When regular old fiduciary doesn’t get it done, there’s this.
Retirement Plan Analytics is set to roll out Fiduciary-Plus, a plan management (as opposed to platform management) tool that provides 3(38) services and so much more—including fiduciary governance training, a fiduciary vault for documentation, annual fee benchmarking and advisory fee benchmarking.
Todd Timmerman, managing director of the Charlotte, North Carolina-based RPA, said Fiduciary-Plus will be available through Principal and Voya’s recordkeeping solutions in the coming months.
“We partner with about 80 advisors around the country whom I call ‘high integrity accommodators,’” Timmerman says when asked about the genesis of the offering. “We’ve had a solution for the last three years that allows us to offer a large plan consulting solution to the small plant market. We’ve grown very quickly, and we serve some very large plans, but what we’re doing is offering the same services from a fulfillment standpoint as with your large plans.”
So why Fiduciary-Plus, and why now?
He points to heightened employer expectations involving three key factors:
- Fiduciary awareness – “By this I mean all of the articles over the past 24 months, and the number of articles in The Wall Street Journal alone. I just presented a $3 million plan. Before I even sat down, the CFO asked me about a 3(21) and 3(38) and we had a 10-minute discussion just on fiduciary duties. That would not have happened three years ago.
- Litigation – “Litigation over fees in the large plan market has gotten all markets aware that they need to do a better job.
- Record keeper competition – “Record keepers have gotten very competitive and have significantly lowered their fees over the last seven or eight years.”
Timmerman claims a change in advisor among plan sponsors would typically take one month for every $1 million in assets—meaning, for instance, that a $5 million plan would take five months—but no longer.
“Because of the heightened fiduciary awareness, when an employer gets the chance to work with a fiduciary advisor, they are making a change quickly, since it’s already on their list.”
Fiduciary-Plus is what the name says, a traditional 3(38) fiduciary solution, but with the aforementioned expense benchmarking, advisory fee benchmarking, fiduciary governance training and the fiduciary vault.
“It’s giving an advisor and a client a solution that is going to give investment management, but also other items that so many employers don’t get, which is why it’s called Fiduciary-Plus.”
Billion-dollar plans expect to have their fees benchmarked and reasonable. They also expect their committees to receive training and (due to Tibble v. Edison) that it’s all well-organized.
“With something like this, you can spend more time on things like participated outcomes. There are a lot of platform management tools, but the phrase I use to describe this is ‘plan management tool,” Timmerman concludes. “You’re getting the 3(38), but you’re also getting fulfillment.”
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.
