A new service promises to dramatically reduce the time retirement plan advisers spend getting quotes for their 401(k) clients.
Benetic, which launched in January, is a comparison-shopping site that generates quotes based on investments and record keepers, which vary in pricing and services. That saves advisers the time of having to contact plan providers individually and wait for responses, according to the firm.
So far, about 100 advisers, including those from 11 of the 15 biggest aggregator firms, have used the service, which recently began including quotes for pooled employer plans, Benetic CEO Ray Conley said. Some broker-dealers are also using it, he said.
“What we allow advisers to do is pick any lineup they want. They can pick any record keeper they want. They don’t have to choose anything,” Conley said. “It’s always free to the adviser. They don’t pay anything, and we don’t make money off of [what they choose].”
More than 20 record keepers now participate as partners, meaning that they provide pricing information but do not compensate Benetic for inclusion, according to the company.
The business makes money from “platform fees” it receives from some asset managers. Those firms provide more than 30 collective investment trusts that are specific to Benetic and reflect the lowest-cost versions of those products, the firm said.
“We’ve got a really good deal with one of the biggest asset managers in the market,” Conley said.
“As a fiduciary, if you’re going to select a fund, you should probably pick the one with the lowest cost,” he said.
For their part, asset managers can benefit from getting more distribution in 401(k)s, he said.
The platform fee model is not entirely different from Empower Select, which caters to small and midsize employers and charges mutual fund providers a fee to be included. A distinction, however, is that Benetic itself is not a record keeper, and it includes the full universe of investments available through record keepers in its comparison service.
This month, the company added several PEPs, including plans from Transamerica, Lockton and Paychex.
Despite promising to save advisers “a minimum of several hours of valuable time on every proposal,” it does not characterize itself as a disruptor.
“We’re not being disruptive. We’re not trying to break relationships … There is a tremendous amount of inefficiency" in what is now a manual process, Conley said.
Record keepers benefit from getting more opportunities to show the value they provide, leading to the potential for more deals, even if they are not the lowest cost, he said. They also save time by not having to respond to individual requests for quotes from plan advisers, he noted.
“The industry has suffered over the past several years because of fee compression,” Conley said. “We’re about helping people increase value. That’s a fundamental premise here.”
The quotes that one adviser gets might not be the same for another, as plan providers have pricing deals with different firms, he noted. Further, the quotes include a button advisers can click to get in touch with a wholesaler from the plan provider, and they can potentially negotiate fees further.
“We let the record keepers version their pricing as many ways as they want, because that’s part of the business model,” Conley said.
Chicago-based Mesirow Fiduciary Solutions adds flexPATH's plan-level outsourced fiduciary book, boosting its retirement market reach to $164 billion.
Also, Raymond James's employee advisor channel adds breakaways from Wells Fargo and Stifel, while UBS welcomes an ex-Morgan Stanley duo in Indiana.
It promised guaranteed principal and 10% monthly returns. The SEC says it invested nothing.
Ten years after entering the fee-based annuity market, MassMutual Ascend says nearly half its lifetime sales came in the past two years alone – but barriers remain among fee-only advisors.
Amplify, WealthReach, Zeplyn and Zocks have unveiled partnerships aimed at automating portfolio management, content creation, account opening, and client communication.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income