Recordkeepers take on adviser duties as plan roles blur

Recordkeepers are taking on plan-design and participant-guidance work that advisers once handled alone, and the two sides are still working out where the adviser role ends, a panel at the PLANADVISER 360 Conference said Monday.

Alexandria Francis, vice president and adviser consultant at Fidelity Investments, said recordkeepers are taking on some adviser functions. "We're seeing this shift where the recordkeeper wants to be on the same side of the table [as advisers], and we're still trying to figure out how to do it," she said.

Leah Sylvester, executive partner and president of retirement plans at Shepherd Financial Inc., said an adviser must establish which of a plan's recordkeepers can actually administer a feature before promising it. She cited in-plan Roth transfers as an example of a service that is not universal across recordkeepers.

Sylvester said her firm works with more than 27 recordkeepers, which complicates administering complex plan design or overseeing participant decisions. "We need to understand, within those 27 recordkeepers, who can actually administer that type of transaction?" she said. More uniform offerings would help advisers, she said.

Phil Sherman, founder and lead adviser at FoxHedge Advisors LLC, said the confusion is over ownership as much as capability. "If we want to bring a cool idea to the table, at what point do we hand off responsibility [to the recordkeeper]?" he said.

Francis said Fidelity has spent the past several years building reporting that shows advisers their book of business. "We offer a platform where you can run reports as needed, if you want to know who's terminated [or] who needs a beneficiary," she said. Advisers can pull that information without contacting anyone at the firm, she said, and Fidelity uses its adviser summit to hear what else they need.