M Financial is arguably a different broker-dealer than most. It’s owned and run by their 150 member firms, many of which focus on the non-qualified COLI market, which gives them a different perspective.
Along with the Labor Department’s fiduciary regulation, Dave Watros, the firm's V.P. of Corporate Benefits, and Ivana Polonijo, Manager of Retirement Services, also see health care, tax changes and state retirement initiatives greatly affecting advisors, who must become more efficient through technology and even look to become total benefits advisors.
“There’s a redefinition of the advisor profession, turning from a focus on sales to becoming a business person,” notes Watros, who sees these forces moving plan advisors to look to manage other corporate benefits. “The focus on retirement will move to a focus on retirement income and advisors will be tasked with security management, which will include disability insurance, long-term care and annuities to mitigate long-term risk — acting like a DB plan.” Large DB plans are selling their pension plans to insurance carriers in what is called risk transfer. Will the same thing happen to individuals — who are essentially managing a private DB plan?
Though M Financial might be one of the few BDs small enough and sufficiently focused on insurance products to manage the shift from retirement to benefits brokers, Watros admits, “Only a
few of our member firms have made the transition.”
“You don’t need to be an ‘ultra specialist’ to be proficient in the DC market,” note Polonijo. “You just need to be proficient and become more holistic and multi-disciplined.”
The newly formed super groups like GRP are owned and run by their advisors even though they belong to a larger BD. Will smaller BDs like M Financial, which has been around for awhile, and Hightower, formed within the past five years, that are run and owned by advisors take hold?