Publications

Cultivating a Successful Broker/PPA Relationship Pensions News & Views from Nationwide Life Insurance Company

By Sheldon M. Geller, Geller Group Ltd

How do you form a relationship with a broker?

We create a personal relationship with the broker to establish trust and confidence. We distinguish our firm and its services from the large financial institutions and back office administrative operations by offering services that these organizations simply do not provide. This includes acting as ERISA counsel, conducting employee presentations and providing year-round consulting.

We prove to the broker that we support their business by conducting a joint, qualifying telephone conference call, producing a joint proposal for services and attending a joint sales presentation. We also provide the plan sponsor with services that help the broker of record service the client, including quarterly performance summaries, quarterly newsletters and a participant hotline. Many brokers are unable to provide these services or are unwilling to do so unless the plan pays them significant commissions.

How does your firm work so effectively with brokers?

Brokers require support and need to understand that a third party administrator is going to protect their interest. Third party administrators work closely with plan sponsors and are generally in contact with plan sponsors more often than brokers. We carbon copy brokers on all correspondence and reports and advise them of any developments with the plan sponsor. Over time, brokers realize they can simply refer business to us and consider our firm, in effect, a department of their organization. We make outsourcing attractive and intelligent for their business.

What is your working relationship with your broker when selling and servicing a plan7

Our working relationship is as ERISA counsel, third party plan administrator and recordkeeper for the plan sponsor. Whereas, the broker is the broker of record and receives all commissions from the product. We do not share fees with a broker nor do we ever expect to receive a portion of the commission. We consider a broker a professional with whom we service a joint client, much the same way we consider an accountant and an insurance agent. Although we consider ourselves among equals with the broker servicing the plan sponsor, there are instances in which we defer to the broker as having in effect "hired" us or having referred us to the plan sponsor.We are also sensitive to the broker's relationship beyond the plan, if indeed the broker manages other assets for the employer, its executives and employees.

What ongoing services do you provide to your 401(k) clients?

We provide monthly allocation deposit services, quarterly employee statements and quarterly valuation services, semi-annual testing services, annual reporting and disclosure services, employee presentation services, quarterly performance summaries and newsletters, annual fiduciary reviews and year-round consulting advice and support. Our services include telephone conferences and meetings for which we do not charge time and expense.

What is your working relationship with a client and the broker after selling a plan?

Our working relationship is as a team player together with the broker and accountant or attorney, as the case may be, to service the plan and the client. We carbon copy interested parties on all correspondence and reports and advise these other professionals of client developments from time to time.

We improve the quality and range of a plan's services and reduce the client's fiduciary liability without increasing plan costs. Geller Group successfully integrates our administrative and legal services with Nationwide's investment management program, thus streamlining plan administration. We believe we provide the right mix of services and programs to meet the broker's needs to achieve the plan sponsor's long-term goals.