Goldman retirement exec joins J.P. Morgan Retirement Plan Services

Bill McDermott, head of defined contribution, to lead sales at J.P. Morgan unit

Jun 4, 2012 @ 3:32 pm

By Darla Mercado

J.P. Morgan Retirement Plan Services LLC has brought Bill McDermott on board as head of sales and client solutions at the massive record-keeping unit.

He joins from Goldman Sachs Asset Management, where he had led the defined-contribution business.

In the newly created role at J.P. Morgan, Mr. McDermott will report to David Musto, chief executive of the Retirement Plan Services business. He will lead teams that are responsible for distribution, relationship management and the delivery of investment and participant communication, and education services.

Mr. Musto said that Mr. McDermott will have three major responsibilities. He will enhance the alignment of client-facing solutions, including communication and education, for plan sponsors and advisers. He is charged with maintaining and enhancing leadership in the large- to megaplan market, as well as bring the firm's full service administrative platform to the midsize plan level. And he will continue to bolster the strength of J.P. Morgan RPS's client-facing team and best practices around consultative services.

“We're focused on complementing an existing strong pool of talent with some additional proven leaders like Bill,” Mr. Musto added.

Mr. McDermott brings a background steeped in working with distribution channels: He was an executive vice president at Axa Equitable Life Insurance Co., where he developed new distribution channels for annuities and other investment products.

That background is in tune with what some say J.P. Morgan aspires to achieve with its retirement unit.

“Channel distribution is going to be key for J.P. Morgan as it segments the [retirement] marketplace to serve large and small market plans,” said Marty Schmidt, a principal with HS2 Solutions, a consulting firm that provides employee-benefit services.

“J.P. Morgan RPS wants to be more than just a record keeper; they want to be a banker for life, and do asset management and advisory services,” he added. “Bill can help articulate that and bring it into focus.”

Mr. McDermott helmed Goldman's defined-contribution unit during a pivotal time for the firm, joining in February 2010, when Goldman began pushing to expand its investment-only defined-contribution business. It is already among the largest managers of defined-benefit assets.

Part of that push in 2010 was the development of custom target date funds, which the firm eventually had planned to supplement with a guaranteed-income component.

Goldman Sachs continued making a push in retirement this year when it acquired stable-value manager Dwight Asset Management from Old Mutual Asset Management. The investment bank closed the deal last month.

Michael Wong, a Morningstar Inc. analyst who covers Goldman Sachs, noted that Mr. McDermott's departure was an important one for the firm's asset management unit, but the departure shouldn't suggest that Goldman will turn away from the DCIO business.

“It's a huge setback for that push — it seemed like they were trying to build out defined contribution,” Mr. Wong said. “But unless we see more departures in that area, it seems like something they should stick to. Asset management is an area they're emphasizing: it's light on capital and has a high return on capital.”

Goldman Sachs spokeswoman Andrea Raphael noted that Jim McNamara, managing director, and Craig Russell, head of the institutional business at Goldman Sachs Asset Management, are overseeing Mr. McDermott's duties. She added that there are no immediate plans to replace him.

David Musto, chief executive officer of JP Morgan's Retirement Plan Services unit, noted that Mr. McDermott would have three major responsibilities. First, Mr. McDermott will enhance the alignment of client-facing solutions, including communication and education, for plan sponsors and advisers. Secondly, he would maintain and enhance leadership in the large-to-mega plan market, as well as bringing the firm's full service administrative platform to the mid-sized plan level. Finally, the new executive will continue to bolster the strength of JPMorgan RPS's client-facing team and best practices around consultative services.

“We're focused on complementing an existing strong pool of talent with some additional proven leaders like Bill,” Mr. Musto added.

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