Innovating Products &
Creating Value for the
Independent Advisor Practice
Presented By:
Sylvain Templeman
The AUI Marketplace
$320B
*Source: Ed Slott Newsletter – May 2015
Rollovers
+
Annually
The Pacific Financial Group
Incorporated in 1984 & based in Bellevue, Washington, TPFG is an
institutional money manager that has formed a strategic partnership with
only a limited number of independent investment advisors to give you the
best of both worlds; professional day-to-day asset management that is
customized and coordinated for your specific goal and objectives by your
local investment advisor representative.
Over time we have evolved over time to now offer our 3rd party investment
management services on four distinctly different platforms.
1) Separately Managed Account (SMAs)
2) Managed Portfolios (MPs)
3) Variable Annuity Optimization (VAO)
4) Retirement Plan Management (RPM)
& 401(k) Pre-Rollover Solution
401(k)
PRS
Pre-Rollover Solution
Help your client with their 401(k), 403(b) & 457 Accounts.
* While your client is employed
* While your client is contributing to their 401k, 403b or 457
* Without you doing an in-service transfer or rollover
* Without being the Rep of Record on the Plan
.....it can now be an Asset Under Management without your
client writing a check or having fees pulled from another account!
401(k)
PRS
Pre-Rollover Solution
With almost 30 years of experience and as a pioneer in the ‘Self-Directed
Brokerage Account’ space, we have solved for the three major obstacles
facing Financial Advisors trying to help their clients with 401(k)s, 403(b)s &
457 Accounts:
1) Complexity - streamlined AUM gathering process
2) Compensation - RIA & IAR are compensated by the AUM
3) Compliance - TPFG accepts full fiduciary role & responsibility
401(k) PRS is a turnkey AUM program that WILL change
the nature of your rollover business!
Pension Protection Act 2006
Highlights:
•
More investment options
•
Access to investment advice
•
Risk managed portfolios
•
Brokerage window options
•
Fiduciary Accountability
for plan vendors, sponsors and employers
Institutional Access
Fidelity
Self Directed Brokerage Account (SDBA)
Client’s Retirement Account
401k – 401a – 403b - 457
‘Core’ Investment Options
Lifestyle and
Target Date
Funds
Fixed Income,
Real Estate,
Money Market
Funds
Value, Growth,
Global Funds
Large, Mid,
Small Cap Funds
‘Self-Directed’
Brokerage Account
• Custom Investment Solution
Self Directed
Brokerage Account
• Incorporating: Your Age
Years to retirement
Risk/reward assessment
Minimizing overlap
The Value of Advice
4.20%
3.32%
‘about’ 3%
Equity
5.03%
Fixed Income
1 - Help in Defined Contribution Plans: 2006 Through 2012 – AON/Hewitt Study 2014
2 – How American Saves – A report on Vanguard defined contribution plan data - Vanguard 2012
3 – Quantitative Analysis of Investor Behavior – Dalbar’s 20th Annual Study 2013
The Value of a Pre-Rollover Solution
Does your AUM work
for you or against you?
Traditional Rollover Case
Profile: Client A – “Ready to Roll”
Age:
65 years old
Status:
Retiring in a month
Asset Value:
$300,000
Objective:
6% Income to augment Social Security
R.O.R. Target:
6% annually
Profile: Client A – “Ready to Roll” is a hypothetical illustration based on the numbers listed above
Traditional Rollover Case
Asset Value after 10 years
$300,000
$290,000
$280,000
$270,000
$260,000
$251,272
$250,000
$240,000
$230,000
$220,000
1
2
3
4
5
6
7
8
9
10
Calculation facilitated @ http://www.flexibleretirementplanner.com/wp/planner-launch-page/
Profile: Client A – “Ready to Roll” is a hypothetical illustration based on the numbers listed on the previous slide
Case for a Pre-Rollover Solution
Profile: Client B – “The Catch Up Kid”
Age:
55 years old
Status:
Retiring in 10 years
Asset Value:
$125,000 + $20,000/yr. in contributions
Objective:
Growth & Accumulation with Risk Mgt
R.O.R. Target:
8% annually
Profile: Client B – “The Catch Up Kid” is a hypothetical illustration based on the numbers listed above
Case for a Pre-Rollover Solution
Asset Value after 10 years
$600,000
$510,691
$500,000
$400,000
$300,000
$200,000
$100,000
$1
2
3
4
5
6
7
8
9
10
Calculation facilitated @ http://www.flexibleretirementplanner.com/wp/planner-launch-page/
Profile: Client B – “The Catch Up Kid” is a hypothetical illustration based on the numbers listed on the previous slide
Roadmap to
Compounding your AUM
Set your sights on the right assets and finally let your
AUM work for you, not against you!
Ideal Client:
Age 40-50
Behind on saving for retirement
Working Professional
Keys to success:
1) Consistently adding 1 new client a month with an average balance of $125,000
2) Encouraging clients to save more for retirement
3) Average $20,000/yr. in combined contributions (employee & employer match)
4) Help clients & prospects where they need and want it most!
Your Practice in 5+ years
Assets Under
Management
Annual
Contribution
$14.97M
$12.68M
$9.23M
$6.27M
$3.77M
$1.69M
$240,000
$480,000
$720,000
$960,000
Year 1
Year 2
Year 3
Year 4
** 8% ROR used for AUM growth illustration
$1,200,000
Year 5
$1,200,000
Year 6
Your Practice in 10 years
Assets Under
Management
Annual
Contribution
$26.23M
$23.07M
$20.16M
$17.46M
$14.97M
Revenue
$12.68M
$1,200,000
$1,200,000
$1,200,000
$1,200,000
Year 5
Year 6
Year 7
Year 8
** 8% ROR used for AUM growth illustration
$1,200,000
$1,200,000
Year 9
Year 10
$104.93M
Your Practice in 10 years
1 Client a Month
4 Clients a Month
Assets Under
Management
Assets Under
Management
Annual
Contribution
Annual
Contribution
$50.71M
$36.90M
$26.23M
$25.07M
$15.07M
$12.68M
$9.23M
Revenue
$6.76M
$6.27M
$4.88M
$4.88M
$3.77M
$1.69M
$1.92M
$0.96M
Year 1
Year 2
** 8% ROR used for AUM growth illustration
$0.72M
$2.88M
Year 3
$0.96M
$3.84M
Year 4
$1.2M
Year 5
$1.2M
Year 10
One Product - Two Solutions
401(k) Pre-Rollover Solution
For Your Clients & Prospects
For Your Business
The Help
They Need
Compounding
AUM Bi-Weekly
The Advice
They Want
Less Maintenance
Service Model
The Peace Of
Mind They Deserve
Increasing Practice
Value & Scalability
AUM Gathering – Getting Started
If you believe that a client deserves quality, independent investment advice on
all their assets and that financial planning doesn’t begin the day they retire,
then the best way to increase your current AUM & revenue is to look for
different types of clients/assets already in your practice.
Your new activity begins with:
Existing Client Identification (Statements)
TPFG will help you with:
Presentation
Paperwork
Your Time is Now
3 reasons to consider this in your business mix
1) Your Competition
Every Retirement Plan
Every Financial Services Company
Every advisor, Including Robo Advisors!
Your Competition
Betterment
Robo-advisors are a class of financial adviser
Fidelity
– P.A.S. @ Work
that provides portfolio management online
with minimal
human intervention. While
VALIC
– G.P.S.
their recommendations may vary, they all
Financial
Engines
employ algorithms
such as Modern portfolio
theory that originally served the traditional
AssetBuilder
by Ibbotson
advisory community, which has relied on
algorithmic templates
to conduct portfolio
Morningstar
Optimizer
management since at least 2005.
Schwab Intelligent Portfolios
AUM = $19 billion as of December 2014*
Wealthfront
Private Label (ex: SigFig’s Algorithm)
* study by Corporate Insight
Your Time is Now
3 reasons to consider this in your business mix
1) Your Competition
Every Retirement Plan
Every Financial Services Company
Every advisor
2) Changing Demographics
80 is the new 60
Changing Demographics
Baby Boomer: Pioneers of a New Retirement Paradigm
**Source: http://www.transamericacenter.org/docs/default-source/resources/center-research/tcrs2014_sr_three_unique_generations.pdf
Your Time is Now
3 reasons to consider this in your business mix
1) Your Competition
Every Retirement Plan
Every Financial Services Company
Every advisor
2) Changing Demographics
80 is the new 60
3) Changing Regulations
FINRA Investor Alert
Treasury Clears the Way for Annuities in 401(k)s
Regulatory Pressure
401(k) – Recent Changes
•
Reduced Investment Options
•
Computer Generated Investment Models
AKA - TDFs
•
Automatic Enrollment (opt out vs opt in)
•
Fee Disclosure – 408b2
•
404c Compliance
•
Brokerage Windows
Future Lifecycle of an IRA Rollover
90%
Your AUM Marketplace
Accumulation
Robo - Conditioning
$320B
Distribution
Your Time is Now
"If you want something you've
never had, you have to do
something you've never done.“
Thomas Jefferson
THANK YOU!