2019 RPAY – D’Aiutolo, Malcolm & Associates Investment Consulting Group at UBS Financial Services Inc.

The D’Aiutolo Malcolm & Associates Investment Consulting Group, in Rochester, New York, has a motto in the office: “Family first.” Not only does the internal team feel like family, but it also thinks of its plan sponsor clients, their participants and the participants’ family members as family.

“We manage $3 billion of assets, but we always look at those assets as being made up [of] individuals and their families,” says Paul D’Aiutolo, senior vice president, investments, at the firm, a financial services team of UBS.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

According to the team, D’Aiutolo Malcolm & Associates took a “major turn for the better” seven years ago when it hired Alicia Malcolm to help D’Aiutolo—who had launched the company as a sole practitioner—enhance client deliverables and the overall business. Both D’Aiutolo and Malcolm began attending all prospective client calls and meeting with existing client committees. The team also added Kaitlyn Stagnitta, Marc Brondon, Amanda Marshall and Donna George.

“The [‘family first’] mindset has allowed our clients to feel they truly have a team supporting them, with each person on the team providing a different, yet valuable touchpoint,” D’Aiutolo says.

As plan committees continue to grow, the team felt its changes also provided a “unique way to compete,” leading to significant growth since that time. During the team expansion, D’Aiutolo Malcolm & Associates also made a point to hire a diverse, multigenerational group. On the 401(k) side of the business, the average employee age is 35, and there are an equal number of men and women.

“We wanted to build a team that mirrored what we were seeing [on] our committees,” D’Aiutolo says. “It’s more and more common to see younger professionals and more diverse committees, and we wanted to build a team that could mesh culturally with the people we were doing business with.”

Additionally, with the hiring of younger professionals, clients feel secure knowing they could count on the same service team for decades, D’Aiutolo explains.

As a “family first” culture, the team wants to make sure its 40,000 participants are taken care of. Accordingly, it places a focus on education and pays particular attention to participants who lack confidence in their retirement planning. It also makes sure plan design gives participants the chance to have the best possible outcomes.

The team believes there are a few basics that all clients should have, or consider having, such as automatic enrollment that meets the match level; automatic increase to a number that, by combining employer and employee contributions, adds up to 15%; re-enrollment annually to the auto-enrollment rate; fee levelization; and the utilization of Fiduciary Benchmarks Inc. to ensure fees are reasonable.

“We actually lose sleep when our clients choose to not go down the path of auto-enrollment, automatic increase and re-enrollment,” D’Aiutolo says. “We know these techniques work, and that leads to not just better outcomes but actual wealth creation.”

The consulting group adheres to a four-step process in which participant engagement is paramount. First, it helps participants enroll and understand the difference between Roth and traditional contributions. Next, it helps them decide on an age-appropriate asset allocation. Third, it checks whether they are on track to replace their income in retirement. And fourth, it provides guidance on overall financial planning and wellness.

After Alicia Malcolm joined the group, the team increased its participant engagement even more by adding personalized financial planning. The individualized attention allows participants to see their whole financial picture clearly and “address their retirement plans confidently,” D’Aiutolo says.

For however long participants are under the team’s advisement, it wants them to be in a better place when they leave than when they started, having gained the knowledge to achieve their retirement goals. —Corie Hengst

2019 RPAY – LHD Retirement of LPL Financial

Over the past 12 months, LHD Retirement, in Indianapolis, has been on a mission to help non-savers address the financial concerns of today that keep them from saving for tomorrow. LHD identified a group of employees who needed to save more in their company’s retirement plan—they were typically lower-income with little confidence in financial matters. Rather than discussing retirement savings, LHD’s campaign focused on more pressing issues for these workers such as budgeting, debt reduction and building an emergency savings account.

“For this group, retirement planning was so far removed from the everyday that the most effective strategy was to help them first build a solid foundation so they could start to plan for the future,” says John Ludwig, a partner in the firm and its founder.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

Although the campaign takes the “long approach” to retirement saving, it aligns with the ethos of LHD: “Do the right thing.”

“Just because a group may not be in a position to immediately start saving for retirement does not mean that it’s unworthy of our help,” says Ludwig.

So far, feedback from this campaign has been positive, and employees have been using the advice to improve their financial situations.

It all goes back to the organization’s mission to build trust with participants. Years after the financial crisis, the retirement industry is still struggling to gain people’s trust, Ludwig says.

For that reason, LHD conducts its own financial wellness and education campaigns. None of its educational meetings are outsourced to third-party vendors, and participants are encouraged to ask LHD advisers questions directly. The team wants plan sponsor clients to feel like they are affiliated with LHD itself, rather than with a third-party recordkeeper.

“By being the singular resource for plan participants, we’re able to build trust over a long relationship,” Ludwig says. “Our hands-on approach to employee education aims to drive participation and deferral rates higher on the plans we advise.”

LHD advisers strive to make meetings fun and high-energy, and they also present the information in a way that participants can apply to their daily lives. By engaging participants, the LHD team says they can gain insight into their thought processes and use this information to inform committee decisions and build strategies that can improve plans. Although plan design and investment selection play a big role in helping participants with retirement readiness, nothing beats financial wellness for improving people’s overall financial picture, he says.

When it comes to plan design, though, the LHD team believes in adding automatic features to fight participant inertia.

“Auto-enrollment, auto-escalation and re-sweeps can have immediate benefits for benchmarking statistics,” Ludwig says.

Team members also believe in designing match strategies that can help increase participant contributions, and encouraging plans to simplify their investment menus. An investment menu that is too complicated or has too many options can intimidate employees and result in improper asset allocation. LHD suggests reducing the number in a plan to around 10 core options, with a target-date fund (TDF).

LHD benchmarks fees annually but will do it more frequently if the demographics or the needs of the plan change. In addition, every three to five years, the company performs a blind bidding process for every plan, in that way getting vendors’ real prices for different levels of service.

One of LHD’s biggest pieces of advice to clients is that they must empower their participants to create their own retirement outcomes. The LHD team members say the same rings true for themselves; at LHD, each employee takes ownership of his work and makes it his duty to lead plans and participants to successful retirement outcomes.

“At the end of the day, a plan sponsor can have the perfect retirement plan, but if participants are not utilizing it correctly or effectively, it’s a wasted investment,” Ludwig says. —Corie Hengst

«