Client Service October 2, 2018

PANC 2018: The Value of an Adviser—Plan Sponsors Tell All

Sponsors expect their advisers to be proactive and to push their plans to the next level.

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“The conversations we have with our retirement plan adviser are always about getting the plan to a better place,” said Joanna Farrere, senior vice president, human resources and administrative services at the Illinois Health and Hospital Association.

Farrere was speaking on “The Value of an Adviser—Plan Sponsors Tell All” panel at the 2018 PLANADVISER National Conference. She was invited to speak, as the Illinois Health and Hospital Association was selected as the 2018 Plan Sponsor of the Year in the non-profit defined contribution category for plans with less than $100 million in assets.

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Heather Masterson, human resources director at Hendrick Motorsports, which also won 2018 Plan Sponsor of the Year, in the corporate $50 million to $100 million category, said she is constantly receiving solicitation calls from recordkeepers and advisers. “There is a tremendous amount of interest in doing business with us,” she said. “We are constantly receiving requests to connect on LinkedIn. It can be overwhelming at times.”

Asked whether she would consider those solicitations, Masterson said, “It is all about the personality. If they make a concerted effort to know the plan or to tell me they can offer a second set of eyes to examine it,” she will consider hearing them out. “It is all about building a relationship with us.”

Farrere agreed: “Do they know who they are calling and have they reviewed all the publicly available information? Are they offering to provide me valuable information, such as a white paper they have produced, or to tell me about a new regulation that was passed?”

As to what Farrere expects from her retirement plan adviser, it is to be “a trusted source, really pushing me forward to think about new strategies and to keep our team—the recordkeeper, the committee and the auditor on the plan—together. We have weekly conversations with them about what we should be doing.”

In the case of Hendrick Motorsports, the retirement plan adviser is not the point person but part of the recordkeeper and committee team, Masterson said. “The adviser complements me very well and is extremely knowledgeable about leading trends, such as 90/10/90 [90% participation, 10% deferral rate and 90% of participants invested in a target-date fund or other balanced fund]. Our committee is asking us what we can do next, and we rely on the adviser for that.”

Farrere agreed that insights from her adviser are very helpful. For example, the adviser works with the recordkeeper and other providers to ensure that fees are reasonable, vets new options and tells Illinois Health and Hospital Association what other clients are doing. “It helps us navigate,” she said.

Winning the 2018 Plan Sponsor of the Year award has inspired Hendrick Motorsports “to look at a broader time horizon to get things done,” Masterson said. “We now have a three-year plan, and the adviser helps us prioritize all of the things on our mind. We are a high-maintenance plan and need the adviser to be flexible and agile.”

Farrere said the Illinois Health and Hospital Association especially appreciates its adviser’s recommendation to automate enrollment and escalation. “Plan design, along with education, is very important,” she said.

Client Service October 1, 2018

PANC 2018: Understanding the Participant Mind

Obtaining data on participants from retirement readiness tools, recordkeepers and aggregation tools is important in order to tailor effective communications.

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Obtaining reliable data about participants is important to figuring out their concerns and needs, said Shannon McCarthy, senior consultant, brand leader at Nationwide, speaking on the “Understanding the Participant Mind” panel at the 2018 PLANADVISER National Conference.

“You can extrapolate data from a retirement readiness tool and pair it with third-party data,” McCarthy suggested.

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Dan Peluse, director of retirement plan services at Wintrust Wealth Management, said it is also possible to leverage recordkeeper technology, “but it will be an incomplete picture. It is better to drive them towards an aggregator.” It also helps to have one-on-one meetings with participants.

Brett Shofner, president of Work Plan Retire, said obtaining data on participants so that the adviser can tailor communications to them is key. “The lines are blurring between health care, retirement and general wellness,” Shofner said. “Participants are overwhelmed, so you need to make it simple for them. Tailor the communications to their mindset.”

Nationwide recently conducted research on workers who are eligible to participate in their retirement plan but don’t, McCarthy said. To the company’s surprise, it learned that “many people don’t understand our industry or how this benefit works.”

Peluse agreed: “Many Millennials have been automatically enrolled and still don’t know what a 401(k) is.”

Nationwide has moved many of its participant communications to social media, McCarthy said, adding the firm “continues to look for the next disrupter.”

To resonate with participants, advisers need to address what is top of mind for them, Peluse said. “Retirement planning doesn’t rank very high,” he said. Rather, workers are concerned about student debt, health savings accounts and other financial issues.

“We are expanding our practice to be a financial coach,” Peluse said. “We have a diverse participant base with different priorities. We rely on recordkeeping tools to have those conversations, to strengthen our relationships with plan sponsors and go beyond the 401(k) to discuss debt and college loans.”

Because so many workers don’t even understand what a 401(k) plan is or why it is so important to participate in it, it would help if their peers could act as everyday advocates to encourage them to participate, McCarthy said.

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