LPL Financial LLC has launched a program that not only aims to educate workers as they retire and leave their 401(k) plans, but could also help keep retirees' rollover dollars within the firm.
The broker-dealer on Tuesday announced the release of its Rollover Results Program, a platform that includes the Retirement Results Desk, a specialist group that educates plan participants on the choices available for their 401(k) nest eggs. Specifically, the program is aimed at LPL advisers who specialize in working with retirement plans.
Once a worker decides to part ways with a plan sponsor, the firm sends the employee a letter that explains what the possible choices are and follows up to ensure that the newly departed or retired person understands the letter, according to David Reich, LPL's executive vice president, retirement platform development.
Employees can opt to stay with the plan or roll over their assets into an individual retirement account. The Retirement Results Desk will open IRAs for them and provide information on the rollover process. Staff members who are working with employees through LPL's Retirement Results Desk don't receive any financial incentive based on what the worker decides to do, Mr. Reich added.
Ultimately, separating employees who go with an IRA can choose to work with the LPL adviser who's overseeing their retirement plan if that adviser also works with retail clients. “The participant is making the decision,” Mr. Reich said. “We're not selling them into anything, but we're providing them with an option.”
If not, LPL can refer the employee to a wealth management adviser with the firm, working as a matchmaker.
Though the program helps LPL with rollover capture as employees part ways with the firm's plan sponsor clients, Bill Chetney, executive vice president of Retirement Partners at LPL, said that the tool was largely intended as a service to workers in the plans the firm currently serves.
“It's not so much about retaining assets — we can retain assets if they stay in the plan —but we really approach this from employees' profound need to have access to financial literacy and information,” he said.
