Tech-centric firm Fiduciary Shield by BidMoni announced a recent partnership with Cambridge Investment Research, Inc., a financial services firm focused on serving independent financial professionals, to help the latter more efficiently serve plan sponsors and grow its defined contribution business.
Spearheaded by BidMoni CEO Stephen Daigle and Mark Thornton, Cambridge’s Director of Fiduciary Services, the firms are rolling out the platform to Cambridge financial professionals through educational webinars and internal promotions.
“I think they saw an opportunity in that they have a lot of very solid wealth managers that either didn’t sell 401k plans or did very sparingly,” Daigle said when asked about the deal’s genesis. “That was always our vision—how do you get to these non-401k specialists? Technology can bridge the gap between a specialist and a non-specialist. What helped to push this partnership along was the state mandates going into effect, SECURE 2.0, and all the things that are saying, “Go help these 5 million businesses that don’t have a plan.”
Keeping it simple
A lack of understanding about plan complexity might hold some advisors back, something BidMoni’s simplicity is meant to address.
“How do you make it easy for these financial professionals while not sacrificing the compliance aspect and other things that have to happen at the broker-dealer level?” Daigle added. “That’s really where the vision came together. We’ve obviously built technology towards creating efficiencies and streamlining processes, while Cambridge has incredible wealth managers. They have a pocket of financial professionals focusing on the space, but many dabble or don’t do it. We believe they interact with small businesses every day, so they’re best equipped to help these millions of companies that need access to a retirement plan.”
When asked if Cambridge financial professionals requested the service or if it would take a significant marketing effort to ensure adoption, Thornton said it’s both.
“It’s all across the board,” he noted. “We know there’s opportunity in the 401k space, so you dig in and examine why advisors aren’t dealing with it. The complexity is certainly one of the issues, and ease of use in a compliant manner became really important. If it’s hard and takes a lot of their time, they’re not going to do it because they have the wealth management aspect where they could be making more, or at least not spending time on something that might not pay off.”
For those currently in the 401k business, either as part of their business mix or plan specialists, many might not engage with startup plans or those with fewer assets due to cost inefficiencies.
“The time it takes for the onboarding process, and paperwork wouldn’t make it cost-effective,” Thornton said. “So, some financial professionals have embraced the platform. We’ve done demos with them, and they absolutely love the concept. It makes it easier for them. They might get a smaller plan that begins to grow, and then when that plan reaches critical mass, whatever number they might have set for themselves, they’ll offer their full suite of services.”
While (compliant) simplicity is paramount, flexibility and a feeling of “having it their way” is also critical and something Daigle said is a platform feature.
“They are independent advisors, and it’s important for them to have the flexibility to do business in the way that works best for their clients and their unique business models.”
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.