“Offering a retirement plan has never been easier.”
It raises the question—for whom?
Morningstar said it will launch a 401(k) plan platform early next year that is specifically geared to broker-dealers, and will assist firms in ensuring post-DOL Rule passage compliance.
“With Morningstar Plan Advantage, companies can implement and monitor a plan for their participants on one user-friendly digital platform,” according to the company. “Consisting of recordkeeper selection, fund lineup and investment management, Morningstar Plan Advantage represents a complete package for plans and the participants they serve.”
Noting that “Demonstrating and documenting that plan decisions are in the best interest of participants is growing in importance as the Department of Labor’s expanded fiduciary rule continues to disrupt the financial services industry,” the Chicago-based company says generalist advisors working with retirement plans “may have to adhere to higher standards and might be conflicted from providing plan lineup advice beginning in April 2017.”
“Morningstar Plan Advantage helps to ensure that their plan sponsor clients can continue to receive retirement services and quality fund lineups. From the plan sponsors that use the platform to the advisors and broker-dealers it supports, Morningstar Plan Advantage aims to solve several needs that the expanded fiduciary rule exposes.”
It adds that it is “well-positioned to help individuals and companies navigate the complexities of new fiduciary standards. We have offered both 3(21) and 3(38) fiduciary services for more than a decade and currently provide institutional-quality lineups and comprehensive plan lineups and reports to more than 13,000 plans.”
To implement a new plan, a plan sponsor needs to:
- Register on the Morningstar Plan Advantage site
- Submit a demographic profile of their participants
- Choose one of three available category-level lineups: core, standard or expanded
- View real-time pricing from a variety of different recordkeepers and select a recordkeeping partner
- Submit the above to be processed by the selected recordkeeper
Once a plan goes live with their selection, it will receive a fund-level lineup that is managed by Morningstar Investment Management. This solution will help many more plans get access to institutional-quality fund lineup selection and management. As part of the solution, plans will also have ongoing access to detailed reports, alerts, and lineup changes.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
