Interview: Chad Azara, Professional Capital Services

Chad Azara is one of the stars of the retirement plan business and is one of the great resources for advisors who need to know a thing or to about what a great third party administrator is and PCS is one of the fastest growing TPAs out there.

Q: How did you start in the retirement plan business?

A: My first job out of college I went to work for Prudential as a financial planner, which I quickly learned getting someone to invest a substantial amount of money with you at 21 years old was a bit of an uphill battle. So I started reaching out to small businesses and I sold my first retirement plan. I didn’t fully embrace the Prudential business model so I moved on to Schwab Retirement Plan Services. At the time the division was relatively small (about 100 people) and run by now CEO of Schwab, Walt Bettinger and is where I really started to understand, appreciate and enjoy the retirement plan field working my way through studying his leadership, vision and taking on multiple positions throughout the firm over two different stints and 13 years.

Q: What is PCS?

A: Professional Capital Services or PCS was founded in 2001 by tax and ERISA attorneys who saw the need for a conflict-free fee-transparent retirement solution with no hidden agenda. From day one PCS had a vision of complete transparency, which has allowed them to be a leader in the retirement plan industry. PCS combines state-of-the-art technology with an experienced and dedicated team of retirement plan professionals to deliver the most complete and highest quality retirement plans available. Combined with our two sister companies TheAdvisorLab , AdvisorTrust and the firms focus on clients’ needs has built the strong foundation that keeps PCS rapidly growing.

Q: As a third party administrator, how has fee disclosure affected PCS?

A: Fee disclosure has had a positive effect on PCS, we have always taken the approach of full fee disclosure, having no hidden agenda and “no plan sponsor left behind” in terms of plan and fiduciary compliance. We now are able to show what the true costs of a competing offering which has led to expeditious growth, with PCS doubling in size over the last 4 years to over 4 billon in retirement plans.

Q: You work with a lot of advisors, what do you think will be the impact of the fiduciary rule?

A: For the advisors we work with it won’t change much as almost 100% of the plans we service have either a 3(21) or 3(38) fiduciary managing the investments of the plan. However, I believe it does provide a great deal of opportunity for advisors who have been operating as fiduciary and have expertise in the retirement plan space. I believe many of the advisors whom are experts in this field will drop their retirement plan clients because they either aren’t allowed to be fiduciaries or they don’t want to take on the extra liability if it isn’t a core business line for their practice.

Q: What is the biggest thing that advisors don’t know about the 401(k) business, but should?

A: Many advisors think that “spreadsheeting” and being the cheapest provider is the best way to win and keep business. The retirement plan industry has definitely seen a great deal of price compression on all sides of the business. However, it is all about value for the service, you don’t have to be partner with the cheapest provider, you don’t want to be the cheapest advisor, you do however have to provide value for the services you are providing. If the advisor and their retirement plan provider are providing quality resources, tools, and service support, the majority of plan sponsors care more about taking responsibilities off their desk, quick accurate responses and helping their employees, rather than having the cheapest plan that puts more burden on them.

Q: PCS has been one of the leaders in fee transparency, do you think revenue sharing is part of a past era?

A: Yes, the overwhelming majority of plans on our platform have the lowest share class available in the plan lineup or model portfolio. We have always fully disclosed and offset all the revenue sharing received against plan expenses, therefore the point of revenue sharing is minimized in our business. We believe that the rest of the industry is catching up to this standard.

Q: Participant engagement is a hard battle. How has PCS help plan sponsors and advisors with that?

A: PCS uses several tools for participant engagement, including Smartplan web video based education and enrollment services, GAP analysis reports, and retirement snapshot reports sent to participants quarterly on every plan. PCS has enrollment presentations we make available for advisors and can also assist with enrollment/education meetings if requested. We are also in the process of engaging with a financial wellness firm to assist companies increase their employees overall financial wellness even outside of their retirement plan.

Q: Do plan sponsors understand better the needs of hiring a good TPA?

A: I think with so much focus on the retirement plan industry lately, they have a better understanding than they ever had in the past. However, I believe most still have a long way to go, because many firms we compete with aren’t providing a high level of service and make it difficult to understand what they are actually paying. For most small businesses the owner or one of the executives is the plan sponsor, whom are focused on facilitating the success of their business, not the success of their retirement plan. Asking them to fully understand what constitutes one good firm over another can be a daunting task for the smartest of people.

Q: Do you think advisors understand better the needs of hiring a good TPA?

A: The advisors that work with PCS understand the benefits of hiring a good retirement plan provider partner. We are business consultants, helping them not only with specific retirement plan questions, but also how to be successful in their retirement plan business. We are partners in each other’s successes in helping their plan sponsors and employees retire on time. Successful retirement plan providers in the small to mid-market space have good partners that help facilitate their success instead of vendors whom aren’t engaged in the success of their business.

Q: Where can people find out more about PCS?

A: They can go to , and to learn more about PCS, call me or one of the regional VP’s on my team at 1-877-272-4015

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