The 20 Rising Stars of Retirement Plan Advisory 2008

Total compensation for generalists who don't manage other professionals ranges from $100,000 to $300,000, with bonus making up about half, according to McCabe. At this level, CFA-qualified investment specialists tend to make more than generalists $200,000 and up. Group leaders, who may oversee the efforts of 10-20 relationship managers, command $200,000 to $400,000. At the most senior level, the head of relationship management at a major recordkeeping firm like Fidelity or Prudential will earn from $500,000 to well over $1 million. Most people advance to a relationship manager role after learning the ropes working for a recordkeeper in either operations or implementation and conversion (the department that creates the initial set-up for a new retirement plan). New Opportunities Among Participants The glacial shift from defined benefit to defined contribution Davis, who entered the business nine years ago, said if he were starting out today his first priority would be to earn a Certified Financial Planner (CFP) certification – whose content centers on financial services for individuals – rather than an institutionally focused designation. He also believes the entire financial services industry is closing its eyes to a promising market: individual accounts smaller than $500,000. "For somebody who can really figure out a way to add value and help the lower-paid participants, there's room to run forever in that space,” Davis said. “There's so many of them, and nobody is fighting for it. An advisor who figures out how to build their business around accounts with $100,000 to $200,000 balances is going to have a great career.” While advisors build connections with plan participants, they also must upgrade skills in order to meet the expanding needs of many of them, and nobody is fighting for An “There's sohow to build their business around accountsit.withadvisor who figures out $100,000 to $200,000 balances is going to have a great career.” — Mark Davis plans that propelled the business of advisors through the 1980s and 1990s has finally run its course. Now, however, practitioners point to a new incipient shift that promises to be equally momentous: a move toward advising individual plan beneficiaries how to invest their funds, both during and beyond their years as active employees. "That's where the opportunity is going to be 10-20 years out even five years out," observed Mark Davis, a partner at Louis Kravitz & Associates, a retirement plan consulting firm headquartered in Encino, Calif. Until recently, plan sponsors and providers alike shied away from providing investment advice to employees in 401(k) plans due to potential liability issues. The Pension Protection Act largely removed those concerns, opening the door for advisors to deliver a broad new class of service. The legislation also allows employers to automatically enroll all new hires in a defined contribution plan, unless the employee specifically opts out. As a result, the proportion of eligible workers who participate in 401(k) and hybrid plans is expected to shoot up from about 60% to nearly 90% within several years. The timing couldn't be better: 80 million Baby Boomers will reach retirement age in the next 18 years. And the bulk of those coming retirees are in desperate need of investment advice that can continue after they've stopped working and need to turn their 401(k) nest egg into a secure income stream. “For most individuals, a 401(k) is the biggest investment they've got short of their house,” McCabe noted. “To go after that huge mass-affluent market, the best relationship you can have is to go in through the 401(k) plan and try to hold onto it." SEPTEMBER 2008 plan sponsors. Sponsors are increasingly demanding expertise in newer, more complex plan types – especially ‘hybrid’ plans. Formerly known as cash-balance plans, they came into wide use during the 1990s but eventually became a target of protests and lawsuits that alleged the plans discriminated against older employees. The Pension Protection Act officially sanctioned such plans, removing the risk of discrimination lawsuits, and gave them a new, sanitized name. "The advisors who are getting the business are those that bring more than just the investment component," said David Wray, president of the Profit Sharing/401k Council of America. "They also understand the dynamics of a 401k plan overall and can provide other kinds of assistance in looking at the plan." eFinancialCareers, a Dice Holdings company, is the leading global career site network for professionals working in the investment banking, asset management and securities industries. The website provides financial services professionals with job opportunities, job market news and analysis, salary surveys and career advice. Recruiters and employers can post jobs targeting specific sectors within the financial services industry, both buy-side and sell-side, and can search the resume database for highly qualified and specialized professionals. eFinancialCareers has a network of cobranded career sites with leading trade publications and offers local websites in 15 markets and five languages across North America, Europe, the Middle East and Asia-Pacific. For more information, visit www.eFinancialCareers.com. RETIREMENT PLAN ADVISORY RISING STARS 11 http://www.eFinancialCareers.com http://www.eFinancialCareers.com

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The 20 Rising Stars of Retirement Plan Advisory 2008 Contents Doing Well By Doing Good The Post-PPA Bounce Automatic Enrollment vs. Managed Account Unfair Advantage? You Bet The New World Order 20 Rising Stars of Retirement Plan Advisory Mentors’ Page

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