Providing individual advice to plan participants can be difficult for many reasons. Those who have figured it out, however, have shown great improvement in outcomes. The challenges include scale (working with low-balance participants), technology (moving money from one money manager to another within a closed record keeping system) and conflicts (how the DOL will allow advisors to work with participants in their plans), as well as getting participants to engage. Some broker dealers, like LPL, for example, are making a real run at this.
One advisory group, Scarborough Capital, has been working on this problem for almost 25 years. (Scarborough also makes their service available to other advisors.) Working within a participant’s account, they manage the trading, billing, reallocating, rebalancing and anything else employees need regarding their portfolios.The rollover retention of Scarborough’s clients is way above the industry average.
