Business at a Glance as of 12/31/22

• Plan assets under advisement: $1.1 billion
• Median plan size (in assets): $6 million
• Plans under administration: 198
• Total participants served: 17,000

PLANADVISER: How is your team/process/structure unique? How has it evolved? Where will you be in five years?

Cochrane: Locally we are a small team of seven employees, with five advisers, one support staff and one educational consultant. We are also part of a Mid-Atlantic team of top advisers at HUB, as well as part of a global organization. Each adviser has a book of business, but Kim Cochrane also serves in an organizational management position in which she is responsible for relationship management and business improvements. We are, collectively, a diverse practice, and we collaborate with other members in the Mid-Atlantic team to embrace each of our specialties to serve our clients. We have grown from a single adviser who was brought into the retirement business as an offshoot of a large group benefits practice into a practice that focuses on clients of all size, but with a hyper-focus on nonprofit organizations. In five years, exponential growth is expected. HUB International has multiple lines of business, with more than 2 million clients as of December 2021. This opportunity and encouragement for cross-selling is a focus of the company.

PLANADVISER: As a retirement plan adviser, what do you take the most pride in?

Cochrane: The greatest pride comes from working with employees and being able to provide solutions tailored to where they are, not where we think they should be. When you can have a conversation and the employee relays how great it was that they were able to talk to you and that you truly helped them, that is a gift. We work with many employees who may be lower-paid but who need to have a plan to accumulate wealth for their future. These employees often tell us they want to build generational wealth in their family that has never existed before. We want to be the driving force behind helping them reach their goals.

PLANADVISER: How do you grow your business? What changes to your practice or service model are you planning for 2023 or 2024?

Cochrane: We participate in many local associations and networking groups, where we are able to form strong alliances. In addition, as part of a business insurance and group benefits practice, we are often referred into existing clients. This is especially true when it comes to start-up nonprofit groups. Kim Cochrane and Eduardo Gimenez are adjunct professors for The Plan Sponsor University and hold sessions twice a year for plan sponsors. For 2023 and 2024, we expect to participate more by sitting on association boards and by being more active in our community.

PLANADVISER: What challenges do you think the retirement plan industry faces and what role do you have in addressing and confronting those challenges?

Cochrane: The retirement plan industry gets more and more complex every year with the regulatory changes. In addition, the consolidation of recordkeepers is concerning. Recordkeepers used to have very qualified employees who could answer clients’ complex questions, but we have found that those employees are no longer employed there. The consultation and educational side of the business has now shifted to the advisers. With fee compression hitting all sides of the business, we have to rely on tech and seamless solutions to be able to provide a higher level of service for the same or lower fees.

We implemented many of the tech options made available during the COVID-19 pandemic, including one-on one sessions with employees and plan sponsors using Teams or Zoom that could be arranged via a calendar link. This frees up our time with scheduling issues and allows us to reach not only the employee, but also their family, since many employees are still working from home.

Utilizing managed accounts, when appropriate, and 3(38) lineups has streamlined our workload so we can grow without a loss to service.

PLANADVISER: Why do you feel that retirement plan advisers should get involved in the expansion of the DC retirement plan system to cover more types of employers and employees?

Cochrane: There is a need for all employees and employers to have access to a retirement plan that is easy to administer and competitively priced. As for the breadth of the problem, those without access to a workplace plan stand at 46% of private sector workers, or 57.3 million of an estimated total of 124.6 private sector employees, according to Georgetown University’s Center for Retirement Initiatives study. The study also noted that this gap is “inequitably distributed,” with greater gaps found in the small business sector and among workers with lower incomes, younger workers, members of a minority group and women. We have to do better as an industry.

This is also an opportunity for advisers to find a solution to work with these new and smaller employers, since there is huge potential as well. By providing a retirement plan to small employers, advisers can build tremendous revenue.

PLANADVISER: What are the biggest challenges preventing the broader delivery of tax-advantaged retirement savings opportunities in the workplace, and how might these be solved?

Cochrane: Cost is the biggest challenge for employers to start a retirement plan. In addition, they may not have staff equipped to handle the administration or have knowledge of what is needed to maintain the plan. The tax credits will surely help, as well as the relaxation of testing for starter 401(k)s. By providing 3(16) solutions, we can work toward reducing the workload for these clients, as well as offering fiduciary 3(38) services to reduce the investment risk to the clients.

The latest Secure 2.0 Act left out nonprofit employers from the tax credits, as they do not pay federal taxes. This needs to change! We have spoken to our senators and representatives, as well as industry people, like Brian Graff, to address this oversight. My hopes are that a solution is found to be able to offer payroll tax offset to make it equitable.