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PLAN SPONSORS IN
Diversified Investment Advisors (Diversified) has both
feet in the new world of corporate retirement plans and
is not looking back. A division of AEGON, the Dutch
financial service company that also owns Transamerica,
Diversified record keeps $35 billion and has 2,496
institutional clients as of December 31, 2006. With its
roots in a “manager of manger” investment philosophy,
Diversified has moved to an open, transparent platform
sold through advisors focused on plans with more than $5
million.
The norm in the Mid Market has become what is known as
gross to net pricing. Simply put, the record keeper
establishes a price to service a plan and then
calculates how much revenue sharing it receives from the
funds selected. If the revenue share is more than the
established price, the provider returns it to the plan
or, alternatively, the sponsor writes a check if the
revenue sharing does not cover costs. This pricing
system does not put a record keeper in a position to get
more simply because of the funds selected and they are
not incented to push the plan towards favored funds.
Diversified not only does gross to net pricing with
total transparency, it prices the plan the first year
anticipating 15% growth so that it does not need to
re-price every year.
Clients use 600 funds currently, but all mutual funds,
along with alternative investments, are available. In
the manager of manager environment, they will disclose
what the sub-advisor is paid. Along with internal asset
allocation funds, Diversified offers outside funds as
well as a no-cost glide path using plan funds as the
underlying investments. The company does nothing but
retirement plans with capabilities in DC, DB, 401(b),
457, Taft Harley, and Non-Qualified. Diversified uses a
proprietary record keeping system.
With transparent gross to net pricing, open
architecture, cost-free glide-paths, and a focus on
advisors, Diversified has all the attributes that Mid
Market plans and advisors are looking for in a total
retirement outsourcing partner.
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