RBJ Article: Consultant helps with managing benefits - Westminster advises CFOs on ways to stem growing expense

2016-05-06

By: Nate Dougherty

As benefit plans get more expensive and more complicated Westminster Consulting LLC sees more room to grow.

The Rochester-based company provides fiduciary advice and investment research to clients with a focus on benefit plans. The company has used its expertise in the field to post nearly five years of growth of 15 to 20 percent. It is a mark company leaders said they believe will continue as these benefit plans grow more complicated.

“There are a lot of CFOs looking at the increases in their costs and trying to find what they can do to mitigate that,” said Sean Patton, a partner and senior consultant at Westminster Consulting. “We’ve built the intellectual capital that allows us to bring great ideas and value to companies addressing those plans.”

The growth of Westminster Consulting has come in direct proportion to the increasing complications for clients addressing their risks, said Thomas Zamiara, a partner and senior consultant. The company works with clients on de-risking strategies for defined benefit plans, governance oversight for defined contribution plans and strategic planning for endowments and foundations in the non-profit sector.

“The environment has changed dramatically in the last five or six years,” Zamiara said. “There is more acknowledgment on the part of companies about their risks. They’ve always been used to dealing with business risks but haven’t always thought that way about benefits."

“For a company with $50 million in revenue, they could be spending a substantial amount toward benefits, and there are risks that have crept up in there that for a lot of years CFOs haven’t looked at.”

The regulations are growing even this spring, Patton noted. In early April, the U.S. Department of Labor released its version of the fiduciary conflict of interest rule that holds to a higher standard brokers, agents and financial advisers, who are recommending investments to retirement plan sponsors.

This brings new complications for retirement plan sponsors, he said, requiring them to exercise greater scrutiny with service providers.

Westminster Consulting has found success with clients by helping them to find and identify these risks, asking these companies to change the way they look at benefits.

“For a client with a $100 million 401(k) plan, we ask them how they would treat it if it were a $100 million business unit,” Zamiara said. “Then usually a light goes off, and they want to talk to us about their risks, the legal landscape and the class action landscape.

“Regulators have really stepped up their enforcement; both from the IRS and the Department of Labor, and for the most part employers are ill-prepared. They are now seeking quality people to help them navigate it, and that’s been one of our biggest drivers of clients in the past few years.”

The company helps clients address their own risks, making sure they adhere to all the new and emerging fiduciary rules. Westminster Consulting also gives advice tailored to each type or organization or industry.

“For a hospital system there are going to be some very unique challenges, and for non-profit organizations there is a need to tie in the fiduciary or regulatory risks with a desire to stay focused on their mission,” Zamiara said.

Zamiara said he believes as the landscape gets more complicated, it will continue to push growth for Westminster Consulting. He predicts the company wills expand at roughly the same clip it has for the past five years.

“There is always a lot of concern about the unknown,” he said. “We talk to a lot of companies, and they say they’re afraid of what they don’t know they don’t know. There’s a big appetite for outside assistance.”

natdougherty@rbj.net / 585-546-8303

Reprinted with permission of the Rochester Business Journal.