In a stunning move sure to send shock waves around the retirement plan advisor industry, Vince Giovinazzo and Nick Della Vedova have resigned from NFP to focus on RPAG and flexPATH, retaining the same titles as CEO and president, respectively. Joel Shapiro is now president of NFP Retirement. The deal closed Tuesday.
The two industry icons built an impressive empire, which included one of the first RPA aggregators with well over $100 billion in DC assets, the leading practice management technology and tools provider and, most recently, an investment manager that includes the fastest growing target date series.
Giovinazzo founded the company after wholesaling for Principal and was joined shortly thereafter by Della Vedova, also from the Des Moines provider, to start 401kAdvisors. Realizing the tools they built to run their own practice would be valuable to other RPAs, they started RPAG, not only licensing their technology but also partnering with advisors on larger plans.
After selling, NFP Retirement, along with Captrust, Sageview and NRP—a firm they had briefly partnered with—became one of the leading RPA aggregators growing organically via their RPAG network and acquisitions.
In 2015, partnering with BlackRock and Wilmington Trust, now Great Gray, they launched flexPATH, which has revolutionized the RPA industry in many ways and boasts almost $40 billion AUA. Not only did flexPATH herald the surge of CITs in the small and mid-sized 401(k) markets, advisors realized the opportunity to generate additional revenue just as fees for plan level services were under attack, ironically due to tools like those offered by RPAG made many more less experienced advisors seem proficient.
Maybe coincidentally, Madison Dearborn, the private equity firm that owns NFP, recently closed on Wilmington Trust’s CIT business.
“NFP Retirement, RPAG and flexPATH have all experienced tremendous growth.” stated NFP. “This new structure will enable each entity to take the next step forward from a growth and leadership standpoint. … with Joel Shapiro’s three decades of industry experience, including 13 years in a senior leadership role, he was a natural choice to become the next president of NFP’s retirement division.”
“RPAG and flexPATH are now independently owned and no longer part of the NFP corporate structure,” stated NFP. Most if not all of the team and leadership at RPAG and flexPATH will stay with the two firms led by Giovinazzo and Della Vedova.
Though they declined to comment, the Woods lawsuit with flexPATH as a named defendant currently at trial had to affect the decision to separate NFP to avoid conflicts of interest. The unanswered question is whether Madison Dearborn retains an interest in these other two entities.
More importantly, flexPATH wants to expand distribution, Della Vedova said, “RPAG will be looking to expand our relationships with RPA aggregators, which will increase distribution opportunities for flexPATH Strategies.”
FlexPATH has been phenomenally successful with the fastest-growing target date series partnering with dozens of assets managers on multiple strategies. While most DCIOs, especially those struggling but even those that are doing well, are more than willing to collaborate, the question is whether other aggregators with whom NFP has been a fierce competitor, will be willing to partner.
All things being equal, competitors may not want to partner with an old enemy who has intentionally not interacted with others at industry events. But things are never equal so if there’s a better deal to be had or ways to better serve clients and be more competitive, why not?
Ironically the Woods lawsuit may help flexPATH as other aggregators might not want to get in Schlichter’s cross hairs by creating proprietary products.
And the partnership with Great Gray, which has $129 billion AUA, should only get stronger as they can now offer flexPATH’s distribution to their 50 subadvisors with 600 funds, which could potentially expand beyond NFP and RPAG. “flexPATH is a key distribution partner for Great Gray, and that relationship will continue. All flexPATH’s CITs are custodied at Great Gray,” Giovinazzo said.
The 401(k) and retirement industry is transforming rapidly. In an era of hyper-change, advisors and providers do not just need to evolve, they need to reinvent themselves, exemplified in the recent shifts at NFP coupled with the Great Gray move.
Fred Barstein is founder and CEO of TRAU, TPSU and 401kTV.