC) plans, state/local DB plans, corporate DB plans (including Taft-Hartley), insurance general accounts, and nonprofit institutions. According to Cerulli’s proprietary sizing models, total institutional assets are projected to reach nearly $25 trillion by 2022.

“Relatively low long-term interest rates remain a challenge to the finances of insurance companies and to the internal investment professionals charged with company investments,” Cerulli notes. “However, the actual impact of rates varies by company and the type of business the company writes.”

Cerulli researchers highlight that approximately one-quarter (26%) of surveyed managers’ product development plans will be allocated to multi-asset-class products during the next 12 months.

“The leading priority among managers’ product-related initiatives is building out new vehicle offerings. For managers that don’t currently offer collective investment trusts (CITs), 86% of managers are currently considering offering them, with the remaining 14% indicating they have formal plans to build them during the next 12 months,” Cerulli explains. “Target-date strategies make up approximately 19.4% of total CIT assets held in DC plans.”

 The majority of managers (43%) anticipate adding portfolio specialists/client portfolio managers to their institutional sales teams during the next 12 months. Other findings show surveyed providers indicate that a lack of internal resources and a desire to improve governance processes are the top reasons institutional investors pursue OCIO service offerings.

Information about obtaining Cerulli Associates research is available here.

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