Fund companies and service providers are offering webinars, seminars and handouts to help advisers handle the onslaught of questions they're getting from 401(k) participants and employers in this volatile market.
In some cases, fund companies have even stepped up their efforts to help advisers get leads on new 401(k) business, because they know that advisers' are tied up right now, trying to ease the worries of their clients. Some fund companies have made available their top fund managers to answer advisers' questions directly.
The proactive response from fund companies and providers is welcomed by some advisers but seen as a sales pitch by those who would prefer not to be hassled.
Even though vendors are trying to be helpful, William Beale, an adviser with Henderson Brothers Retirement Plan Services LLC in Pittsburgh, which manages about $350 million in assets, said he's cynical that many of these companies are using the down market to get more sales.
"We're cautious about how much assistance we accept from our service providers, because of the independence of our business," said Mr. Beale.
"In our market, we write a substantial amount of business, and there's no question that some of these vendors are using any tool they have to get some shelf space," he said. "I can't blame anyone for trying to create revenue, but we don't play along. We just don't think it makes sense."
Boston-based
Fidelity Investments, The
Charles Schwab Corp. of San Francisco, Great-West Retirement Services of Greenwood Village, Colo., New York-based Merrill Lynch & Co. Inc., and The Hartford (Conn.) Financial Services Group Inc. are among those that have bolstered their efforts to help advisers who are working with 401(k) plans.
The Hartford has begun generating more leads for advisers and following up with leads in 401(k) plans, said Don MacQuattie, vice president of the strategic-relationship group.
"With the market moving with such volatility, if the adviser has a big retail business, they're glued to the office. We've asked wholesalers to look at the pipeline and re-engage them via telephone. What we want to do is allow the adviser to rely on us to try and bring business in," Mr. MacQuattie said.
The Hartford sells its retirement accounts only through advisers, so none of the sales that the company assists are direct-sold. The company is planning to help with leads until the end of the year, Mr. MacQuattie said.
Since advisers have been so busy, the prospect of getting assistance with leads sounds appealing, said Bart Bonga, a vice president at Rothschild Investment Corp. in Chicago, which supervises $2 billion in assets and celebrated its 100th anniversary this year.
He has appreciated speaking directly with top fund managers. Most recently, the American Funds, which are owned by The
Capital Group Cos. Inc. of Los Angeles and advised by Capital Research and Management Co. of Los Angeles, began a road show, speaking with advisers, Mr. Bonga said.
"
American Funds did this because everyone's so concerned," he said. "The last time American funds was this proactive with a nationwide tour was Oct. 6, 2002, and the bottom was Oct. 8, 2002."
Maura Griffin, a spokeswoman for
Capital Group, declined to comment.
But other fund companies said they've been proactive by making their top managers accessible to advisers.
Since the market turmoil began, Fidelity has communicated to advisers through webinars and conference calls with the company's top portfolio managers, spokesman Stephen Austin wrote in an e-mail. Fidelity's Market Analysis Research and Education Group has also written articles aimed at advisers. They provided some advisers a template of a letter they can send to investors regarding questions about Fidelity's strength and stability.
The biggest change at Schwab has been bolstering communication to advisers, said Michael Cianfrocca, a Schwab spokesman. "If there's something we're doing different, it's stepping up communications," he said. "We're making sure advisers know what our perspective is and that they understand the safety and security at Schwab."
Getting to speak with fund managers during this down market has been helpful to Don Stone, president of Plan Sponsor Advisors LLC in Chicago, which manages about $6 billion in assets.
"What we see is, the fund companies and providers are more willing to provide some tools of different kinds," he said. "Sometimes they're able to provide access to their portfolio managers more so than in the past."
Mr. Stone appreciates fund managers' being more available than in the past but said he wishes they'd give out specific information without his having to ask first.
"It'd be nice if they were more proactive getting some of the information about their holdings and trading restrictions they may have on certain types of securities, as opposed to us going to them," he said.
At Merrill, the retirement group recently crafted a presentation for its advisers to give to 401(k) participants, said Kevin Crain, managing director of institutional client relationships for the Merrill Lynch Retirement Group in Pennington, N.J. He is based in Hopewell, N.J. Merrill's defined contribution business services about 1,700 employers with about $90 billion in assets and 2.7 million participants.
Mr. Crain said call volume from participants has increased by 25% in recent months, and participants have been transferring money into safer accounts — factors that led his department to set up a presentation for participants.
"We've tried to build a range of tools that can be used for the adviser," he said.
Having a presentation available to give to plan participants has been a huge help for Bruce Gsell, an Edison, N.J.-based adviser for Merrill Lynch. He's been an adviser in the retirement arena for 32 years and said he's never had this many calls for help from employers and employees.
"I've never been so booked. People in these plans are scared," Mr. Gsell said. "I've never seen anything like it."
In the past two months, Mr. Gsell has held more than 20 401(k) seminars for companies' employees to ask questions about the market. Typically, he holds about one seminar each quarter.
At 401(k) provider Great-West, replenishing the website daily has been the best approach to keeping advisers up-to-date on news and information, said senior vice president Chris Cumming.
"The best way to depend on timely information from us is to use the website," he said. "We need to deliver these answers to them as quickly as possible."
Websites have been helpful, said Mario Giganti, a certified public accountant and adviser with CornerStone Capital Advisors in Uniontown, Ohio, which manages $225 million in assets for personal clients. His firm has $100 million in 401(k) assets under advisement.
Mr. Giganti said the fund companies' websites are often the first place he goes to get information.
"Most of the mutual funds in the 401(k) practice have been very proactive providing us [with] their positions about what they're doing," he said.
Sean Walters, president and senior consultant of Cook Street Consulting in Denver, said he wants only specific information from fund companies. His firm services more than $4 billion in assets.
"Everybody's reaching out proactively," Mr. Walters said. "I don't want more charts on what the market's done since 1896. I want vendors to be accessible and responsible to answer specific questions."
E-mail Lisa Shidler at [email protected].
