Fiduciary Is Fun!
(a.k.a. I heart taxes)
(a.k.a. I heart taxes)
I just picked up a new client and the reason might be a bit surprising. The client was quite happy with their 401k Recordkeeper and made it clear from the outset that they were making no changes with them. Rather, they did not feel that their advisor was moving the needle with employees and it was time for a replacement. They decided to interview prospective advisors, including me, but were not sure what they wanted other than “better engagement with employees.”
After 25 years of working with corporate retirement plans, I did not find this prospect/client to be much different than most. They felt like something was lacking with their existing advisor but couldn’t clearly see what needed to be done to improve things. It’s not their fault. Their job is to run their business not understand everything there is to understand about their 401k plan.
When meeting with a prospect like this, I find it always helpful to inquire as to their wish list and when they invariably struggle (again, not their fault) that is the point where I am able to offer some possible suggestions. What I generally recommend as one of the first items on the list is that it be shown how the plan will be improved through objective data by hiring me. Data should drive our analysis around improvements and serve to justify initiatives, but outside of actual investment performance returns, most companies struggle with defining how the plan is objectively improved.
The first step in showing improvement is to get an analysis of where we are today. For this client, the reason they awarded me the business was my ability to actually baseline today the state of the employees’ financial security and roll that up to an overall corporate score. From here, we will target individuals and groups for financial training and measure the results of actions taken. Over time, we will benchmark the plan again and be able to measure improvements.
This doesn’t sound all the complicated, right? Nevertheless, you might be surprised how few people understand how and why benchmarking current state is so important. To learn how I can help you and your employees, please give me a call!
For far too long, some might say from the very beginning, employers and employees have viewed their workplace benefits in silos. The company's Retirement Plan stood on one side and the Health Plan on the other. Separate and distinct with no overlap. Is that really how they should be viewed?
Probably not. When employees are financially secure, the positive benefits manifest in several areas. And it makes sense that they would. To presume that employees who are financially stressed outside on the job would leave all those stresses in the parking lot when they walk into work each day is simply naive. Moreover, those financial stresses can take on a physical toll.
Research from Prudential Retirement shows that financially stressed employees are
* 190% more likely to be depressed
* 88% more likely to be stressed overall
* 50% more likely to experience a disability claim
* 32% of Americans say that lack of money prevents them from living a healthy lifestyle.
What do these and other statistics like them mean for employers? Ignoring your employees Financial Security will harm you in other ways including increased health insurance costs as well as workers compensation costs. What's the answer? Pay people more money? Actually, no. The answer is to help employees gain control of their financial lives through better budgeting, planning, and other tools to put them in a better place.
Want to learn how? Give me a call!