While many broker dealers exited the DC record keeping market almost 10 years ago to avoid the appearance of conflicts of interest, Merrill Lynch retained their record keeping for mid-size and larger plans. It did, however, sell its small market record keeping business to Ascensus a while back, creating a platform of nearly 20 outside providers, and even sold its much larger asset management division to BlackRock. As a result, today Merrill is arguably in a unique position to take advantage of some of the trends in the DC market.
Joe Mrozek, head of Corporate & Middle Market Business Development and Advisor Programs at Bank of America Merrill Lynch, sees three major opportunities for DC advisors going forward:
- Financial wellness — engaging beyond the plan sponsor to reach participants.
- Linking health care and retirement — Americans are concerned about both, so HSAs look to have a big future.
- Simplifying the investment message — Eliminating confusion that often arises with multiple share classes.
Though Mrozek sees interest in CITs, he thinks that smaller and mid-size plans will still use ’40 Act funds.
“Groups of specialists DC advisors are forming within our ranks,” notes Mrozek. “There are 115 specialty teams called Retirement Benefits Consultants comprised of over 250 advisors with AUM of $70B+. Growth is coming inorganically from recruiting and organically within the ranks through training and advisor development programs.” Regardless of some experts’ opinion that plan advisors will leave big broker dealers as those BDs grow more concerned about the IRA market in the wake of the DOL’s conflict-of-interest rule, Mrozek sees a growing future at Merrill for these specialists.
There are growing needs by advisors for:
- education and mentoring;
- cross-selling to centers of influence and wealth management advisors;
- providing a holistic financial solution to individuals, especially around health care costs in retirement; and
- a move toward integrated groups.
It seems that Merrill sees the same trends — and is positioning its Retirement Benefit Consultants to take advantage.
