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Business at a Glance as of 12/31/23
- Location: Northbrook, Illinois
- How many plan assets do you have under advisement? $568M
- What is your median plan size (in assets)? $6,8M
- How many plans do you have under administration? 30
- How many participants in total do you serve? 6,978
- Parent firm: N/A
PLANADVISER: How do you grow your business? What changes to your practice or service model are you planning for 2024?
Bjork: Our growth has historically been fueled by a mix of traditional channels such as centers of influence and client referrals. Heading into 2024, launching in-house financial planning and wealth management services, which we began laying the groundwork for in 2022, is expected to be a significant growth driver for our practice and the demand we’re seeing from both plan sponsors and participants has validated the strategic shift toward including these offerings.
This pivot was largely inspired by the heightened need for personalized financial guidance both in the plan and beyond as observed during virtual interactions with participants in early 2020. Recognizing the urgency for financial resiliency and support beyond the workplace retirement plan, we began rethinking our service model to address these gaps in a fee efficient and scalable way to serve participants over a wide range of incomes and needs.
As a fiduciary and steward to our plan sponsor clients we take the responsibility of educating their team members as a personal mission, and our goal is to do so with no pitch or product fueling the shift toward participant services.
Our aim for 2024 is not just to grow, but to do so responsibly, by empowering participants with the tools and knowledge they need for financial resilience, without compromising on the integrity of the advice being given and to grow our practice by enhancing our clients’ financial security.
PLANADVISER: Are you connected to a wealth management division? If so, please explain how you work for them and your goals for coordination. If not, please explain whether you plan to be in the future, or not, and why.
Bjork: 100% Yes! And if you had asked this question 5 years ago the answer would have been “100% No!”
During the initial stages of the pandemic, we began holding office hours and offering one-on-one video sessions with plan participants which dramatically changed the trajectory of our practice.
Our model previously focused almost entirely on the plan committee with an emphasis on auto-features and periodic employee meetings, coordinating the annual lunch and learn or provider led education campaign, etc. The one-on-one meetings we had with participants during those very uncertain times made us realize it was time to step up and broaden the scope of how we’re able to support plan participants with their financial goals. To do so we spent all of 2022 and much of 2023 ramping up our onsite and virtual communications with participants to learn about their needs and goals and build the right model.
Further, when we began having these interactions and discussing planning and wealth management needs beyond the plan with participants, we learned more about what’s out there in the market today and to say the average American worker is underserved and overcharged would be the understatement of the century, which only strengthened our resolve to build a practice which could serve a wide range of client needs.
PLANADVISER: What challenges do you think the retirement plan industry faces, and what role do you have in addressing and confronting those challenges?
Bjork: The retirement plan industry is at a crossroads; our nation’s retirement savings system continues to evolve and serve millions of American workers effectively, but also leaves many behind. As retirement plan advisers I see our role as helping confront the challenge of equitable financial resiliency for American workers and to transition our industry from focusing nearly exclusively on already affluent individuals and adopt an approach that supports the average American worker in achieving financial stability, growth and their own version of financial freedom. Thankfully, lawmakers have given us tools like emergency savings vehicles, and now it’s up to us to use them effectively.
As leaders in our industry, we can continue to champion transparency, scalability and value in the workplace and individual solutions we offer. With the evolution of more scalable advice solutions, multiple employer plan structures, etc., this does not necessarily mean doing so must be a purely benevolent exercise. The economics have to support and compliment the mission for the model to be sustainable and it’s up to us as advisers to be open to new ways of doing business so we can bring our services to a greater portion of the American population. If we collectively focus on innovating ways to empower the average American worker to meet their financial goals, not just in retirement, but throughout their financial journey, we’ll be on the right path.
PLANADVISER: Why do you feel it is important to work individually with plan participants?
Bjork: Personal engagement and connection with plan participants is pivotal because it transforms the often-abstract financial concepts we’re communicating into tangible, individual action plans.
The need for this connection is illustrated by the fact that despite a wealth of online resources, engagement rates often linger in the 1%-2% range for self-service “tools” and guidance which suggests that the current model, while information-rich, lacks the personal touch and connection necessary to create awareness and nudge the average American worker toward action.
To effectively move the needle for plan participants we need to understand their story as an individual, which means we need to create that connection and then listen. If we do this with empathy and humility, we can create the trust and confidence it takes for the American worker to tackle financial decisions they might not otherwise address.
By way of example, when participants miss scheduled one-on-one sessions, I interpret this not as a lack of interest, but as an opportunity to reach out and offer a customized action plan based on their pre-session questionnaire. Often, we find it’s because the individual was embarrassed, didn’t want to talk about a certain topic or “sound stupid.” By being proactive and empathetic in this situation we’re able to connect with those who can potentially benefit the most from our guidance but were hesitant to engage. If we can demystify financial planning, encourage participation in workplace plans and serve all those who are seeking guidance regardless of their income level then we’re doing it right.
PLANADVISER: What are three of the biggest challenges that plan participants face today? How are you helping to address them?
Bjork: Plan participants today face a trifecta of challenges: financial resilience, the complexity of navigating their workplace savings plan and the competing priorities for their financial resources.
Financial resilience—or a lack thereof, is easy to attribute to a lack of preparation and information. In practice, we’ve found that it’s more complex with sophisticated high earners often struggling with the same challenges faced by lower income workers. If we summarized all of the top 10 reasons participants connect with us and the challenges they are looking to solve, it can be distilled into two questions: How do I get a handle on today’s money and am I on track for tomorrow’s needs? If we can help answer those two questions and create a world where a modest amount of emergency savings allows a plan participant to cover a car repair or broken dishwasher without putting it on a credit card, then we’re moving the needle. By including budgeting and debt paydown strategies into our new hire and foundational education messages we can begin to create awareness around topics that might otherwise feel insurmountable.
Secondly, a recent Buck survey showed 39% of employees don’t know if they’re saving enough to get the full match. That is on us as an industry and our plan sponsor clients to do better. By rolling out one-too-many video solutions and engaging live and onsite we’re beginning to demystify the workplace plan offering clear, simple, and tailored guidance that aligns with the individuals’ goals and empowers them to make informed decisions.
Lastly, saving for retirement requires a long-term mindset and the ability to juggle near-term financial priorities. By taking a holistic approach and working with participants both individually and at scale we focus on tuning out the near-term noise, finding balance in their current financial obligations and focus in on the long-term mindset needed to achieve their retirement savings and other important financial goals.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advisory services offered through Global Retirement Partners, LLC, a registered investment advisor. Global Retirement Partners, LLC and Bjork Asset Management are separate entities from LPL Financial.