Enabling Advisers to Scale for Growth

Jason Crane, head of core retirement at Ascensus.

PLANADVISER: What support and services are plan sponsors expecting retirement plan advisers to provide for their retirement plans and employees?

Crane: Let’s start with the basics. The first thing that plan sponsors are looking for from advisers is unbiased guidance—recommendations for financial well-being that are in the best interest of their employees.

The other basic foundational element plan sponsors expect from advisers is a broad understanding of the benefits landscape. It’s very difficult to provide counsel or guidance on retirement plans if you don’t also appreciate that retirement plans are just one element within broader benefits offered by employers, considering both costs and types of benefits offered.

Plan sponsors need assistance with plan design, and the good news is advisers don’t need to be experts. However, they should recognize the ways to curate plan provisions to best suit the objectives of the plan sponsor. Some organizations look at retirement plans to help recruit employees, some to help retain employees, and some as opportunities to reward executives. Programs can be designed accordingly.

The last point I’d make is that plan sponsors are looking to advisers for holistic financial counsel and advice. Organizations are asking advisers to broach both retirement and wealth management. That’s been an accelerating trend of late.

PLANADVISER: Why should advisers explore retirement plan markets other than qualified single-employer defined contribution plans?

Crane: First, let’s touch on MEPs and PEPs, or multiple employer plans and pooled employer plans.

Those allow individual employers to come together to pool resources for the sake of economies of scale and efficiencies. The first thing to understand is those programs, in their essence, are no different than traditional 401(k) and 403(b) plans. But it’s good for plan sponsors to know what they are and understand the competitive landscape. Advisers also oftentimes use those vehicles to create efficiencies in their own practice.

MEPs and PEPs provide fiduciary coverage for plan sponsors—administrative fiduciary coverage in the form of 3(16) services and investment fiduciary coverage in the form of 3(38) services. Those can be added to individual DC plans, but much like anything else, if commercially packaged together, they are more easily understood by consumers and administered by providers. Because of this, MEPs and PEPs have gained favor over the last couple years, particularly as enabled by recent legislation.

Other retirement programs, such as cash balance and nonqualified plans, provide an opportunity for advisers to assist high earners and executives who are already maximizing contributions to qualified DC plans. Beyond that, for those advisers who are interested, nonqualified plans can be financially backed by insurance solutions such as corporate-owned life insurance and bank-owned life insurance.

Familiarity with various retirement plan types better enables advisers to provide holistic counsel and demonstrate a broad understanding of the marketplace.

PLANADVISER: In a time when plan sponsors are expecting more from advisers, what should advisers take into consideration when promoting their value?

Crane: We’re very passionate about this at Ascensus. A core value proposition is independence. By that I mean the concept of a fiduciary adviser providing counsel and advice for the explicit benefit of the plan sponsor and its employees.

The ability to do so requires the adviser to partner with firms that enable them to act in an unbiased and uncompromised capacity. So, one consideration for an adviser would be to look for firms, like Ascensus, that have invested heavily in technology, which has allowed us to recordkeep plans efficiently at scale.

That may not sound novel or complex, but it involves automating core processes like onboarding, payroll compliance, year-end testing and document creation—all to a greater degree than most other platforms—and that automation allows us to deliver solutions at a low cost to serve. That’s important because it enables us to avoid selling ancillary products to generate enough revenue to sustain profitability. Those products might include proprietary investments, stable value solutions, advice programs—all of which are valuable in their own right but can impair an adviser’s ability to provide independent fiduciary counsel.

Advisers need to look for partner platforms that enable them to do what they do best.

PLANADVISER: What support can Ascensus provide to advisers for brand-building and scaling for growth?

Crane: Our mission is to help advisers stand out in a sea of sameness by building their personal brand and demonstrating their value at a time when so many plan sponsors are demanding more of advisers. In today’s increasingly competitive landscape, a personal brand can help advisers differentiate themselves and their services.

The reason we at Ascensus feel we’re uniquely equipped to help advisers build their brand is we are doing the same. We are an organization that, for years, has subordinated our own brand in favor of highlighting our partners’ brands to fuel their growth. While we remain committed to our partners and to empowering them to achieve their critical objectives, we’re also much more intentionally leaning into the Ascensus brand. We’ve heard from our partners that it benefits them as well—their clients are more inclined to use our solutions if they have familiarity, trust and confidence in us.

PLANADVISER: Where can advisers turn for help in creating a business model that allows them to generate consistent growth?

Crane: I suspect this sounds a bit self-serving but let me elaborate on why we think advisers can turn to Ascensus for help.

First, tax-advantaged savings, including for retirement and for education, is our core business. It’s not a vehicle to deliver ancillary products. We’ve been able to build a predictable, reliable and profitable business by placing our customers and their needs at the center of it.

Second, as I noted earlier, we provide an unconflicted partnership model. We’re not an investment product manufacturer, nor are we chasing wealth management capture, which could be at odds with the customers, partners and advisers we serve.

Lastly, Ascensus has what we refer to as a relentless pursuit of better-saver outcomes. Our noble purpose is helping more savers save more and we welcome the opportunity to work with like-minded advisers in pursuit of that objective.

Ascensus, LLC provides administrative and recordkeeping services and is not a broker-dealer or an investment advisor, and does not provide tax, legal, accounting, or investment advice.

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