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New Raymond James Partnerships Add Longevity Planning to the Toolkit

In the age of fee compression, advisors must do more than just portfolio management to demonstrate value. Raymond James is helping by providing longevity planning resources to their advisors.

In 2015, the average client in a fee-based account paid 105 basis points, according to PriceMetrix. Fees could go as low as 30 basis points by 2020, estimates Frank McAleer, vice president of financial planning and retirement solutions at Raymond James, as investment management becomes commoditized and advisor fees compress due to robo advisors and large players like Vanguard and Schwab.

“Don’t bring your prices down; bring the value of your services up,” McAleer said, speaking to a room full of Raymond James Financial Services advisors at the firm’s national conference recently.

Raymond James has unveiled one new partnership and is currently finalizing two others aimed at helping the firm’s advisors differentiate themselves in the marketplace by providing longevity planning for clients. The first partnership is with a Medicare insurance provider, HPOne. McAleer could not name the companies involved with the other two partnerships because the deals are not yet finalized, but one is with a care management company and the other is with a critical care management firm.

“They all have financial implications that really need to be planned out, and you need to have contingencies for them looking into the future,” McAleer said. “We’re not saying that we’re medical experts or doctors or anything like that, but we’re certainly in a great position to pull it together for our clients.”

The broker/dealer launched the partnership with HPOne in December 2016. Under the partnership, Raymond James has a co-branded website, where clients and advisors can get information about Medicare coverage. If a Raymond James advisor opts in to allow the firm to send materials to clients directly, the firm will send clients turning 65 years old (the Medicare eligibility age) a postcard announcing the partnership and the services available.

If a client is interested, they can call HPOne with their advisor or on their own, and HPOne will counsel them on what might be the best Medicare coverage plan for them. Clients can use the service even if they’re already enrolled in a plan.

“A lot of clients aren’t sure if they have the proper coverage, or they’re unhappy with the coverage and they want counseling on whether they’re in the right coverage or whether they should switch,” McAleer said.

HPOne is incented to work with Raymond James because it will write the policy, including Medigap supplemental policies, Part D policies or Medicare Advantage policies, depending on what the client chooses. The advisor is not compensated on the business in any way; it’s simply value-added.

“Really what we’re trying to help our FAs [do] is to get out in front of this, to alert their clients that, ‘Hey, we do more than manage your money. We can help you with health care costs. We have a great partnership with HPOne,’” he said.

One advisor has already won a new account because of the service.

“‘I used this service for a prospect last week, and they loved it,’” said McAleer, quoting the advisor. “‘They called me to tell me how much they learned and how professional HPOne was. They’re also placing a $550,000 account with us I think, in part, because of their experience with HPOne.’”

The firm is also in the midst of finalizing an enterprise agreement with a care management company, which can help clients coordinate care facilities or in-house assistance. The company will also provide an evaluation of alternative living arrangements if the client can’t age in place or stay in their home anymore. They also provide moving assistance, if need be.

The FA would put their client in touch with the company; the client would then meet with a care manager who’d do an assessment. There’s a fee involved with their services, but Raymond James customers would get a discount.

The third partnership — still being finalized — is with a critical care management company, which provides advice and services for those with complex medical conditions. Say, for example, a client is diagnosed with cancer; they will identify the best specialists in the area and whether or not they can get a second opinion. They will also centralize the person’s medical records.

The partnership would also be structured as an enterprise agreement, so clients would get a price break for the services.

“Advisors are the first phone call many, many times with clients that are panicked because a parent took a fall or became sick,” McAleer said. “And they don’t know where to turn. But they know they need to talk to their advisor because they’re going to need financial resources to take care of this.

“At the end of the day, from a business perspective, it’s relationship building; it strengthens and deepens the relationship in a big way with a client if you can help them with these things.”

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