John Hancock Financial Network already serves 2,000 financial advisers and independent broker-dealers who do business with 401(k) plans across the United States, to date, John Hancock's 401(k) support has been limited to access to asset managers. Further, John Hancock never branded its name on its defined contribution platform, instead allowing advisers to use their own.
John Hancock Financial Network now wants to change all that. In fact, the firm wants the retirement plan advisers it supports to think of its name as synonymous with 401(k) offerings.
The firm has created a broad 401(k) adviser platform, called the John Hancock Financial Network Defined Contribution Consulting Program, that it hopes will appeal to a wide spectrum of advisers and help them build out their "several billion" in 401(k) assets under management custodied with John Hancock to significantly more.
"We want to become one of the premier destinations for retirement plan-focused advisers," said Bruce Harrington, head of retirement sales and strategy for John Hancock Financial Network. "We anticipate double-digit growth in assets under management."
Harrington, who joined John Hancock a year ago to develop its defined contribution custodial business, is a well-known 401(k) veteran who held senior DC roles at MFS Investment Management, Putnam Investments and LPL Financial. Harrington is supported by two dedicated, "product agnostic" defined contribution sales consultants, a new position at the firm. This team provides advisers with prospecting ideas, case consultation and information on industry best practices.
In addition, Harrington noted, Peter Gordon, the president of John Hancock Financial Network, has a background and commitment to 401(k) sales. Prior to taking on his current role in 2006, Gordon was senior vice president of sales and marketing for John Hancock Retirement Plan Services, John Hancock's own retirement plan product and services offering, geared for small and mid-sized businesses.
John Hancock Financial believes its enhanced 401(k) platform is unique in that it is tailored for advisers with varying levels of expertise and commitment to the 401(k) market and that it is based on recent, in-depth research on the expectations and needs of 401(k) advisers, Harrington said.
The biggest differential of John Hancock's new 401(k) adviser platform, Harrington said, is the training that John Hancock now offers, both in person and online, for those advisers who do only a small percentage of their work in the DC space, those at the mid-tier level who do 25% of their business in DC plans, and those who offer comprehensive DC work and need to qualify as fiduciaries.
In April, for instance, John Hancock held a "401(k) Boot Camp" in Boston that 30 advisers attended. Aimed at those advisers who do only occasional 401(k) work, the seminar covered regulatory issues, practice management guidance and information on John Hancock's Accredited Investment Fiduciary (AIF) program. John Hancock plans to hold a second 401(k) seminar for 401(k) advisers at the mid-tier level in September, again in Boston.
For those advisers with more 401(k) experience, John Hancock offered a more comprehensive, in-depth seminar in mid June in Chicago, which 75 advisers attended.
In addition to these in-person seminars, John Hancock offers a series of online modules and tools based on materials from Retirement Plan Advisory Group (RPAG), a defined contribution consultancy that educates advisers on 401(k) requests for proposals, benchmarking, due diligence scorecards, best practices, marketing and fund selection.
John Hancock will continue to promote these seminars and online tools through webinars, conference calls and e-mail marketing efforts.
"Our 401(k) platform is now a complete, top-down strategy," Harrington said. "It's like going from offering instant coffee to having a full array of choices at Starbucks. I am thrilled with the tremendous feedback we have received from our seminars already. Advisers are telling us they like the content, the ability to network with their peers and to learn more."
"Our new defined contribution consulting program is a great example of how John Hancock Financial Network strives to serve its clients by providing the best tools and resources to its financial advisers," added Chris Maryanopolis, president of Signator Investors, the broker-dealer arm of John Hancock Financial Network. "Our experts carefully developed this program to assist JHFN's diverse group of financial advisers so that they can continue to service the retirement plan market and help clients select retirement plan options that fit their needs."
So what research did John Hancock undertake to develop its new 401(k) advisor platform?
In the first quarter of 2011, John Hancock commissioned Pulse Logic to survey 220 retirement plan advisers on their perceptions of the industry, upcoming regulatory changes, resources they find helpful and the future of the business.
The biggest finding of the survey was how critical training and fiduciary accreditation have become. Eighty-five percent of retirement plan advisers are currently performing fiduciary services, even though most are not officially declared plan fiduciaries. In fact, only 34% of respondents held the AIF designation, John Hancock found.
With plan sponsors increasingly exerting pressure on retirement plan advisers to bear at least some of their fiduciary responsibility, training and AIF accreditation will be in even higher demand, John Hancock believes.
Certainly, when asked what they expect from their broker-dealer, the number one citing of retirement advisers was fiduciary guidance (82%), followed by competitive information (76%) and regulatory updates (75%).
With the current regulatory environment becoming increasingly complex, Harrington said, it will be critical for advisers to be fully up-to-speed in order to best serve their clients and grow their businesses.
Advisers who take advantage of educational opportunities and resources and become experts will be in a solid position to demonstrate their value to plan sponsors, he said.
And with the Department of Labor requiring plans to clearly disclose 401(k) fees to investors beginning April 30, 2012, 86% of the plan design/ERISA experts who responded to the survey said the new fee disclosure regulation is an opportunity for future business growth.
The legislation is driving more advisers to move from commission to fee-based business; 31% of the advisers' business is currently fee-based, but they expect that to double to 60% in the future.
"The anticipated increase in fee-based business is also understandable, given the impending regulatory changes, increased complexities and pressures from plan sponsors," Harrington said. "A shift in that direction will also require additional support from a broker-dealer."
The survey also asked 401(k) advisers what they expect from mutual fund product providers. Topping the list was high-quality personnel (80%), followed by a strong brand (76%), competitive products (70%), readily available sales support (69%), investment in technology and the business (66%) and an established client service program with results (66%).
John Hancock Financial Network serves 2,000 financial advisers and independent broker-dealers who do business with 401(k) plans across the United States.
But to date, the only support those advisers have gotten has been access to asset managers. Further, John Hancock has never put its brand on this program, instead allowing advisers to use their own.
John Hancock Financial Network now wants to change all that. In fact, the firm wants the retirement plan advisers it supports to think of its name as synonymous with 401(k) offerings.
The firm has created a broad 401(k) adviser program called the John Hancock Financial Network Defined Contribution Consulting Program, that it hopes will appeal to a wide spectrum of advisers and help them build out their "several billion" in 401(k) assets under management custodied with John Hancock to significantly more.
"We want to become one of the premier destinations for retirement plan-focused advisers," said Bruce Harrington, head of retirement sales and strategy for John Hancock Financial Network. "We anticipate double-digit growth in assets under management."
Harrington, who joined John Hancock a year ago to develop its defined contribution custodial business, is a well-known 401(k) veteran who held senior DC roles at MFS Investment Management, Putnam Investments and LPL Financial. Harrington is supported by two dedicated, "product agnostic" defined contribution sales consultants, a new position at the firm. This team provides advisers with prospecting ideas, case consultation and information on industry best practices.
In addition, Harrington noted, Peter Gordon, the president of John Hancock Financial Network, has a background and commitment to 401(k) sales. Prior to taking on his current role in 2006, Gordon was senior vice president of sales and marketing for John Hancock Retirement Plan Services, John Hancock's own retirement plan product and services offering, geared for small and mid-sized businesses.
John Hancock Financial believes its enhanced 401(k) platform is unique in that it is tailored for advisers with varying levels of expertise and commitment to the 401(k) market and that it is based on recent, in-depth research on the expectations and needs of 401(k) advisers, Harrington said.
The biggest differential of John Hancock's new 401(k) adviser program, Harrington said, is the training that John Hancock now offers, both in person and online, for those advisers who do only a small percentage of their work in the DC space, those at the mid-tier level who do 25% of their business in DC plans, and those who offer comprehensive DC work and need to qualify as fiduciaries.
In April, for instance, John Hancock held a "401(k) Boot Camp" in Boston that 30 advisers attended. Aimed at those advisers who do only occasional 401(k) work, the seminar covered regulatory issues, practice management guidance and information on John Hancock's Accredited Investment Fiduciary (AIF) program. John Hancock plans to hold a second 401(k) seminar for 401(k) advisers at the mid-tier level in September, again in Boston.
For those advisers with more 401(k) experience, John Hancock offered a more comprehensive, in-depth seminar in mid June in Chicago, which 75 advisers attended.
In addition to these in-person seminars, John Hancock offers a series of online modules and tools based on materials from Retirement Plan Advisory Group (RPAG), a defined contribution consultancy that educates advisers on 401(k) requests for proposals, benchmarking, due diligence scorecards, best practices, marketing and fund selection.
John Hancock will continue to promote these seminars and online tools through webinars, conference calls and e-mail marketing efforts.
"Our 401(k) platform is now a complete, top-down strategy," Harrington said. "It's like going from offering instant coffee to having a full array of choices at Starbucks. I am thrilled with the tremendous feedback we have received from our seminars already. Advisers are telling us they like the content, the ability to network with their peers and to learn more."
"Our new defined contribution consulting program is a great example of how John Hancock Financial Network strives to serve its clients by providing the best tools and resources to its financial advisers," added Chris Maryanopolis, president of Signator Investors, the broker-dealer arm of John Hancock Financial Network. "Our experts carefully developed this program to assist JHFN's diverse group of financial advisers so that they can continue to service the retirement plan market and help clients select retirement plan options that fit their needs."
So what research did John Hancock undertake to develop its new 401(k) advisor program?
In the first quarter of 2011, John Hancock commissioned Pulse Logic to survey 220 retirement plan advisers on their perceptions of the industry, upcoming regulatory changes, resources they find helpful and the future of the business.
The biggest finding of the survey was how critical training and fiduciary accreditation have become. Eighty-five percent of retirement plan advisers are currently performing fiduciary services, even though most are not officially declared plan fiduciaries. In fact, only 34% of respondents held the AIF designation, John Hancock found.
With plan sponsors increasingly exerting pressure on retirement plan advisers to bear at least some of their fiduciary responsibility, training and AIF accreditation will be in even higher demand, John Hancock believes. Certainly, when asked what they expect from their broker-dealer, the number one citing of retirement advisers was fiduciary guidance (82%), followed by competitive information (76%) and regulatory updates (75%).
With the current regulatory environment becoming increasingly complex, Harrington said, it will be critical for advisers to be fully up-to-speed in order to best serve their clients and grow their businesses. And with the Department of Labor requiring plans to clearly disclose 401(k) fees to investors beginning April 30, 2012, 86% of the plan design/ERISA experts who responded to the survey said the new fee disclosure regulation is an opportunity for future business growth.
The survey also asked 401(k) advisers what they expect from mutual fund product providers. Topping the list was high-quality personnel (80%), followed by a strong brand (76%), competitive products (70%), readily available sales support (69%), investment in technology (66%) and client service (66%). MME
