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Putnam’s Reynolds Takes Over Great-West Leadership Role in the U.S.

Though they were owned by the same parent and shared the same record keeping platform, Putnam and Great-West were viewed as separate companies, with two strong leaders who sometimes competed against each other. In a move to harmonize their retirement businesses, Bob Reynolds has been named president and CEO Great-West Lifeco, the U.S. holding company owned by the Canadian parent.

In his role as president and CEO of Putnam, Reynolds is effectively taking control of the parent firm’s U.S. retirement business. Charlie Nelson, president of Great-West Financial, will oversee the integration of G-W’s and Putnam’s retirement business and will report to Reynolds, as will Ed Murphy, head of Putnam’s DC business.

The move reflects the realization among even the largest DC record keepers that, in order to grow and compete in a deflationary DC market, scale matters and running separate operating units that compete against each other are luxuries they can no longer afford. The integration of Transamerica’s business and Fidelity collapsing structures and separate units are further evidence of this reality. Other providers like ING and MassMutual have acquired companies to compete in markets they do not serve, while those focused primarily on one market, like Hancock and JP Morgan, are trying to expand organically, which Principal seems to have done already.

Putnam, known for their innovative user front end and investments, has performed well in the mid and large advisor-sold DC market. Great-West, known for its record keeping prowess and ability to control costs, has made its mark in the small 401(k) market. Together, the retirement group has $220 billion and 5 million participants, the bulk of which comes from the G-W unit, which has a significant presence in the large 403(b) and government markets and also provides outsourced record keeping to other companies like American Funds.

So what does it all mean to plan advisors? Probably very little in the short term, since Putnam and GW will maintain their separate brands and sales forces. In the long term, the combination of people, assets, participants and distribution networks makes the group a serious force to be reckoned with and a player that will certainly be among the survivors if there is a nuclear war in the DC market — a war that could leave only five or so record keepers still standing, as some experts are predicting.

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