Practice Management June 10, 2019

Sourcing Advisory Talent in Unexpected Places

Advisory firms and recordkeepers are finding talent in the hospitality industry and among the ranks of the recently retired.
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Art by Andrea D’Aquino


During a recent discussion with PLANADIVSER on the future of the retirement plan recordkeeping business, Kevin Barry, president of workplace investing for Fidelity, also took time to talk about his firm’s hiring practices, and how these have shifted over time.

According to Barry, who oversees the hiring and management of thousands of employees within the workplace investing business, Fidelity has had a lot of success recently hiring talent out of the hospitality industry, particularly those with experience working in restaurants and hotels.

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“As such a large provider, we hire thousands of people over time, and we look very closely at what practices correlate with success in our business,” Barry says. “You may or may not be surprised to hear that, for example, recent college graduates with finance or accounting degrees aren’t necessarily the most successful group of new hires right off the bat. On the other hand, there are other industries out there that employ a lot of people who come in and seem to have the natural customer service capabilities we are looking for.”

Barry says this “customer service gene” is, generally speaking, pretty easy to spot when a job candidate walks in the door—and that it makes sense that people working in hospitality often have this characteristic. He notes that there are more parallels between serving a person in a restaurant or hotel setting versus serving the needs of a retirement plan investor than one might initially think. Apart from the expectation of rapid and reliable service, consumers in both fields expect to be put at ease and to feel a strong degree of trust and confidence in the services they are receiving.  

As Barry put it, a financial service firm like an advisory shop or a recordkeeper can put in place strong training programs that can help new people learn the ins-and-outs of the retirement plan business—the jargon, the complex commercial incentives and the customer expectations. However, training people to have empathy and to relate effectively to a diverse range of customers is another proposition entirely.

“You can train a lot of the financial services information, the product knowledge and all the rest. But finding somebody who is confident, conscientious and empathetic? This is much harder to train,” Barry says. “Furthermore, in the workplace investing business, we’re serving individuals in communities all across the U.S., so we also have to focus on having a diverse and inclusive culture. Our clients come from all walks of life, and we have to reflect that. We think about that in the hiring process.”

James Marshall, president of Spectrum Investment Advisors, is another retirement industry executive who has embraced the maxim of hiring talent that reflects the clientele. In his firm’s case, given that many of the thousands of plan participants the firm serves are nearing retirement, this effort has involved the hiring of a team of “retirement coaches.” These coaches are all former financial professionals who have themselves been retired for some time, and who have decided that they wanted to return to working in the field on a part-time basis in order to stay engaged and share their firsthand expertise about living and investing in retirement.

“Spectrum Investment Advisors has been using retirement coaches for more than 13 years at this point,” Marshall says. “We have been doing one-on-ones and financial wellness in that whole time, and our retirement coaches have led that effort. Over the years, we went from one retirement coach to now having eight coaches and a full-time retirement coach manager.”

Marshall explains that the coaches are all part time, and what he looks for in potential talent is “a passion and a desire—not a need—to be a coach.”

“Our philosophy is that, if our coaches are not successful themselves, how can they provide sound investment advice about what it is going to take to be successful?” Marshall explains. “These are people who have retired for a year or maybe two, and they are asking, ‘What’s next?’ We actually have people requesting to work as coaches, and we now have a waiting list of people who would like to be a retirement coach.”

One distinction from Barry’s commentary on this topic is that Marshall’s firm is targeting people with well-developed investment expertise and firsthand knowledge of retirement. He says this is because retirees and near-retirees are hungry for guidance from people who have direct experience in the phase of life they are about to enter.  

“What hasn’t worked as well as we expected was hiring HR [human resources] directors as coaches,” Marshall noted. “We thought they might make good retirement coaches, and I’m sure some can be, but we found they know HR better than the investment industry, given their backgrounds. They weren’t able to inspire as much confidence I don’t think.”

Marshall offers one warning to advisory firms thinking about institute a retirement coach model similar to Spectrum’s.

“On the question of how to time the hiring of this talent, it’s not easy,” Marshall says. “You can’t just go out tomorrow and hire a retirement coach and expect it to be a great success without having a strong plan in place. We have five relationship managers in our company who are getting involved in planning and executing the one-on-one meetings. We have a full-time retirement coach manager overseeing the part-time coaches. It’s taken a long time to build this system. It’s going to take a year or two before a new coach really gets it down. You can’t just pull an ex-CPA [certified public accountant] off the street and expect them to fit into your culture or to understand your processes, style and so forth. They just have to love investing and working with people. Otherwise, it’s not going to work.”

Client Service June 6, 2019

Learning the Medicare Alphabet Is a Must for Modern Advisers

Do you know the difference between Medicare Parts A and B? What About Parts C and D?
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Art by Christian Northeast


Since 2011, the amount of savings Medicare beneficiaries are projected to need to cover program premiums, deductibles, and certain other health expenses in retirement has risen as much as 11% for some Medicare beneficiaries, according to a recent study by the Employee Benefit Research Institute (EBRI).  

At the same time, the figure has actually fallen by a similar amount for others, according to EBRI’s estimates. These diverging figures are derived from the fact that individual workers qualify for and apply for Medicare programs differently, depending on a host of factors such as income and claiming age. Across the board, however, supplemental savings are needed to pay for such things as premiums for Medicare Parts B and D, premiums for Medigap Plan F, and out-of-pocket spending for outpatient prescription drugs.

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According to Christopher Ciano, senior vice president for Aetna Medicare, uncertainty about Medicare costs leaves workers and retirement savers wondering about just how much retirement healthcare they will need to pay for out of pocket, versus what they can expect to be covered by federal benefits. For this reason, Ciano says, Medicare information should fit into an adviser’s longer-term financial strategies for their clients.

Ciano says a client’s choice of Medicare coverage can help them save money in various ways. The following are some of the basic factors/goals advisers should consider:

  • Protecting clients from out-of-pocket costs. If a client participates in a Medicare Advantage (Part C) plan, they have what is called a maximum out-of-pocket, which can limit the expenses they pay each year for medical services. Other cost-saving options are Medicare Supplement plans (or Medigaps), which, for a monthly premium, cover a portion of health care costs not covered by Original Medicare, including deductibles and coinsurance payments.
  • Ensuring the benefits best meets an individual’s needs. If a client chooses to enroll in a Medicare Advantage plan, be sure they leverage the additional benefits these plans may offer. For example, if they are healthy and active, selecting a plan that offers a gym membership can help them save money.  
  • Paying attention to Part D: Prescription drugs are not covered under Original Medicare and can be a significant out-of-pocket expense. While many Medicare Advantage (Part C) plans include prescription drug coverage (Part D), it can also be purchased as an addition to Original Medicare.

James Marshall, president of Spectrum Investment Advisors, echoes those points. He says his firm has had strong success in building client rapport though broad discussions of Medicare and Social Security. Expertise in this area is rare even among expert retirement advisers, he notes, so the firm regularly brings in outside speakers to its office and hosts town-hall style meetings where clients of the firm can dive into the weeds and ask their pressing questions about Medicare.  

“We have speakers coming in later this month, in fact, to talk in the open town hall settings about Social Security and Medicare, and we will be discussing in particular whether a client should have a Medicare Supplement plan or should buy Medicare Advantage,” Marshall explains. “We are a big proponent of having all of our participants thinking about their finances in a holistic way that goes beyond just the 401(k).”

According to Marshall, these town hall meetings on topics such as Social Security or Medicare are always standing-room only.

“Our clients tell us all the time how much they value this type of service, and so we also put out summaries of what our speakers say,” Marshall explains. “We turn around and put this information out digitally to more than 23,000 participants. They tell us that it makes our practice stand out, people walk away from these sessions saying ‘Wow.’”

Learning the Medicare Alphabet Is a Good Start  

Aetna’s website hosts a wealth of Medicare claiming information that can help advisers and their clients get up to speed on the most important factors to consider.

One downloadable chart, for example, clearly spells out the Medicare alphabet and cross-references which programs cover what. As the chart explains, Medicare Parts A and B, also called Original Medicare, can be thought of as the core coverage programs. Part A covers services for hospital stays and similar inpatient procedures, while Part B includes coverage for doctor visits and other procedures that don’t require an overnight stay in the hospital.

Part C, also called Medicare Advantage, is made up of plans approved by Medicare. As Aetna’s resources explain, private insurance companies provide and service these plans. Medicare Advantage plans usually include a network of health care providers. Some require clients to use their network of providers while others allow them to go out-of-network, usually for a higher cost.

Part D, finally, is the part of Medicare that provides prescription drug benefits, while Medicare Supplement plans are offered by private insurance companies, which provide plans that work in tandem with Original Medicare.

Another Aetna publication steps through five questions an adviser can ask clients to help them start to identify a claiming strategy across the Medicare alphabet. These questions are, “What do extra benefits, such as vision, dental and hearing coverage, have to do with reaching my health goals? Do I want the flexibility to see any doctor? Do I plan to travel outside the United States? Do I need prescription drug coverage if I’m not taking a lot of medication? Do I want to juggle multiple Medicare plans?”

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