PANC 2015: Adding Wealth Management to Your Practice

Asked whether advisers still look to add wealth
management and rollover business to their practice, in light of the proposed
fiduciary rule, David Kaleda, principal at Groom Law Group, said, “For plan
advisers moving into wealth management, that’s always been a tricky area. Under
the proposal, it will become even trickier because it broadens the definition
of those who are fiduciaries and includes rollovers.” Kaleda was speaking at
the 2015 PLANADVISER National Conference in Orlando, Florida, on the panel “Practical
and Legal Tips for Adding Wealth Management and Rollover Solutions to Your

“Under current law, there are exemptions that do allow you
to be paid, but they aren’t suited for rollovers,” Kaleda said. The new
proposal allows for a best interest contract exemption (BIC), but as it is now
structured, “almost no one can comply with it. This will certainly change in
the next six months to a year.”

As for cross-selling to participants, “Everyone is looking for a way to
monetize their relationship with participants through an IRA [individual
retirement account], and, due to the sheer number of Baby Boomers retiring over
the coming years, it is certainly going to happen,” said George Revoir, senior
vice president, distribution, at John Hancock Financial Services. “You can make
it an easier conversation, depending on how you look at it. John Hancock’s
retirement plans allow only for lump-sum distributions, so it is not hard to have
a conversation about an income option in an IRA rollover.”

The other option is for an adviser to suggest including lifetime income options
in a plan to keep retired participants invested, Kaleda said.

In the years
ahead, this is an option that advisers will need to consider, particularly for
large plans, Revoir observed.

NEXT: The appeal of
wealth management


Tuesday, September 29th, 2015 EN

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