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Thursday, May 18, 2023

Management Change at NFP Retirement Suprises RPA Trade

In a shocking transfer certain to ship shock waves across the retirement plan advisor business, Vince Giovinazzo and Nick Della Vedova have resigned from NFP to concentrate on RPAG and flexPATH, retaining the identical titles as CEO and president, respectively. Joel Shapiro is now president of NFP Retirement. The deal closed Tuesday.

The 2 business icons constructed a formidable empire, which included one of many first RPA aggregators with effectively over $100 billion in DC property, the main apply administration expertise and instruments supplier and, most just lately, an funding supervisor that features the quickest rising goal date sequence.

Giovinazzo based the corporate after wholesaling for Principal and was joined shortly thereafter by Della Vedova, additionally from the Des Moines supplier, to start out 401kAdvisors. Realizing the instruments they constructed to run their very own apply could be beneficial to different RPAs, they began RPAG, not solely licensing their expertise but in addition partnering with advisors on bigger plans.

After promoting, NFP Retirement, together with Captrust, Sageview and NRP—a agency that they had briefly partnered with—turned one of many main RPA aggregators rising organically by way of their RPAG community and acquisitions.

In 2015, partnering with BlackRock and Wilmington Belief, now Nice Grey, they launched flexPATH, which has revolutionized the RPA business in some ways and boasts nearly $40 billion AUA. Not solely did flexPATH herald the surge of CITs within the small and mid-sized 401(ok) markets, advisors realized the chance to generate further income simply as charges for plan stage providers had been beneath assault, satirically attributable to instruments like these supplied by RPAG made many extra much less skilled advisors appear proficient.

Possibly coincidentally, Madison Dearborn, the non-public fairness agency that owns NFP, just lately closed on Wilmington Belief’s CIT enterprise.

“NFP Retirement, RPAG and flexPATH have all skilled large progress.” acknowledged NFP. “This new construction will allow every entity to take the subsequent step ahead from a progress and management standpoint. … with Joel Shapiro’s three a long time of business expertise, together with 13 years in a senior management position, he was a pure option to grow to be the subsequent president of NFP’s retirement division.” 

“RPAG and flexPATH are actually independently owned and now not a part of the NFP company construction.” acknowledged NFP. Most if not the entire crew and management at RPAG and flexPATH will stick with the 2 corporations led by Giovinazzo and Della Vedova.

Although they declined to remark, the Woods lawsuit with flexPATH as a named defendant at the moment at trial needed to have an effect on the choice to separate NFP to keep away from conflicts of curiosity. The unanswered query is whether or not Madison Dearborn retains an curiosity in these different two entities.

Extra importantly, flexPATH needs to develop distribution. Della Vedova mentioned, “RPAG will probably be seeking to develop {our relationships} with RPA aggregators, which is able to improve distribution alternatives for flexPATH Methods.”

FlexPATH has been phenomenally profitable with the quickest rising goal date sequence partnering with dozens of property managers on a number of methods. Whereas most DCIOs, particularly these struggling however even these which are doing effectively, are greater than prepared to collaborate, the query is whether or not different aggregators with whom NFP has been a fierce competitor, will probably be prepared to accomplice.

All issues being equal, rivals could not need to accomplice with an outdated enemy who has deliberately not interacted with others at business occasions. However issues are by no means equal so if there’s a greater deal available or methods to higher serve purchasers and be extra aggressive, why not?

Paradoxically the Woods lawsuit could assist flexPATH as different aggregators won’t need to get in Schlichter’s cross hairs by creating proprietary merchandise.

And the partnership with Nice Grey, which has $129 billion AUA, ought to solely get stronger as they’ll now supply flexPATH’s distribution to their 50 subadvisors with 600 funds, which might probably develop past NFP and RPAG. “flexPATH is a key distribution accomplice for Nice Grey, and that relationship will proceed. All flexPATH’s CITs are custodied at Nice Grey,” Giovinazzo mentioned.

The 401(ok) and retirement business is remodeling quickly. In an period of hyper-change, advisors and suppliers don’t simply must evolve, they should reinvent themselves, exemplified within the current shifts at NFP coupled with the Nice Grey transfer.

Fred Barstein is founder and CEO of TRAU, TPSU and 401kTV.

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