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Opportunities and Challenges for Plan Advisors

Sometimes, the DC industry focuses on the DOL’s proposed conflict-of-interest of rule like it affects everyone the same way. But not only could the rule affect advisors differently than it could record keepers, broker dealers, RIAs and plan sponsors, it could also affect the three types of plan advisors differently.

So before we even tackle the question of the effect of the DOL’s rule on advisors, let’s review the needs and opportunities for the three segments of plan advisors. Setting aside IRA rollovers for a minute, here are the opportunities and challenges for each segment:

Emerging Advisors (includes Accommodators and Blind Squirrels)

Needs:


  • Basic understanding of DC market

  • Fiduciary training to protect them, their clients and their BD/RIA


Opportunities:

  • Partner with experienced DC advisors within their BD/RIA

  • Become a specialist

  • Do nothing and watch other DC advisors pick off their wealth management clients that are within the specialist’s plan

Core Advisors ($25 million to $250 million)

Needs:


  • Substantial training beyond technical aspects and fiduciary compliance, including plan optimization, practice management, and sales and marketing


Opportunities:

  • Grow into Elites or join teams that Elites are building

  • Leverage DC plans to build wealth management practices


Elite Advisors (more than $250 million, including Super Groups)

Needs:


  • Talk to other advisors like them in a safe, interactive environment

  • Distinguish their service offerings in a sea of sameness with deflating prices

  • Train new advisors within their practice

  • Move down market where margins are better


Opportunities:

  • Recruit and partner with Core and Emerging Advisors in their BD

  • Develop custom investment products

  • Create an integrated retirement/wealth management/benefits business


I’ve posed a question to a number of industry experts that no one seems to be willing to answer: Does the DOL rule benefit the DC advisor expert more than the dabblers?

What do you think? Be brave!

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