PCI Founder and Chairperson Reacts to Perception of Adviser Industry – An Open Letter

A recent headline caught my eye. Advisors Rank Almost as Low as Mechanics on Trustworthiness. This unfortunate fact was broadcast on WealthManagement.com in a May 7, 2020, article reporting the findings of a recent study conducted by the CFA Institute. I found it both sad and infuriating. Why? Because to me, it’s clear that the plan adviser industry and its big brother, the financial adviser industry, should be recognized as the true, helpful professions they are meant to be.

 

I put serious work into achieving the credentials required to be an adviser. I graduated from a public university in December of 1989 with a degree in Economics. It took me three and a half years. My grades were so-so. I got by without having to study much. After graduation, Investors Diversified Services (IDS) offered me an opportunity to become a financial planner, and I took it. Before I could “officially” join though (and get paid), I would have to pass the Series 7 exam. The Series 7 exam is the General Securities Representative Qualification Examination and is a requirement for brokers to solicit or sell securities to customers.

 

The Monday after graduation, I walked back to my old school’s library and sat down for eight-hour days – for the next three weeks. I had never studied so hard in my life and was grateful to pass the exam. Later, I went on to earn the Certified Financial Planner (CFP®) designation. It too required discipline and dedication, this time with long hours devoted over a period of years. Down the road, I hit the books again to earn the Qualified Pension Administrator (QPA) designation through the American Society of Pension Actuaries (now known as ASPPA). I believe I have earned the right to be recognized as a professional.

 

But the 3,525 retail investors and 921 institutional investors surveyed by the CFA Institute disagree, if not about advisers’ qualifications, then about how we use them. Of six professions listed, Financial Adviser ranked fourth, behind Doctor, Accountant, and Lawyer and ahead of Mechanic (barely) and Politician. Just twenty-three percent of respondents rated Financial Adviser high for trustworthiness. Thirty-two percent rated it low.

 

Culprit #1: Conflicts of Interest

The sad truth? If you are in my industry, you are probably not surprised. Actually, the more surprising thing to me isn’t that consumers have low trust in us, it is that those of us in this profession continue to go about our work as if everything is just fine. I’m saddened that thirty years on, my industry has continued to accept things as they have been, including bad practices.

To join the rank of other trusted professionals, the adviser industry must change in two major areas. First, we need to eliminate the incessant conflicts of interest.

 

How do we get better?

Our devotion must be singularly to our clients, not product suppliers. This means cutting out all sales commissions, up front and ongoing. We must refuse firms we recommend to our clients when they offer meals, paid due-diligence trips, and marketing assistance via reimbursements. We must demand that broker/dealers stop “pay-to-play.” These practices, both through perception and in reality, harm the trust and influence that we seek with our clients.

 

 

Culprit #2: Concealing Real Value Provided to Clients…AND PARTICIPANTS

Second, our industry must transparently and clearly report our value contribution. That is, the value we contribute directly to our clients. Most plan advisers and financial advisers build and monitor investment portfolios. Our industry reports performance. That isn’t what I mean.

 

How do we get better?

I mean, what value do you add through your advice or recommendation? Simply, what is the surplus of what your client earned with you, over what they could have earned without you. And we must measure against something objective, like an appropriately allocated index portfolio. When our advice costs our clients, we must admit it. That is transparent reporting.

 

The Change

People may say that it’s unrealistic or even impossible for an adviser to make these difficult but necessary changes. But it is possible. Let’s no longer tolerate the rampant conflicts of interests that have plagued our past. Let’s embrace transparency of our value contribution. Let’s make a trusted profession.

PCI’s Chris Thixton, QPA, C(K)P®, Gives Insight on Target Date Funds in InvestmentNews

PCI Principal Chris Thixton, QPA, C(k)P® was recently quoted in InvestmentNews. The article “Vanguard cements its hold on the target-date marketplace” discusses the trend toward lower costs in retirement plans.

 

Chris touches on two trends he sees around Target Date Funds within defined contribution plans: fees paid by plans and passive vs. actively managed funds. “Our research has shown that high costs don’t provide results.” But, he goes on to say, “fees without results are meaningless,” and adds, “We stay away from having cheap for the sake of showing cheap.”

 

Click here to read the full article in InvestmentNews and learn more about evaluating value vs. expenses when it comes to plan investment choices. 

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PCI’s Chris Thixton Talks Plan Fees During Covid-19 in InvestmentNews

PCI Principal, Chris Thixton QPA, C(k)P® recently spoke with InvestmentNews about the developing state of 401(k) plan fees. The article explores whether decreases in plan assets — from market action, COVID-19, and the CARES Act — will lead to increases in record keeping costs for participants.


The April 13, 2020 piece highlights the different fee arrangements plans may have linked to asset levels. According to InvestmentNews author, Emile Hallez, retirement plans are on track to lose a considerable amount of assets this year in light of Covid-19-related business interruptions, and with that, increased costs for participants.


Thixton states in the article, “There’s no standardization in this industry in terms of how fees are assessed.” He also reinforces that plans with a tiered fee schedule, which lowers record keeping costs across all assets when a certain level is reached, would be most affected by falling asset levels. However, “this kind of arrangement is less common today than it once was,” he noted.


He goes on to say, “We want fees to be low — not just reasonable…If we keep our fees low, every dollar we save is another dollar for retirement,” he said. “[But] this is in general not a time to go and renegotiate your fees.” His view? Plan fiduciaries need to be mindful of the fees being paid by their plan and ensure that their participants don’t suffer.


Could plans with an older asset-based tier fee arrangement lose discounts and see increase plan fees as they lose assets? Read Thixton’s insights in the full article: https://www.investmentnews.com/401k-assets-higher-fees-191438

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Chris Thixton, QPA, C(k)P® On the Road to Educate Fiduciaries about Offering a Rewarding Retirement

Chris Thixton, principal with Pension Consultants, Inc., is returning as Adjunct Lecturer for upcoming The Plan Sponsor University (TPSU) training programs. He will provide retirement plan fiduciaries with education about overseeing plans that prepare participants to retire on time with dignity. TPSU offers a comprehensive retirement plan certification program for business owners, benefits specialists, and employer fiduciaries.

 

Mr. Thixton, QPA, C(k)P®, will be lecturing on what it means for plan fiduciaries to offer a rewarding retirement for their participants, companies, and communities. In his session, he will walk through the honor and challenges fiduciaries face and offer insights to help you effectively manage and measure your plan. He will provide the tools to learn whether your participants are on track to retire on time with dignity, and what you can do to put them there.

 

In addition to the great learning experience, participants who attend these half-day training programs earn 5 hours of CPE with NASBA, and 5 hours SHRM and HRCI continuing education credits! There is no cost to attend.

 

Mr. Thixton will be lecturing at the following sessions in August-September 2020:

  • 8-27-2020 – University of Oklahoma, Norman, OK
  • 9-1-2020 – Indiana University – Purdue University Indianapolis, Indianapolis, IN
  • 9-2-2020 – University of Louisville, Louisville, KY
  • 9-15-2020 – Washington University, St. Louis, MO
 

If you are a retirement plan fiduciary in these areas, register for this great educational experience! You don’t want to miss this opportunity! 

 

We hope to see you in August and September! Visit The Plan Sponsor University’s registration website here: https://www.tpsuniversity.com/EVENTS/TPSUPrograms.aspx

 

 

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Dear Fiduciary, Why Fiduciary Focus Conference?

A Message from the Fiduciary Focus Team

2020 Fiduciary Focus Conference has been cancelled.

Thank you for your interest in Fiduciary Focus Conference. We made the difficult decision to cancel this year’s conference, but safety is our top priority. We sincerely apologize for any inconvenience this may cause you and appreciate your patience.

However, it’s not all bad news! We have CONFIRMED the dates for 2021 Fiduciary Focus Conference. Be sure to mark your calendars and save the date! The conference will be held on May 20-21, 2021 at the Chateau on the Lake in Branson, Missouri. We hope to see you there!

Our team is available any time to answer questions, comments, or concerns. Please visit www.fiduciaryfocusconference.org to reach us.

Fiduciary Focus Conference (previously Pension Focus) has been held annually in Branson, Missouri since 1996. It was created specifically to provide the specialized education fiduciaries need, not just to fulfill their obligations, but to achieve their maximum positive impact. Many attendees return year after year, having come to expect a quality event with timely information and good speakers. But, for those who haven’t attended before, I would like to share why Fiduciary Focus Conference is a good investment of time and money.

 

Fiduciaries Are Vital to Employees and Companies

We have all seen 401(k) and 403(b) plans become the primary retirement savings vehicle for most Americans. These plans are managed by a group of often unseen and unsung individuals, their fiduciary committee members. As a fiduciary, you are responsible for making the decisions that impact millions of peoples’ lives. If you do your job well, a good plan will contribute positively to the lives of employees, their families, and their community. A poorly managed plan will not. Whether a corporate retirement plan is good or not is a direct result of the skill of the fiduciary committee members.

For employees, a good plan will put them on a path to retire at their accustomed lifestyle at an expected retirement age. A rewarding retirement is the ultimate desire of most employees after a lifetime of work. However, retirement is not an employee’s only benefit from a good corporate retirement plan. During their accumulation years, the build-up of savings contributes significantly to their feeling of financial security.

Employers benefit from a good plan, too. As employees build financial security, they frequently become more productive at work. Financial stress is a leading cause of distraction at work. A study by the consulting firm Mercer pegged the cost of employee financial insecurity at $250 billion annually in terms of lost productivity. A good retirement plan can go a long way toward reversing that damage.

Additionally, employers benefit when workers are able to retire on time. As older employees leave the workforce, younger employees have more advancement opportunities. The employer will benefit as the younger worker is often lower on the pay scale. Also, with greater advancement opportunities, younger workers are more likely to stay with their employer. This can reduce turnover and save the employer more money.

 

Specialized Information from Experts

Fiduciary Focus Conference is specifically designed for fiduciary committee members. It is a time to receive training that can ultimately produce the desired results for your plan’s participants. Since all plan fiduciaries are responsible for duties at work aside from their plan committee duties, it is a unique time to focus on this important work.

Each year, the conference board and facilitators arrange for speakers and topics that are relevant and impactful. The conference is held over two days (from noon to noon) at the beautiful Chateau on the Lake, in Branson, Missouri. The environment is professional but relaxed.

One thing you won’t find at Fiduciary Focus Conference is exhibitors. In fact, the conference only has one sponsor, Pension Consultants, Inc. (PCI). PCI helped launch the conference in 1996 and has been sponsoring it each year since.

As a result of PCI’s approach to business integrity, no other money is solicited from plan service providers or investment companies. Therefore, you will not be encouraged to walk by booths or talk to sales people. In fact, speakers are not allowed to make pitches either.

It’s why so many people that attend Fiduciary Focus Conference return each year. I hope you will make plans to join us. I look forward to seeing you there.

Brian Allen, CFP®

 

Brian Allen is the Founder and Chairman of Pension Consultants Inc. (PCI), based in Springfield, Missouri. He has been advocating for transparency and results-based management for defined contribution plans since founding PCI in 1994.

2020 Fiduciary Focus Conference Registration Now Open!

A Message from the Fiduciary Focus Team

2020 Fiduciary Focus Conference has been cancelled.

Thank you for your interest in Fiduciary Focus Conference. We made the difficult decision to cancel this year’s conference, but safety is our top priority. We sincerely apologize for any inconvenience this may cause you and appreciate your patience.

However, it’s not all bad news! We have CONFIRMED the dates for 2021 Fiduciary Focus Conference. Be sure to mark your calendars and save the date! The conference will be held on May 20-21, 2021 at the Chateau on the Lake in Branson, Missouri. We hope to see you there!

Our team is available any time to answer questions, comments, or concerns. Please visit www.fiduciaryfocusconference.org to reach us.

We are excited to announce that registration is now OPEN for 2020 Fiduciary Focus Conference!

Every year, Pension Consultants, Inc. proudly sponsors Fiduciary Focus Conference, the premier educational experience for retirement plan fiduciaries. The conference has a longstanding reputation for providing attendees with insight and experience to use in their roles. This conference is designed for fiduciaries who want to succeed in their critical function by providing GOOD PLANS for their employees and companies.

What’s New at Fiduciary Focus Conference this year?

This year’s conference is focused on results, and how fiduciaries can discover new ways to oversee their plans to provide those results. This year will feature industry experts from all areas of retirement plans who work with fiduciaries every day. They’ll cover how your role as a fiduciary shapes your plan’s success, break down the different areas of plan performance, and explain how fiduciaries can gain confidence that the plans they oversee are ahead of the curve!

In addition to an outstanding schedule and presenter lineup, the conference has added new onsite features and a conference app. Conference attendee also have the opportunity to receive continuing education credits from 7 providers related to the fiduciary role. New in 2020, Fiduciary Focus Conference is a SHRM Recertification Provider!

Fiduciary Focus Conference is a can’t-miss experience for every retirement plan fiduciary. Now is the time to register! Register on or before April 10th, 2020 to get the early bird special. Bring your entire fiduciary committee. Book together to receive a great group discount. Conference agenda and speakers will be announced soon. Don’t miss out – save your seat below.

If you would like to learn more about Fiduciary Focus Conference, visit www.fiduciaryfocusconference.org!

Join us there: May 7-8, 2020, at Chateau on the Lake, in Branson, MO!

 

Pension Consultants Inc. and Founder Brian Allen Recognized in InvestmentNews Outside-IN

Brian Allen, Founder and Chairman of Pension Consultants, Inc. (PCI), was recently featured in the InvestmentNews blog Outside-IN article, “The danger of focusing on retirement plan participant outcomes.”

 

The article highlights PCI’s innovative philosophy and fee structure as antidotes to an industry that has been slow to change the way it does business. Brian explains PCI’s focus on results and transparency, and the company’s total commitment to measurable success for plans and participants.

 

Click to read the full article in InvestmentNews and learn more about strategies designed to help plan sponsors improve retirement for their participants.

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Pension Consultants, Inc. wins 401kTV Genie Award for Investment Design

December 5, 2019 – Pension Consultants, Inc. (PCI) won the 2019 DC Genie Award for Investment Design of retirement plans. The recognition from 401kTV came for PCI’s innovative method of tracking and reporting plan performance with true transparency and accountability.

The Award applauds PCI’s work to capture full investment results, not just performance of individual funds, and to compare results to a rigorous objective performance standard. Fred Barstein – Founder and CEO of The Retirement Advisor University, The Plan Sponsor University, and 401kTV – put it this way, “PCI is the only one showing what’s really happening for plans and participants. Their reporting is a bold and important move, and really brings transparency to the world of retirement plans.”   

PCI Principal, Chris Thixton, QPA, C(k)P®, (pictured center below) attended the Chicago award ceremony, and accepted the honor on the team’s behalf. Chris is an adjunct lecturer with The Plan Sponsor University, and is dedicated to showing fiduciaries how they can achieve results that truly work in the best interest of participants. 

PCI’s revolutionary approach starts with being a fee-only adviser, and continues with showing objective performance standards and transparent reporting for all aspects of the plan – investments, fees, and participants’ readiness to retire. This openness culminates in a direct link between plan results and PCI’s fees, a practice nearly unheard of in the plan adviser industry.

Thank you to 401(k) TV for their recognition. At PCI, we will continue working toward our purpose: to improve the financial security of America workers.

You can view the Awards highlight reel and winners of the DC Genie Awards on 401(k) TV’s website HERE.

About 401(k) TV and the Genie Award

401kTV is a leading resource for financial professionals responsible for creating and maintaining retirement benefit programs for their company employees. It is written by leading experts and contributors that are focused on the areas of: plan creation and optimization, compliance, and collaborative resources.

The 401kTV Genie Award recognizes implemented innovation that has improved retirement outcomes with a focus on creative use of technology. The Genie recognizes innovation in five areas: Plan Design, Investment Design, Employee Communication, Employee Education and Advice, and Technology. Nominations are made by companies and individuals across the retirement plan industry, including plan sponsors and advisers.

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Pension Consultants Named on Financial Advisor Magazine’s Annual RIA Ranking

Pension Consultants, Inc. (PCI), a leader in performance-driven retirement plan management, is excited to announce that the firm has been named in Financial Advisor (FA) Magazine’s 2019 RIA (Registered Investment Advisor) ranking for the second year!

PCI’s commitment to performance-driven plan management with transparent accountability allows us to provide confidence to fiduciary committees that the plan they manage is a Good one. When a fiduciary committee offers a Good Plan to their workforce, it is proven to dramatically improve their workforce’s financial security. We believe that the definition of a Good Plan is simple – A Good Plan is one that has three qualities:

  • The plan’s investment lineup performs well,
  • The fees paid by the plan are low, and
  • Employees are on track to retire.

PCI’s revolutionary approach to plan management aligns our interests with the fiduciary committee – to provide a Good Plan, by making our fees dependent on the performance we provide our client’s plans. Using objective performance standards – uncommon in the plan advisor industry- fiduciary committees never have to question if their plan is good, they’ll always know.

The list can be found on their website HERE. To view a copy of the official 2019 RIA Ranking, click HERE.

Financial Advisor Magazine

Financial Advisor, via the Investment Adviser Association, reports that RIAs managed more than $82.5 Trillion in assets in 2018*. The assets managed by RIAs like PCI represent the hard-earned retirement savings of American workers who rely on advisers to help secure and grow their savings in preparation for future retirement. These workers, and the companies that employ them, deserve to be served by an advisory firm that provides true outcome-driven value and keeps the participants’ best interest at the forefront of every decision.

Financial Advisor magazine is a top-ranked publication targeting professional financial advisers. Financial Advisor’s annual ranking article and list are based on an annual RIA Survey.

The list can be found on their website HERE. To view a copy of the official 2019 RIA Ranking, click HERE

Source: Rasmussen, Eric. “RIA Survey & Ranking 2019.” Press Release article. www.fa-mag.com. 18 July 2019. https://www.fa-mag.com/news/ria-survey—ranking-2019-45701.html?section=133.

*(research survey for numbers) https://higherlogicdownload.s3.amazonaws.com/INVESTMENTADVISER/aa03843e-7981-46b2-aa49-c572f2ddb7e8/UploadedImages/resources/Evolution_Revolution_2018_v7.pdf

Disclosure: To be considered for Financial Advisor’s Registered Investment Advisor (RIA) ranking, Pension Consultants, Inc. submitted a survey application form to Financial Advisors. The list includes registered investment advisory teams with a significant amount of assets under management (AUM), as of 12/31/2018. The complete list can be found here:  (ranking list) https://www.fa-mag.com/userfiles/0000002019_IMAGES_ALL/FA_ISSUES_2019/07_FA_JULY_2019/RIA_Ranking_Online_2019v5.pdf

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PCI’s Executive Director Recently Featured on 401(k) TV for “Bold Decision” Performance-Driven Fee Structure

May 15th, 2019 – Mr. Cody Mendenhall, CFP®, Executive Director with Pension Consultants, Inc. (PCI), was featured on 401(k) TV, an affiliate with The Plan Sponsor University (TPSU) and The Retirement Advisor University (TRAU), discussing PCI’s “bold decision” to adopt a performance-based asset management fee structure.

Mr. Fred Barstein, Founder and Executive Director of 401(K) TV, sat down with Mr. Mendenhall at recent TPSU educational event to discuss PCI’s decision to start offering a performance-based asset management fee schedule. Mr. Mendenhall led us through the evolution of PCI’s fee structure over the last 25 years, and the decision to lead the plan adviser industry to a performance-based fee structure.

To put it simply, PCI wants to utilize a performance-driven plan management structure that will make a difference in the financial security of American workers. This means that a significant portion of the fees that PCI receives will be based on how we perform for our clients!

PCI is committed to providing our clients with a plan that performs well with transparent accountability. Let Mr. Mendenhall tell you more about how we do it in his featured video HERE. 

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