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CAPTRUST Releases Position Paper on the Advantages of Scale in the RIA Industry

CAPTRUST launched a new position paper addressing how companies can best prepare their nonqualified deferred compensation plans for growth driven by rising state and federal taxes and fueled by improved capital markets. The paper advocates for a comprehensive process to craft a plan financing strategy that provides attractive benefits without compromising corporate balance sheets or cash flow.

CAPTRUST Financial Advisors, one of the nation’s leading independent retirement and investment advisory firms, today launched a new position paper addressing how companies can best prepare their nonqualified deferred compensation plans for growth driven by rising state and federal taxes and fueled by improved capital markets. The paper advocates for a comprehensive process to craft a plan financing strategy that provides attractive benefits without compromising corporate balance sheets or cash flow.

In today’s economic environment of rising tax rates, increased competition for executive talent, and expense scrutiny, companies should take an active role in managing their plans to ensure they are positioned to attract, retain, and reward highly compensated employees in the most economical way possible. In this paper, CAPTRUST details three key criteria for evaluating plan financing; (1) identifying the right financing method, (2) selecting an earnings hedge strategy, and (3) targeting the right funding level. Understanding these interdependent decisions can help plan sponsors better manage plan costs, reduce balance sheet volatility, and help secure participant benefits.

“While most nonqualified plans are informally funded, in many cases sponsors have not fully evaluated the options available to them or made intentional choices about plan financing,” according to Jason Stephens, CAPTRUST Director of nonqualified executive benefits and one of the paper’s co-authors. “If the interest we are seeing from key executives is any indication, there will be significant growth of nonqualified plan balances in coming years. Plan sponsors should pause and reassess their plans to make sure they are prepared,” added Stephens.

A nonqualified deferred compensation plan allows highly compensated employees to make pre-tax contributions of up to 100% of compensation which helps to bridge the retirement savings gap due to IRS pension plan contribution limits.To download a copy of the paper, “A Three-Step Approach to Nonqualified Plan Financing: Now is the Time to Revisit Your Strategy”, click here.

About CAPTRUST Financial Advisors

CAPTRUST Financial Advisors is an independent investment research and fee-based advisory firm specializing in providing retirement plan and investment advisory services to retirement plan fiduciaries, executives, and high-net-worth individuals. Headquartered in Raleigh, N.C., the firm represents $85 billion in client assets with offices in Alabama, California, Florida, Georgia, Iowa, Kansas, Massachusetts, Michigan, Minnesota, New York, North Carolina, Ohio, Pennsylvania, Texas, Virginia, and Washington, DC.

About the CAPTRUST Author

Rush Benton serves as senior director of strategic wealth for CAPTRUST Financial Advisors. Rush leads the firm’s private wealth business, growing assets both organically and through acquisition of independent, fee-based registered investment advisors. Previously, Rush served as cofounder and chief executive officer of WealthTrust, one of the first RIA consolidators. Under Rush’s leadership, WealthTrust grew from a start-up venture, to a wealth management platform with $10 billion of assets under management through the acquisition of 14 investment advisors across the U.S. Rush is a graduate of Vanderbilt University and is also a Chartered Financial Analyst (CFA).