60 Seconds with...David Tyrie
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David Tyrie, head of Putnam's retirement services unit, works directly with 401(k) sponsors and financial advisors. We sat down with Tyrie to get the latest dispatch from the front lines.
Registered Rep.: What type of growth are you seeing in defined contribution sales among intermediaries?
David Tyrie: FRC is predicting growth of the DC market from 2007 to 2011 at 7 percent. Brightwork Partners research shows that 60,000 DC plans over the next 12 months are going to change vendors; that represents $206 billion. The Retirement Service Roundtable says that 87 percent of DC plans this year involved an advisor. Those stats illustrate tremendous growth over the next five to six years.
RR: This was once the domain of pension consultants. Why are more advisors winning this business?
DT: Plan sponsors recognize they need help with three things: fiduciary issues, plan design issues and, most importantly, employee savings. Those things wrap up into creating a plan that actually works. In the old world, the pension consultant would help choose a vendor. Advisors recognize the need to partner not only to sell a plan, but make sure that plan is successful for years to come.
RR: How does that partnership work exactly?
DT: At Putnam, we make sure there is a business plan with goals that are monitored on a regular basis. We do the administration, record-keeping, communication, education and monitoring. The advisor is the quarterback; he owns the relationship with the sponsor. Advisors push us on a daily basis, making sure we're innovative and meeting sponsor needs.
RR: How do the advisors get paid?
DT: There is the hard-dollar approach where you pay a flat fee. There's the traditional standard commission. With the new pension bill this notion of revenue-neutral or level-load is important because it is something we've been doing for a long time, which is making sure the advisor is unbiased. They get paid the same amount for selling Putnam products as they do selling other products.
