While people participating in these retirement plans can receive some help through the plan (online tools, target date and risk based portfolios, etc.), there is an enormous need for independent advisors to supplement or replace these tools. We generally see two scenarios:
There is an enormous opportunity for advisors that can develop new and deeper client relationships by managing employer sponsored retirement plan accounts. The “Redefining Defined Contribution” study by McKinsey & Company estimates that $3 trillion will flow out of defined contribution plans over the next decade. Advisors who plan ahead and develop relationships BEFORE the participant separates from service will have a huge advantage in capturing those assets.
That is the mission of Retirement Management Systems:
There are a number of reasons why advisors have not been able to manage client retirement plan accounts on their own. The most prominent is lack of resources and procedures. Two others relate to the custody rules and potential fiduciary liability. Retirement Management Systems offers solutions to these issues.
Retirement Management Systems provides all the tools you need to offer this much needed service to clients.
The fee may be set as a percent of assets under management or as a flat fee. In either event, the RMS retained portion remains as above.
We recommend Advisors set a fee schedule that fits with how they plan on using the Savings Plan Management service within their firms. Some Advisors want to earn a current fee on Savings plan management clients, while others are looking to grow their book of business – think client service versus client growth.
The agreement is available for completion in several formats – Paper, Online, and DocuSign. You will receive instruction on each once you are enrolled to offer Savings Plan Management.
Once you have a client active with RMS, you will be given login information and instructions. If you ever need a refresher or a login reset, please call (888) 870-7674.
Every quarter, based on the client’s start date (“Anniversary Date”), RMS either rebalances the existing model or reallocates the model based on decisions of our Investment Committee. The RMS Investment Committee meets quarterly to discuss the model allocations and make tactical asset class changes as valuations, momentum and economic conditions may warrant.
Each year, RMS sends a renewal notice to the client that contains an Investor Profile for them to complete. If the Investor Profile indicates a model other than the one they are currently invested in, RMS will send a notification to you (the advisor), asking for a confirmation that the client account should be rebalanced to the new model. If we do not hear from you, we will continue with the new model rebalance based on the new Investor Profile.
RMS collects the program fee from the client and remits any solicitor fees due to your parent Registered Investment Adviser firm. Timing is based on the timing of the payment received. So for example, if we receive a monthly payment from the client, you would see a solicitor fee the following month based on the monthly amount of payment.
RMS mails to clients a quarterly report that summarizes the market and economic conditions driving decisions in our portfolios. In addition, the report shows your name and firm contact information, along with a snapshot of the client’s account value, current investment model, and anniversary date.