Genworth Financial Wealth Management Inc. on Monday launched Retirement Connections, a set of retirement plan options that financial advisers can offer to their small-business-owner clients.
“Business owners are overwhelmed with the affairs of running a business,” said Michael Kim, senior vice president of business and channel development. “The last thing they have time for is to ensure the optimal line of investment options in a 401(k) plan. That's where we come in.”
Retirement Connections includes two types of investment vehicles for small-business owners to manage their employees: a managed-account asset allocation model with six different types of guided-portfolio options and an exchange-traded-fund option that currently provides access to eight different exchange-traded funds (five from The Vanguard Group Inc., two from BlackRock Inc.'s iShares and one from Pacific Investment Management Co. LLC).
“For those participants who wanted to self-direct, we offer the lowest-cost products available,” Mr. Kim said. “For those employees who don't know which way to go, we say to go with the managed-account route.”
The third-party administration and record keeping will be performed by an outside firm, but advisers will have access to these services as well as all of the investment offerings in Retirement Connections through an integrated website.
Based on Genworth's own research, many advisers have small-business owners as clients. The strategy with Retirement Connections is to help them extend that relationship by giving the adviser access to the currently inaccessible pool of funds in retirement accounts.
“If the adviser is a fiduciary, they can't use [IRA] rollover,” Mr. Kim said. “Genworth takes on fiduciary responsibility through [Employee Retirement Income Security Act] Section 3(38), which will take away barriers for advisers to capture rollover opportunities. This is one of the great advantages for financial advisers entering the retirement space.”