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Pershing Launches Retirement Plan Network for BDs, RIAs

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Pershing announced Tuesday the launch of the Retirement Plan Network, a multifaceted offering that will “connect multiple constituencies” through the clearing and custody’s firm’s NetX360 technology platform to help broker-dealers and RIAs to grow, or begin, their defined contribution plan business.

Rob Cirrotti, head of retirement solutions at Pershing, had originally announced the Network’s advent during Pershing’s InSite conference last June, and is meant to leverage Pershing’s already significant presence as an IRA custodian into the defined contribution business.

In a Tuesday interview, he said the Network was “at the heart of our strategy to help our clients grow,” connecting those “multiple constituencies,” including advisors, broker-dealers, plan sponsors, participants, asset managers and third-party recordkeepers. The Network will give RIAs and broker-dealers the tools and resources to provide everything from creating proposals for plan sponsors to viewing plan investments, conducting investment reviews, facilitating IRA rollovers, selecting recordkeepers and accessing plan sponsor and participant education materials.

Other than the custody charge for each plan and charges for some premium tools around coaching and investment analytics, there will be no separate charges for the Network’s offerings, which will include “dynamic dashboarding.” 

Cirrotti said there are four main focuses of the initiative.

First is an expansion of Pershing’s network of recordkeepers to work with plan sponsors and advisors. At its launch, the Network includes six recordkeepers — Allen, Gibbs & Houlik L.C., Aspire Financial Service, Benefit Consultants Group, DailyAccess Corp., July Business Services and Sentinel Benefits & Financial Group — but Cirrotti said Pershing is “already in conversations with additional national and regional” recordkeepers to join the network.

The second focus is the of range tools accessible through the network — including those mentioned above along with practice management solutions to help advisors start and grow their DC businesses. Cirrotti also promised that “we’ll look at best-of-breed tools” to add to the network through 2015.

The third focus is to provide retirement plan participant data to advisors. While “not all advisors offer services to individual participants,” he said, “we want to help them know the participants in the plan, building a participant view for advisors, especially around the rollover” opportunity for those advisors.

The final focus is to provide the fiduciary services necessary in advising plans so “advisors can have a turnkey solution” that includes investment models and fund selection, in providing ERISA 3(21) and 3(38) services to plan sponsors. 

Cirrotti said Pershing will provide advisors with the “ability to expose” potential DC plan advising opportunities through NetX360 and then deliver services to take advantage of those opportunities “in an integrated manner,” including determining where the plan’s investments are and monitoring and reporting on those investments “through the life cycle of prospecting and serving” plan sponsors and participants. 

“The DC market continues to grow, fueling the rollover market” for both broker-dealers and RIAs, he said, who constitute “our greatest strength and areas of focus.”  From a broker-dealer’s perspective, the Network will also provide the “support structures” that will allow BD reps “to get into the business” and for the BDs themselves to “oversee the business with a greater level of oversight” while providing efficiencies through the use of a single platform. 

Noting that the “evolution of target-date funds is important and has simplified auto-enrollment,” those funds have also “stepped in front of advisors and their ability to customize.” Cirrotti said that “what’s starting to occur is that advisors are looking to bring more value to the process beyond packaged allocations.”  

So the Network will provide access through NetX360 to an integrated, open-architecture investment platform providing advisors with the ability to manage their own investment models or access third-party asset managers, which might be appealing to advisors new to the retirement plan space or to broker-dealers who wish to limit the options available to their reps. On the investment platform will be mutual funds, stable value funds and ETFs using managed models. 

When asked about the genesis of the offering, Cirrotti said it was “definitely driven by client interest,” including the growing trend of “advisor teams out of the wirehouses” who decided to go the independent route. In many of those teams, “there’d be one or two advisors specializing in retirement plans,” while regulatory pressure on BDs to “increase transparency and control over advisors” led them to seek Pershing’s help.

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