The NTSA’s Country Club Award
It's not "Elite" if it's not fiduciary
The NTSA Elite Advisor Award sounds impressive. I’m sure some impressive and well-deserving people have won it. However, it should not be considered when deciding whom to work with when looking for a highly qualified financial planner. As always, these are my opinions.
When I think of an “Elite Advisor,” I think of someone who always pledges to act in the best interest of their clients. Someone who works to eliminate all possible conflicts of interest, fully discloses those they can’t while doing everything possible to mitigate them. I think of an individual who is above reproach in their marketing efforts and in terms of the products and services they recommend. “Elite Advisor '' conjures up a person who takes on an appropriate number of clients so that they can entirely focus on them. It wouldn’t be out of the question to think that these people advocate for the best possible retirement plans for educators, even if it means their businesses might have to adjust. If you feel similarly when you hear the term “Elite Advisor,” you might want to ignore the NTSA’s Elite Advisor Award.
I have many concerns about this award (and no, I’m not jealous that I’ve never received it. I’d reject it if offered, but rest assured, I would NEVER be a finalist). First, it abuses the term “Advisor.” Second, the qualifications exclude the possibility of hundreds, if not thousands, of advisors from consideration. Third, expressing loyalty to the gods of “open access” is a requirement to put one’s business interests above the best interests of educators' access to quality retirement plans.
Holding oneself out as an advisor means you are acting as a fiduciary. Yet, there is no requirement to act as a fiduciary to be considered for this award. In my opinion, several of the people who have won are the exact opposite of fiduciaries, including one who runs what can only reasonably be described as a multi-level marketing company.
The qualifications to be an “Elite Advisor'' are also laughable and seem created to expressly exclude an entire class of advisors who epitomize the term Fiduciary. What follows are the qualifications directly from the NTSA’s website (I’ve also included the guidelines document here):
To be eligible to be nominated for the EAA Awards Nomination Process, objective, quantitative Advisor criteria must be met:
MEMBERSHIP: NTSA Individual, Associate or Affiliate Membership for three (3) or more years, including the Awards Year, e.g., for the 2025 Awards, member as of 2023 or before.
LENGTH OF SERVICE: Have acted for five (5) or more Awards Years as a Financial Advisor serving 403(b), 457(b) and ERISA non-profit retirement plans and their participants, e.g., for the 2025 Awards Year, at least beginning in 2021;
ASSETS UNDER MANAGEMENT and/or ADVISEMENT:
assets in 403(b), 457(b) and ERISA non-profit plans, plus IRAs;
as of the calendar year end immediately preceding the Nomination Period, e.g., December 31, 2023, preceding the 2024 Nomination Period for the 2025 Awards;
$31,000,000 or more in retirement plan assets under management and/or advisement, personally; this is not a team statistic;
FINANCIAL INDUSTRY LICENSING, OVERSIGHT & CONTINUING EDUCATION: Be licensed for Securities and Insurance; and
FINANCIAL INDUSTRY OVERSIGHT & STANDING: Be in good standing with FINRA and SEC, as well as with state insurance regulators where the advisor is registered and doing business.
Note: The Elite Awards Judging Committee members, the NTSA Leadership Council and the NTSA 2024 Summit steering committee are ineligible to be nominated for the NTSA Elite Advisor Awards in their year(s) of service in these roles. NTSA Elite Advisor Awards recipients for a particular award year are ineligible for five subsequent award years.”
Let’s consider the qualifications.
To be an “Elite Advisor” to educators, you must be a member of the NTSA (National Tax-Deferred Savings Association), an industry organization controlled primarily by Red rated vendors who do not require their representatives to act as fiduciaries for their customers at all times. I get that it makes sense that you must be a member to receive the award, but the promotion of this award suggests otherwise. Last year’s press release was done by the parent organization, the American Retirement Association, which said, “The NTSA Elite Advisor Awards are significant lifetime achievement awards that honor NTSA financial advisor members whose presence and innovative works have helped shape the best practices in serving clients in the 403(b), 457(b) and ERISA non-profit retirement industry.” The award goes to those who “shaped the 403(b)...retirement industry.” Yes, it’s qualified by saying they were members, but the implication is that this is an industry award and that the NTSA represents advisors in the 403(b) industry. I would argue that the NTSA does not represent the overwhelming majority of advisors who both work in the 403(b) space and who commit to act as a fiduciary at all times. If you do not always commit to working as a fiduciary for your clients, you are not an Advisor.
You must have “acted” as a “Financial Advisor” in the 403(b) or 457(b) space for five years; notice it doesn’t say you must have acted as a fiduciary. One would think that the term “Financial Advisor” means they are acting as fiduciaries (as one should), but that is not a requirement and would likely disqualify a significant number of awardees (note: I’m not saying that awardees do not ever act as fiduciaries, but that they are not committing or required to act as fiduciaries at all times when dealing with their clients).
You must have “Assets Under Management'' of at least $31,000,000. This made-up number excludes hundreds of advisors who don’t manage assets but provide fiduciary financial planning and advice to educators nationwide. It also excludes anyone who is working to build their business and who might be doing excellent work.
You MUST be licensed for “securities and insurance.” This phrase is not further defined, but it seems like one must be licensed as an insurance agent to earn this award (I’d update this paragraph if the NTSA would confirm that having an insurance license is NOT a requirement). The overwhelming majority of fee-only financial planners who are full-time fiduciaries are NOT licensed as insurance agents (nor should they be). It’s unclear whether an exception can be made.
It also seems like your odds of winning increase dramatically if you work for one of the “Strategic Partners” of the NTSA. An incredible 70% of winners come from three of the biggest partners and 44% from just one, including every single winner from last year and SEVEN of the eight winners in the past two years. I will note that it appears five of the previous eight winners held the CFP designation (as a CFP certificant, this boggles my mind), which is a step in the right direction.
I would also point out that 71% of the winners have been men; at least, the number is down from its high of 83% of winners.
I want to be clear that I’m not saying anyone nominated or granted this “award” is a bad advisor or someone you shouldn’t work with. I’m saying they might not be an advisor in the legal sense and that they were chosen from a purposely shrunk pool of candidates by a group of people who are not disinterested. You must do your homework and not take this award as a credential. This is an award for those who are part of the club and have pledged to maintain the status quo in the industry; it’s the 403(b) country club award.
To earn this award, you have to agree with the NTSA when they say they will be “Promoting the NTSA values of open access, professional advice, universal standard of care, collaboration and ethical behavior are the key reasons for the EAA process.” Notice how built into this unwritten requirement that the winner(s) must pledge fealty to the idea that educators don’t deserve the best 403(b) and 457(b) plans possible, instead they deserve as many low-quality options as possible (this is what open access means).
Notice that they don’t use the term “fiduciary” or even “best interest”; instead, they opt for words with no real legal meaning, such as “professional advice and universal standard of care.” The ethical standards they mention are not the highest in law.
In short, the award is propaganda. In 2015, the Executive Director said, "NTSA Elite Advisors are truly the 'best of the best' in the industry, focusing on client needs and leading advocacy in their local and national venues." One of these “Elite Advisors” once asked their officials of their home state in an open meeting about 403(b) plans to pledge that they would NEVER allow auto-enrollment for educators. I was one of the leaders of that meeting and such a stupid request shocked me, yet this person was honored as an Elite Advisor. Don’t rely on this award when choosing who to work with for your life savings; do your homework and choose someone who will always pledge to act as a fiduciary.