Measuring Financial Wellness…who does that?

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.
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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!