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.”