Carlsbad, Calif.-based GRP Advisor Alliance has built its business on helping financial advisers offer value-added options to their 401(k) plan clients. These options include access to collective investment trusts and financial wellness programs.
GRP pools the collective resources of all of its adviser members to offer benefits that were once only accessible to plans with more than 10,000 employees in the past. GRP, which was founded in January 2015 and employs 22 people, started out representing adviser clients with $18 billion in assets under advisement. This July, its adviser clients represented $184 billion in plan assets.
GRP signed a distribution agreement with Financial Finesse, a fiscal wellness solution provider that offers programs to Fortune 1000 companies, to offer Financial Finesse’s programs to much smaller defined contribution plans.
“We have a lot of opportunity to drive wellness,” says Christopher Giles, senior managing partner at GRP. “We see significantly more clients than [Financial Finesse’s] machine can handle. That is part of why [they] partnered with us.”
He points out that Financial Finesse CEO Liz Davidson believes that everybody should have access to a financial wellness program but she knows her company is not equipped to work with 5,000 plans.
“We have the ability to distribute to smaller plans than she would generally work with,” says Giles.
It can cost upward of $50,000 to offer Financial Finesse’s financial wellness programs, which is too expensive for a small plan. By going through GRP Advisor Alliance, Financial Finesse can price its product significantly lower than that.
One of the areas in which GRP saves money is in its ability to communicate with clients. The company invested in a marketing automation system that helps its adviser clients to communicate all aspects of the financial wellness plan to their plan participants in a timely manner.
Small companies don’t usually have large marketing departments that can spend time crafting communications to promote their financial wellness programming. As part of Financial Finesse’s program, plan participants are peppered with new information every week for four weeks and then once a month thereafter. With GRP’s automated system, the different informational pieces can be branded to a specific company and then sent out automatically on a schedule so the plan sponsor doesn’t have to think about it once they sign up for the program.
“We’ve seen remarkable differences in utilization when we run the campaign,” Giles says. “Not that our campaign is any better. It uses the same collateral, the same materials, but it happens with regularity.”
The emails are sent out from someone of importance in the plan sponsor’s company, like the CEO, so that people will be more likely to open and read the email. Each email covers a different topic, such as protecting against identity theft, managing credit or understanding retirement needs.
“We leverage technology to deliver that at scale. What that does is offload work from the plan sponsor and adviser and ensures it actually happens,” Giles says. “We’re not a huge company. I think of myself as senior managing partner and janitor. That’s the way a lot of small companies operate.”
Partnering with GRP Advisor Alliance “fits in with what we’re trying to accomplish, getting financial wellness information out to the most people possible,” says Daniel Starobin, director of client programs for Financial Finesse.
“They have a large financial adviser retirement community they work through, which is not an area where we work with them. It is not our core. We have different competencies so we are able to complement each other,” Starobin says.
GRP Advisor Alliance pays a lower negotiated rate to Financial Finesse for every adviser or plan that signs on to the program. Where they can save money is that large plans always want the financial wellness platform to be branded to their company specifically, whereas the program offered by GRP has a standard look and feel. Smaller companies don’t have the same customization needs so GRP can keep the standard look and feel through its adviser channel so it is easier to present to plan sponsors and “gives us the ability to bulk price it,” Starobin says.
Advisers and their 401(k) plan clients also get access to Financial Finesse’s online platform, with all of its resources, and are able to speak to one of Financial Finesse’s certified financial planners through the company’s help line.
“Financial wellness is becoming a very common concern in the HR area. It used to be only larger companies, but now medium and smaller companies are wondering how to bring it to their employees. Adviser distribution channels make sense,” Starobin says.
Financial Finesse is impressed with GRP’s automation marketing success. “We’ve done some experimentation with [automation] in the past but we didn’t have the success,” Starobin says. “It is a different animal at the larger size.”
He adds that GRP’s automated marketing tool has been “phenomenal. We couldn’t have estimated that amount of increased utilization from that.”
Giles says that the number of plan participants registering to use the financial wellness program doubled since the company implemented its automated marketing system two months ago. Before the system was launched, 30% of participants got online to complete a financial wellness assessment. After, 67% completed a financial wellness assessment.
He calls these early results, as only 13 plan sponsors are using the program to-date.
“It is growing and growing quickly for us,” Giles says.
GRP also offers its adviser clients access to Collective Investment Trusts or CITs. These vehicles are similar to mutual funds. The difference is that a CIT is a collection of investments that is only available to one company or retirement plan. CITs require a lot of money to get started but because of a plan’s size, it is easier for a plan sponsor to negotiate lower fees on the investments.
GRP pools the books of business of all of its 220 retirement advisers to develop its own CITs, which are then accessible to its adviser clients and their retirement plan clients. This allows smaller retirement plans to have access to these types of investments at a lower negotiated fee, saving plan participants money in the long run.
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