The Big Will Get Bigger… the Fiduciary FA and How to Sustain Growth

The Big Will Get Bigger… the Fiduciary FA and How to Sustain Growth

If one is different, one is bound to be lonely.

-From Brave New World by Aldous Huxley, 1932.

Since April when the Fed announced the new Fiduciary Ruling, we, at TAG Resources, are taking on many blocks of business for advisory firms and BD firms that are jettisoning their smaller plans (and those plans that are serviced by a non-retirement focused producer). The trend out there, at least on the micro/small plan side, is to migrate the plans to a product offering that has the fiduciary roles addressed so as to make the April 2017 change an easy transition.

Internally, we’re seeing advisors that ‘dabble’ in retirement plans being forced to “partner up” with fiduciary focused advisors, as well. In this Brave New World, the big advisors will get bigger. At face value, this is a great opportunity— and I want to talk about how to make sure that it is just that.

Let’s touch on three types of advisors in this space:

  1. First is the ‘Dabbler”, the financial planner/ wealth manager: Most often, these guys write plans because their clientele owns businesses. They may write a lot of plans over time, but it is never more than an ancillary practice.
  2. The second is the ‘Big Idea’ crowd: I like these guys best. These are the advisors that drive a lot of business. They are natural marketers, and they really push service providers. They’ve had success, and they leverage their relationships to get things done.
  3. The third crowd are the ‘Big Timers’: There are not as many of these, and most are tied to the larger wirehouses or firms. They are the subject matter experts that other advisors latch onto to close deals. These guys don’t prospect, have a solid Rolodex of industry relationships and are pretty good at what they do.

So how does TAG help all three of these FA types?

Dabblers need a product offering that is turn-key. They need to have full fiduciary outsourcing gift-wrapped and delivered for their clients; anything short of this, they need to either get out of the business entirely or get really cozy with their E&O carrier. Shockingly, I have a bias towards a model like TAG’s for this crowd— as these guys don’t have the time or the background to discern who/what makes a good fiduciary partner for their client plans from all the noise out there. TAG Resources delivers for this group as a full fiduciary partner offering 3(16) and 3(38) services.

The second group, the ‘Big Idea’ crowd, has the greatest opportunity, in my eyes. As they are always honing their practice and looking for that edge— that edge has arrived. To really gain market share, they need to embrace the bigger view of themselves— and that means thinking like this: “I have 100 plans today, what will my practice look like with 200 plans? What staff needs will I have? What is it that I offer that will make this growth happen? What can I outsource so that I can get there faster and more efficiently?” The Big Idea advisors need to embrace third party fiduciary outsourcing fully. While there is a growing camp of advisors that are taking on 3(21) or 3(38) roles to define their value further — that is going to slow their growth, in my opinion. To borrow from United Way’s slogan, the ‘best way to help the most people’ has got to include outsourcing. Decide what you’re good at doing, and set out to be great at that; outsource the rest. Find, and partner with, firms that are experts in specific fiduciary roles— 3(16) and 3(38) partners; this will make it far easier for you to manage (and meet) client expectations and grow your practice. TAG Resources is an ideal outsourcing partner for the ‘Big Idea’ crowd to grow their practice and meet client expectations.

The third group, the ‘Big Timers’, are going to be tapped for time as they will be directing far more traffic than only the large plans they tend to favor. Firms are going to lean on these advisors to steer micro/small plans to solutions for their non-fiduciary advisors; as with the Big Idea guys, this is the time to embrace fiduciary outsourcing to prevent being overrun. For the ‘Big Timers’, TAG Resources takes on the responsibility of being the retirement plan department’s back office by meeting client expectations through integration with major recordkeepers.

For more information on how TAG Resources can help you grow your business in the face of the changes due to the fiduciary ruling, please contact us by email or give us a call.

If you’re prepared to do these things, you can sweep up a lot of business, but you’ve got to be prepared to be different. And, if Aldous Huxley is correct, you’ve got to be lonely. Stay lonely, my friends, stay lonely.

-From Troy Tisue, 2016.


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