Fiduciary Shield by BidMoni launched in 2018 to support the fiduciary requirements of those managing employer sponsored retirement plans.  We are excited to launch our newest product feature – 401(k) Prospector.  Registering with Fiduciary Shield gives advisors access to unparalleled technology designed to support the full lifecycle of 401(k) plan management. From plan prospecting --> plan proposal --> plan onboarding --> plan monitoring – the tools you need to win more 401(k) plans are all here. 

401(k) Prospector 

We launched 401(k) Prospector this year as a tool to help advisors identify potential 401(k) business opportunities.  401(k) Prospector highlights all plans filing an annual Form 5500 within 10 miles of an advisor's office.  A national plan search can also be conducted by either the employer name or plan name.  Our database contains information on over 800,000 plans helping advisors identify important plan information such as total plan assets, total participants, and key plan contacts.  Plan contacts are even identified on LinkedIn, giving advisors another opportunity to connect. 

Retirement Plan Wellness Reports 

Retirement Plan Wellness Reports are designed to help advisors identify fiduciary risk factors through annual Form 5500 filings.  Wellness Reports empower advisors to be fiduciary experts by helping to identify more than 20 ERISA-specific fiduciary risk factors on a plan by plan basis.  Advisors can easily identify important changes in plan demographics that may trigger the need for a plan fiduciary to review plan fees or conduct a competitive request for proposal. 

Competitive Proposal Requests 

Fiduciary Shield offers a competitive request for proposal platform allowing advisors to request proposals from more than 20 active recordkeepers.  Recordkeepers who receive a proposal request through Fiduciary Shield are aware they are bidding on a competitive opportunity, approved by the employer, and have agreed to customize their proposal responses within seven days of the request being submitted.  

Transparent Analysis 

Proposals submitted by recordkeepers through Fiduciary Shield are presented to advisors in a simple and transparent format, allowing advisors to easily compare proposals side by side.  Leveraging Fiduciary Shield’s technology allows advisors to present a visually compelling comparison of a plan’s features, investment offerings, and fees. 

Document Procedures & Monitor Providers 

ERISA requires plan fiduciaries to put proper controls in place which support both monitoring service providers and documenting fiduciary procedures.  All requests for proposal, proposal responses, forms, and reports are documented to help meet ERISA regulations.  Fiduciary Shield also automates quarterly and annual plan monitoring reports to help advisors and plan sponsors meet their ongoing requirement to monitor providers.   

In our society an individual's success is often viewed through a lens that, for many, has a significant focus on an individual's income. Within the financial services industry the lens used to judge success is particularly narrow, mainly focused on:  increasing assets under management, increasing revenue, and ultimately increasing income. 

As a result, the most successful financial advisors are typically tremendously talented sales people.  Their communication skills, usually never better than when they are pursuing a potential client, allow them to explain and simplify complex financial problems with ease. 

Yet one of the most common complaints that I hear from retirement plan participants and plan sponsors is that they never see or hear from their financial advisor. 

I think that may be because financial advisors find themselves caught between their commitment to service existing clients and chasing the annual trophy of success by narrowing their focus towards gathering assets and increasing their income. 

In order to achieve lasting and meaningful success in the retirement plan space, advisors must commit to a service model after landing an employer's plan. 

The Department of Labor has created a roadmap of success for financial advisors looking to build their practice in the retirement plan space.  Financial advisors may play any of the following roles depending on the needs of the plan sponsor: 

• Plan Design & Provider Selection – Plan sponsors are fiduciaries and as such are required to choose a plan using a prudent process.  Many plan sponsors will look for a financial advisor to make recommendations about different providers, fees, and investment options.  The DOL also expects that the plan sponsor will conduct a competitive request for proposal for plan services every 3-5 years. 

• 3(38) Investment Manager – As a 3(38), a financial advisor has legal discretion to make plan changes.  A financial advisor with this role has also taken on the role of a fiduciary. 

• 3(21) Investment Manager – As a 3(21), a financial advisor makes recommendations to the plan sponsor but does not have discretion to make changes on their own.  A financial advisor in this role is also considered a fiduciary. 

• Employee Education – Plan sponsors are required by the DOL to provide education regarding the plan to participants.  This is typically the main role of a financial advisor who is servicing a retirement plan. 

Advisors should be able to clearly articulate the roles that they are fulfilling for the plan sponsor and what their compensation will be for that service. 

One of the effects of the DOL’s years long public review of the fiduciary rule is that many plan sponsors are putting plan fees under a microscope while reviewing the role of their financial advisor. 

Fiduciary Shield by BidMoni was created for plan sponsors and advisors to simplify the process of achieving many of the fiduciary requirements of managing a retirement plan.   

If you are responsible for any of the following:  

• Conducting a competitive RFP  
• Analyzing service provider proposals 
• Fee benchmarking 
• Investment benchmarking 

Please visit https://fiduciaryshield.bidmoni.com for more information about leveraging the power of Fiduciary Shield by BidMoni to better service your clients and win more retirement plan business. 

A new study from global research and consulting firm Cerrulli Associates finds that digital offerings will not replace advisors, rather they will improve the way that advisors form relationships with their clients and scale their practices. 

The study titled U.S. Retail Investor Advice Relationships 2018: Optimizing Engagement was the subject of recent news articles that can be read here and here.  

According to the articles, “digital engagement ‘will be a core component of every firm’s wealth management offering,’ the report says — and Cerulli estimates that total assets in the digital advice segment will reach approximately $295 billion by the end of this year and exceed $1 trillion by the end of 2023.” 

The report also analyzes the impact of fee compression on investor behavior and concludes that while fee compression is a frequent topic of concern among wealth management providers, relatively few investors cite fees as their primary determinant in provider selection. 

Clients today have an increasingly high expectation for the use of technology in financial services yet expect a human to be available to help them along the way.  Advisors leveraging digital tools like Fiduciary Shield by BidMoni with their clients are creating more efficient face to face meetings while improving their relationship management practices.   

Retirement plan sponsors play the role of a fiduciary even when they hire a financial professional to make plan decisions on their behalf.  The ongoing saga of Vantage Benefit Administrators should serve as a cautionary tale for plan sponsors and financial advisors. 

On October 23 a federal grand jury indicted professional fiduciaries, Jeff and Wendy Richie, co-owners of Vantage Benefits Administrators for allegedly embezzling $14.5 million from retirement plans that they managed.  Vantage Benefits Administrators marketed itself as a retirement plan third party administrator and professional 3(16) fiduciary to plan sponsors. 

This case is particularly troubling for the financial services industry because Vantage CEO Jeff Richie had been previously been sanctioned in 2008 by the Securities and Exchange Commission and had been barred from the investment business for three years “for conducting an unregistered and fraudulent offering of securities in the retirement-services company he was running at the time.” 

Organizations that provide third party administration services and act as a 3(16) professional fiduciary are not regulated by the financial services industry and so the SEC’s sanctions would not have applied to Richie’s operations as a third party administrator to retirement plans.  If convicted on all counts, the Richie’s face up to 81 years in federal prison. 

At least one financial advisor that referred business to Vantage Benefits Administrators has also found himself tangled in litigation over these allegations.  Allpoints Inc., an architectural firm, filed suit against World Equity Group and advisor Todd Rollins for recommending Vantage Benefits Administrators as their 401k TPA. 

According to the suit, as a result of Rollins’ recommendation, Allpoints’ 401(k) plan lost at least $438,919 from January to May 2017 as Vantage and Richie allegedly withdrew assets from the plan. 

Financial advisors should keep a close eye on the outcome of the Allpoints case and understand the risks of making referrals to other business professionals involved in the administration of retirement plans.