Larkspur Data, a leading provider of targeted data and market intelligence for financial advisors in the 401k/qualified plan industry, and RiXtrema, a leading provider of risk management tools and analysis to the financial advisory and broker/dealer community that helps ensure that clients get the analysis and advice they need, announced an alliance that will bring retirement plan benchmarking and red flag data into RiXtrema’s FiduciaryOptimizer platform. RiXtrema in turn will provide Larkspur Data with value-added information on aggregate plan saving, annual percentage rate savings and diversification ratings for complimentary use by Larkspur Data’s clients. The database and analytics will provide insights for financial advisors seeking DOL fiduciary rule software solutions.
“The Larkspur Data team is expert in retirement plan data, providing information on more than a million plans in the US,” said RiXtrema President Daniel Satchkov, CFA. “Their database is a robust, value-added enhancement to our system, enabling advisors to pull in needed data with just a couple of clicks.”
RiXtrem’s IRAFiduciaryOptimizer is an end-to-end solution to document a client’s best interests and fee reasonableness in rollovers as required by the DOL. Detailed retirement plan data is crucial for successful documentation. Larkspur Data will supplement RiXtrema’s existing data sets, which currently consist of Plan Screener, based on the plan’s schedule of assets reported along with Form 5500, and FeeComp, a database of advisors’ fees based on their Form ADV Part 2.
“Plan advisors frequently find that participants could not, or would not, obtain required disclosures from plan sponsors,” Satchkov explained. “The recent DOL FAQ clarification on best interest documentation under the Fiduciary Rule explicitly states that if advisors cannot obtain the plan sponsor disclosure on current out-of-pocket retirement fees, then advisors can use the plan’s annual reporting and benchmarking data.”
Larkspur Data will also power RiXtrema’s 401kFiduciaryOptimizer, a separate part of RiXtrema’s platform that is used to win business in the plan sponsor space.
“At Larkspur Data, we’ve analyzed every plan filing for the past 10 years (over 10 million in total) using 90 different ‘risk’ factors,” said Robert Morris, Vice President of Operations. “Our research has revealed that roughly one-third of all retirement plans are either out of compliance or have significant operational flaws. With this integration, advisors will be able to quickly access data that will enable them to effectively leverage the power of RiXtrema. The quantitative data that RiXtrema will provide us will help our clients gauge whether the plans they are researching are following best fiduciary practices in their investment menu construction.”
The IRAFiduciaryOptimizer, which is experiencing rapid adoption in the industry according to Satchkov, produces a report summarizing why a rollover is in the best interest of the client. Reports can be generated by individual advisors, or by a home office compliance team using an administrator portal to manage outcomes for all advisors/representatives with the firm.
“While there has been much speculation since the election about the future of the DOL Fiduciary Rule, the advisory community recognizes that investor trust is essential to their success and their ability to serve plan sponsors. Ready access to data is critical. All advisors who manage clients’ retirement assets should be prepared to document that the portfolios they recommend are constructed in the clients’ best interests. It is, quite simply, the right thing to do,” said Satchkov.
Founded in 2010, RiXtrema is a portfolio crash-testing company that helps advisors discuss risk with clients. Long used by fund managers, pensions plans and funds of funds, RiXtrema has introduced its risk management tools to the financial advisory and broker/dealer community to help ensure that clients get the analysis and advice they need. The RiXtrema research team received the 2015 Peter L. Bernstein award, one of the most prestigious awards in finance, for its article Risk Estimation and Hedging: A Reverse Stress Testing Approach, published in The Journal of Derivatives in April 2015. RiXtrema solutions include Portfolio Crash Testing; BioniX, the first robo platform for advisors that includes sophisticated risk modeling; IRAFiduciaryOptimizer, the first quantitative DOL Fiduciary Rule Rollover solution, and the related 401(k) Fiduciary Optimizer geared for plan advisors. For more information, visit www.rixtrema.com.
ABOUT LARKSPUR DATA
Larkspur Data Resources is the nation’s leading provider of qualified plan prospecting tools to the financial services industry. They have been in business for over twenty years and currently work on the home office level with over 80% of the country’s top service providers. Larkspur Data Resources provides searchable databases of detailed information and analytics on nearly one million employee benefit plans nationwide. Their services range from tools to assist financial advisors with research and prospecting, identifying fiduciary liability issues, tracking market demographics plus coaching and training. To date, Larkspur Data Resources has helped tens of thousands of financial advisors, insurance agents and wholesalers close billions of dollars in new business. For more information, visit www.larkspurdata.com.