More and more advisors who focus a significant percentage of their time on DC plans are joining teams to leverage scale, technology and brand. But what does a team have to do to be successful? In an InvestmentNews video, Pershing’s Mark Tibergien tackles the question of how a local firm can branch out and become a national concern.
Tibergien notes that firms are more likely to go broke during their growth phase than at any other point. They struggle with managing finances as they incur costs that do not generate profitable revenue immediately. Other challenges include:
• Managing multiple locations — the farther away they are, the harder they are to manage
• Creating a consistent client experience — advisory services tend to be very personal
• Cost controls
• Compliance oversight and risk
Tibergien recommends that firms looking to branch out have a clear client and business focus; firms which deal with high-end or higher-revenue clients are more likely to succeed. He also prefers the merger approach to the DIY approach (that is, building from a core location serially like Starbucks, for example, which started in the Pacific Northwest) and recommends creating a leadership development program.
More groups like Sageview, Captrust, Sheridan Road, Pensionmark and RBG are emerging. Additionally, P&C firms are creating retirement practices, like Lockton and Gallagher. Other successful practices are looking to recruit solo plan advisors, as are benefit shops.
But so far, no one has created a totally integrated, national benefits firms serving corporate retirement, wealth, health care and P&C clients. Lockton and Gallagher have come close, but Gallagher recently eliminated Mike DiCenso’s position as retirement plan practice leader and Lockton has yet to hire one. One hurdle: Insurance producers tend to view plan advisors as “zoo hunters” who produce few if any new client relationships.
