Actively managed model portfolios are becoming increasingly prominent across the retirement industry. There has been a major shift away from the antiquated approach of managing portfolios via recordkeeping systems, towards a modeling system where portfolios can be unitized at a global level and synchronized across plans, reducing the time and hassle of distributing model portfolios to plan participants.
Mid Atlantic Capital Group designed ModelxChange®, an actively managed model portfolio platform, to benefit plan participants by allowing advisors to efficiently integrate ETF and mutual fund investment strategies into 401(k) plans. We were among the first to provide this technology over a decade ago, which was a unique option compared to the primarily retail-oriented models offered at the time. As the retirement industry began to see increased demand for active management, our model platform continues to be a leader in this space.
Model portfolio trends in the industry today
As the demand and usage of models becomes more widely used, we see three key trends driving the retirement plan industry today:
- Efficiency is key. Retirement plan advisors are constantly looking for more efficient ways to manage plans, investment menus and offerings for their participants. Investors are also looking for a more efficient path toward retirement, calling for a “work smarter, not harder” mindset. The Mid Atlantic platform is a one-stop shop where managers and advisors can run different rebalances, manage allocation changes and fund swaps at a global level and see a trickle-down effect across the entire platform for their plans and participants. ModelxChange is a great way for advisors to internally run their own models, if desired, or use the third-party management features to free up more time to advance their business and relationships with current and future clients. This flexibility has also been increasingly important throughout the pandemic, as the retirement industry took a major hit and participants needed the extra one-on-one time with their advisors.
- Active management is growing. The transition from passive management to active management is another trend fueling the shift to model portfolios. Participants feel more comfortable having their investments managed by a professional money manager who is responsible for their choices. This style of management allows for a portfolio to be highly personalized to the individual investor and desired risk tolerances. After the turbulence of 2020, customized risk management is seen as essential by many investors.
- Technology is driving adoption. As in most industries, technology also plays into the increased traction for model portfolios. Technology is rapidly outpacing the older systems that have long been in place and offers more flexibility to those who have investments in model portfolios. For example, if a participant leaves their company or retires, but likes their current investments, investments from a 401(k) can be rolled over into an IRA or other type of retirement plan within the platform itself. This provides flexibility (and added value) to participants who want to take their investments wherever they go. In the Mid Atlantic platform, a rollover is possible today with a little effort, but we believe as the industry evolves, rollovers could be processed with the click of a button.. Advisors should expect to see this evolution happening sooner rather than later.
Benefits of model portfolios in 401(k) plans
Model portfolios and ModelxChange are so attractive to advisors and sponsors because of the customization, flexibility and personal touch they provide. In traditional investments, risk tolerance is based on age. Alternatively, with the active approach taken in model portfolios, advisors can plug in key points and dive into the personal risk tolerance of the individual investor, regardless of that person’s age. This offers a level of freedom not found in other platforms.
The ability to customize investment strategies encourages people to stay invested in their accounts. Far too often, early-career individuals get discouraged by a big loss and stop investing. On the other end of the spectrum, if someone nearing retirement experiences a big loss, their timeline could be completely derailed. A customizable, active management style and the increased agility it provides, can help prevent such occurrences.
ModelxChange is an open-architecture platform. Managers and advisors can build models that are not limited to plan fund lineups, offering greater flexibility. In the Mid Atlantic model portfolio platform, there are over 27,000 investments available to build into these strategies, providing managers with a large pool of options. After the initial portfolio construction, investments can be swapped in and out, as desired
The coronavirus pandemic derailed people’s lives and initiated a retirement crisis for the whole country. When stressful circumstances occur, such as the unavoidable economic struggles people have experienced over the past year, advisors need to free up time to touch base with their clients and calm their fears. An active approach to investing for retirement could be the solution that helps those impacted get back on the right track, especially when coupled with a models-based strategy that offers customization, increased efficiency and less of a time commitment compared to the outdated approaches lingering in the industry today.
For more information on ModelxChange, click here or feel free to reach out to me directly and I’d be happy to show you the efficiencies the system can provide you.
SVP Institutional Retirement Services | Mid Atlantic Trust Company
A: 1251 Waterfront Place
Mid Atlantic Capital Group is pleased to welcome First Affiliated of the Chautauqua Region, LLC.
First Affiliated of the Chautauqua Region, LLC is headed by Dan Hocking and Joe Cerrie. Mr. Hocking and Mr. Cerrie have amassed 24 and 17 years of investment experience respectively. The group has had a relationship with Mid Atlantic for the past ten years utilizing one of the professional money managers on Mid Atlantic’s platform for their high net worth clients. First Affiliated of the Chautauqua Region, LLC employs a wide range of investment vehicles and services to provide experienced wealth management out of their office in Jamestown, New York.
First Affiliated of the Chautauqua Region, LLC is not a registered entity or a subsidiary or control affiliate of Mid Atlantic Capital Corporation or Mid Atlantic Financial Management, Inc.
Everhart Advisors was recently named 2018 PLANSPONSOR Retirement Plan Adviser of the Year.
Mid Atlantic Capital Group recognizes the uniqueness of financial advisors and the many business models that exists. That is why we listen, collaborate, and develop customized solutions for our business partners. We provide the structure, tools, and support that fits your model, enabling you to successfully grow your business.
To learn more about the ways Mid Atlantic can help you simplify your practice, contact John Wight at 800-693-7800 and email@example.com.
Mid Atlantic recently welcomed to its roster of valued business partners Canterbury Investment Management in Zionsville, Indiana.
Canterbury specializes in providing financial advisers with systematic, rules-based investment solutions. Its mission is to provide strategies that produce the stability needed to achieve long-term risk adjusted growth through compounded returns.
Recently, Mid Atlantic caught up with the Canterbury team for a more in-depth perspective about the firm:
How would you describe the underlying philosophy, principles, and/or strategies you implement when working with your clients?
Canterbury’s philosophy was built on the fact that financial markets and securities are variable, meaning they have both bull and bear markets. The Portfolio Thermostat is constructed to adapt to changes in the market environment similar to how a home thermostat adapts to changes in weather. Instead of measuring temperature, the Portfolio Thermostat is evaluating risk in real-time and making the proper adjustments to remove the portfolio from high risk securities while increasing exposure to lower risk securities.
How is Canterbury Investment Management currently developing and building its brand?
Canterbury’s focus has always been on advisor education and what that means to us is portfolio implementation. We want to be known not only as a company that offers quality strategies but one that can also clearly position ourselves within a portfolio. The ability to effectively position our strategy starts with understanding each advisor’s unique business and their approach to building model portfolios. A brand is built by relationships and we look forward to starting that journey with Mid Atlantic.
What led to your decision to partner with Mid Atlantic on its ModelxChange platform?
Partnering with Mid Atlantic was an easy decision for us. In our initial discussions with Kyle Smith and his team, it was obvious the passion they have for what they do. We have had a great experience working through the due diligence process and hearing about the ideas and thoughts that the team has for the future of the ModelxChange platform. We want to partner with groups that are passionate about what they do because we are passionate about what we do.
Mid Atlantic is pleased to take this opportunity to spotlight valued business partner Certified Benefits Corp (CBC) in Altamonte Springs, Florida.
CBC was founded in 1996 as a member of Certified Financial Group (CFG), with the express purpose of creating a lower cost, customized retirement plan solution for its personal wealth management clients. As an independent recordkeeper and plan administration service provider, CBC’s primary objective is to offer an open-fund lineup not commonly offered by insurance companies and mutual fund providers. The firm partners with major custodians, independent investment advisors, and other third party administrators (TPAs) to provide unbundled, investment-independent retirement plans.
After several years working for another service provider, Christopher Staton, Vice President of CBC, joined the firm in 2003. In addition to performing a variety of roles with CBC and experiencing the many levels of services provided to clients and participants, Chris has been overseeing firm operations since 2007. Mid Atlantic recently spoke with Chris to get a more in-depth perspective of the CBC’s business philosophy:
What do you believe your clients find most unique about working with Certified Benefits? What, if anything, are clients most surprised to learn about your firm?
The most unique feature about Certified Benefits is our willingness to tailor our service to meet the client’s needs. We understand that our clients span different industries, different locations, and each has its own unique company culture. We tailor our service to the client and what they need.
What led to your decision to become a recordkeeper on Mid Atlantic’s custodial platform?
The Mid Atlantic platform has additional features that we will be able to bring to our clients.
How would you describe the underlying principles behind Certified Benefit’s most successful strategies?
Our service comes first… This allows us to create a long-lasting partnership with our clients. This is the main reason that a majority of our clients have been with us for 10+ years.
What are some of the greatest challenges you face in serving the 401(k) space?
Our greatest challenge is to provide efficient services without sacrificing the 5-star service we’ve become known for.
For more information about Certified Benefits Corp, you may visit the firm’s website at: www.certifieddifference.com.
* Please note that the views expressed by our business partners do not necessary constitute the views of MATC.
Mid Atlantic is proud to spotlight and honor business partner Derek Fiorenza, Vice President and COO/CCO of Summit Group Retirement Planners in King of Prussia, PA.
Derek manages business development, client retention, and internal operations at Summit Group Retirement Planners, Inc., an investment advisory firm he co-founded with his father, Anthony. Together, they assist employers with servicing qualified and non-qualified retirement plans, along with supporting the financial planning and insurance needs of individuals through a prudent and disciplined approach.
Yet Derek’s commitment to improving the lives of others isn’t confined to providing financial guidance during office hours. In his spare time, he also serves as the President and CEO of the non-profit organization, Fiorenza’s Food For Friends (F4). F4 collects non-perishable food items for distribution to local food banks at no cost. In addition, F4 rescues perishable meals from restaurants and delivers them free of charge to homeless shelters. You can read more about the charitable work of F4 by visiting: www.f4service.org, and its Facebook page at: www.facebook.com/f4service.
Derek also serves on the advisory board for the Brandywine YMCA and The Emerging Leaders Committee for The Chester County Chamber of Commerce. And if all this isn’t enough to keep him busy, Derek referees and coaches soccer on the side. He also enjoys exercising, reading, and playing the guitar.
“It is my goal to live a purposeful life serving my clients, putting the needs of others before my own, and helping to build up the communities in our country through my philanthropic ventures,” Derek says.
Derek has been working in the securities industry since 2011. He has earned the Accredited Investment Fiduciary® (AIF®) Designation and graduated with a Bachelor of Arts degree in Communication at Villanova University in 2008. He then went on to earn his Master’s of Science in Business Administration from California University of Pennsylvania two years later. While studying for his Master’s, Derek played punter for his school’s football team and was named to the All-Region and All-Conference teams for three consecutive years.
Meet Greg Bakke, Co-Founder and President of Expand Financial. As a Mid Atlantic Capital Group business partner and registered representative of Mid Atlantic Capital Corporation, member FINRA/SIPC, Greg is an independent financial advisor who specializes in defined contribution and defined benefit retirement plan advisory services, including 401(k), 403(b), 457, and IRA accounts. His background in open architecture and technology led him to recently develop a comprehensive, cost efficient retirement plan solution called Ready Go! 401(k), which provides clients with a thorough portfolio review, a strong investment lineup, is fully transparent in terms of fees, and supports the plan sponsor in their fiduciary role.
Greg was born and raised in Denver, Colorado, and attended the University of Colorado at Boulder where he earned a Bachelor of Science degree in business administration with an emphasis in finance and accounting. He also holds a Master’s of Science degree in computer information systems from the University of Denver.
Greg’s background includes over 20 years of experience in finance and technology. He has spent the past 15 years performing various functions for multiple institutional custodians servicing independent record keepers, third party administrators, and registered investment advisors. Greg previously held senior management positions as Chief Technology and Chief Information Officer at Fiserv Trust Services and Trust Company of America (TCA).
After having spent a number of years building and managing “back office” technology infrastructures to support the financial advisory and administration businesses of his employers, Greg formed Expand Revenue Management LLC in 2009. Through this firm, he focused on the ever increasing fee disclosure and transparency needs of the retirement plan industry. With the introduction of 408(b)(2) and other continued DOL ERISA regulation, Expand is uniquely ahead of the marketplace in helping assemble a solution to aid with compliance to the new regulations. Greg is also part of the advisory function behind eFiduciary Advisor, another technology-based solution, and acts as an Investment Consultant 3(21) or Investment Manager 3(38) to retirement plans.
We recently caught up with Greg Bakke to get an inside view regarding Ready Go! 401(k) and his partnership with Mid Atlantic:
What motivated you to create Ready Go! 401(k)?
Retirement plan sponsors need help, advisors need help, and participants need help, all to be successful optimizing the retirement plan. ReadyGo! makes it easy for all three to be successful. We felt, especially in the small to mid-plan market, that good solutions using open architecture exist but constructing the solution is complex if you are not a retirement plan expert. We wanted to make it easy for those to get access to the benefits of open architecture solutions, but with the ease of a bundled product.
What makes Ready Go! 401(k) unique from other retirement planning solutions on the market?
ReadyGo! aligns major open architecture experts into an easy to use turnkey solution. It addresses the issues often overlooked when constructing a plan. The features and benefits include top plan design, optimal investment options, favorable cost versus market, and investment fiduciary coverage. Advisors and plans can get access to top investment managers that they are familiar with, thus allowing the participant access to high end wealth management investments typically not available at the individual level.
Why did you choose Mid Atlantic over other broker-dealers?
Among others, Mid Atlantic specializes in retirement plans (advisory and custody). They get the space better than anyone else we considered. This understanding allows us to build an optimal and compliant retirement plan solution for each and every case we serve. Their access to top record keepers, top investment managers (very streamlined), and strong technology allows us to offer big plan solutions in the mid- to smaller plan market.
What questions should a financial advisor be asking before presenting Ready Go! 401(k)?
The ReadyGo! solution is designed to help all levels of advisors win new plans and improve current plans they are servicing. The main question is: “How does this make me, as the plan advisor, great in a world where I need stand out from the others?” ERISA and retirement plans are complex. We off-load that complexity from the plan advisor, create an amazing solution for their client (and for them), and provide the on-going support to ensure the plan solution remains best in breed. This protects the important client relationship for the advisor. Advisors appreciate that by using ReadyGo! they can quickly become more knowledgeable of the space. They also like that they aren’t ultimately responsible for this expertise.
What is the close ratio of those plans that propose Ready Go! as a solution?
We are closing approximately 75 percent of the proposals we send out.
What are your hobbies and interests?
ERISA. 🙂 Truthfully, I enjoy doing anything outdoors and active. I run marathons, do triathlons, love golf, hockey, etc. Anything that involves my two boys who are also highly active! They keep me on my toes.
Bill McMorran, together with his business partner, Bill Altavilla, formed Green Oak Consulting Group (Green Oak) in 1986. Green Oak works with charitable organizations, individual donors and professional advisors on a consulting basis in order to promote, plan, establish and administer planned gifts i.e. charitable remainder trusts and charitable gift annuity contracts.
Prior to forming Green Oak, Bill was the National Coordinator for AARP’s Tax Aide and Health Advocacy programs in Washington, D.C. where he wrote several tax and financial guides for older people. He is actively involved in various associations and memberships dedicated to improving the quality of life for aging adults. A graduate of Princeton University and Princeton Theological Seminary, Bill lives with his family in Hollywood, California.
Q. What is it about you that people would be surprised to know?
A. I am an ordained Presbyterian minister who still performs weddings.
Q. How did you get to where you are today?
A. Circumstances in our lives can take us down unexpected paths. Growing up in Pittsburgh, I had a paper route which, looking back, wasn’t much different than what we do today. I was really drawn to older adult customers. I enjoyed interacting with them. Later on, as part of my seminary training, we were required to work at a church on the weekend. I didn’t have a car so I wasn’t able to get involved in local suburban church youth groups. Instead, I took the train to Philadelphia to serve an urban church. There were no kids, only angry older people who were forming the Gray Panthers, a grass roots group working on improving the lives of the elderly. Hello Gray Panthers, good-bye youth program! That led to my internship and then full time job with AARP. There I became the older adult tax and health policy expert that led eventually to my work with hospitals and retirement organizations in building planned giving programs.
Q. What do you like most about being an advisor?
A. I love interacting with my client organizations, their leadership, donors and staff in fulfilling their mission through planned gifts.
Q. How has Mid Atlantic helped you with your business?
A. You “get us”. You understand our business model/plan and your boutique operating style provides us with a variety of products and necessary support.
Q. What do you do in your downtime?
A. You can find me at the gym or music festivals like Coachella and Lollapalooza.