Linsco Group ePlans Into K

401kWire.com -- April 18, 2007 -- How does an advisory shop get serious about the 401(k) business if they've only got a few plans? Wealth Enhancement Group has decided to go full throttle by launching its own private label defined contribution product, WEG401k. The 401kWire has learned that the Wayzata-based LPL affiliate is about to ink a deal with ePlan Services.

John MacGregor, senior vice president of retirement marketing for LPL, could not be reached for comment. However, ePlan president and CEO Mark Gutrich and Wealth Enhancement executive vice president Mark Parrish both confirmed the imminent deal. According to Parrish, it should all be official within the next week.

"It's close, but it's not completely 100 percent through," Parrish revealed in an interview with The 401kWire, referencing the compliance approval process Wealth Enhancement has been working since switching from SII Investments to LPL in February for broker-dealer services. "We've been sitting here waiting for approval."

While Wealth Enhancement has a strong presence in the Minneapolis area--the firm's 16 advisors work with roughly $2.4 billion in client assets, and they even have their own radio show for the Twin Cities--Parrish readily admits that retirement has not been a focus for them. All that, however, is about to change.

"We've taken over 401(k)s more by accident than on purpose," Parrish explained. "Now we're actually going to pursue that market ... and a unique piece of our firm is we're a marketing-driven firm."

By teaming with ePlan and leveraging its own strong marketing in the region, Wealth Enhancement hopes to win plans in $1 million to $5 million market. Parrish describes ePlan's product as an ideal fit for his firm.

"They're an electronic service provider offering a totally transparent plan ... and we can customize the model portfolios," Parrish opined. "All those little pieces made a lot of sense to us."

But Parrish stressed that Wealth Enhancement Group will not simply push its product on prospects--they will still offer other retirement platforms as well.

"We're not going to lead with this product," Parrish insisted. "We're going to lead with the consultative piece."

Wealth Enhancement isn't the only advisory shop launching an ePlan private-label product. According to Gutrich, ePlan has 17 other private-label partners, along with three "white-label" partners (who do not brand their ePlan products themselves). Currently about 2,500 retirement plans through ePlan hold approximately $325 million for 36,000 participants.

One of ePlan's other new private-label partners is Corporate Benefit Advisors, a National Financial Partners team in Charlotte, North Carolina. Unlike Wealth Enhancement Group, CBA already has a big footprint in the retirement space--they boast $1 billion in 401(k) plan assets. According to managing partner Will Byron, CBA wasn't even looking to private label, but ePlan made sense anyway.

"The clients like it. It's a great platform," Byron told The 401kWire. "It is one of the greatest things I've ever seen."

Byron cited the platform's a la carte, online and efficient nature, along with the recently-added participant revenue sharing feature, as key reasons for using ePlan. "Now you have the choice on revenue sharing," Byron said. "Even the statements can be in print or online. Everything is streamlined."

CBA launched their Select401k earlier this year and had already added at least seven plans by the beginning of March, before their marketing campaign even started to kick in.

"This is a solution for small clients, where it's hard to get fee disclosure," explained Byron, who usually focuses on larger plans with between $5 million and $200 million in assets. "We expect to add 20 to 25 plans to it this year."