2012 PLANSPONSOR Retirement Plan Adviser of the Year

Before 401k Advisors LLC, Hilbrant spent 21 years at Principal Financial Group, as vice president of sales in Chicago. He was responsible for new-plan sales and employee education efforts for 1,200-plus defined benefit (DB) and defined contribution (DC) plans.

Hilbrant and the other founders of 401k Advisors USA all had experience working with the biggest consulting firms in the industry and anticipated that small to mid-sized plans would someday have the same fiduciary concerns as plans at the $1 billion level. “That was really the genesis of the whole thing,” he says. “We felt we had a good opportunity to build businesses in our local regions.”

Although starting a business was tough, Hilbrant says his firm—which specializes in 401(k), defined benefit and nonqualified retirement plans—had appeal because of its client service model. Clients enjoy having a one-person contact responsible for creating reports, directing employee meetings, being accessible to the work force and serving as an adjunct to human resources, he says.

“Our business model is built around face-to-face. I’m going to be the person here at every quarterly meeting. I’m going to educate. I’m going to answer a question anytime on my cell,” he says.

That one-on-one approach to client service gave Hilbrant’s business the edge it needed to get some traction. After all, the new firm was competing with companies in Chicago that had been around for many years.

“To compete against that existing service model was a huge challenge,” he says, adding that his company’s unique focus on 401(k) during that time was one thing that helped differentiate it from other firms. “I’m thrilled doing what I’m doing and [about] how I got started. How I got here, that was quite a challenge.”

Today, Hilbrant’s firm advises 42 plans, with a median plan size of $20 million and five-year average client tenure. Although he targets plans with assets between $10 million and $50 million, his client base includes sponsors outside that range; the largest plan has $400 million in assets.

In the future, Hilbrant plans to add four or five clients each year, which, he says, is a manageable number for maintaining personal relationships. “I look at each [client] as a new friendship, a new relationship, a new partnership.”

The firm has four advisers, one wealth manager and four support staff, and though he has no current plans to grow personnel, Hilbrant says he is open to adding advisers and expanding the support team in the coming years, as needed.

The core of Hilbrant’s passion for this industry is helping the average worker retire. Hilbrant’s father was a lineman for a rural electric association in Iowa. When his father passed away from pancreatic cancer in 1988, Hilbrant says he was struck by the ramifications of working your entire life and having no pension or 401(k) assets.

“There are lots of people in this country who have this sort of scenario, and there are ways to change that,” he says. “So my passion is really to [help] the average ­working-class person.” His firm meets with an estimated 75% of its plan participants and offers educational group seminars and one-on-one meetings.

Hilbrant educates beyond 401(k), providing guidance on how to manage personal debt and expenses; after all, he says, these are connected. Still, “the most important thing for ­participants to ­understand is the connection between what they are deferring and what that will represent for them in the 20 to 30 years they will be living in retirement,” he says. “People need to get that connection, and it starts with a real understanding of how those calculations are done and what those calculations mean.”

Because many people know the percentage of each paycheck they are saving for retirement but are uneducated about how that savings will translate into a source of ­income later, “We are trying to bridge that gap,” he says, “[to] give people a real track to march on.”

As you raise the needle on ­retirement confidence, Hilbrant says, workplace productivity and attitudes also improve. “So it has real profit benefits for corporate America.”

Hilbrant says 401k Advisors LLC will continue to ­increase its focus on retirement readiness. In fact, he says the firm has a full-time director of retirement readiness, who gathers data for clients, such as the percentage of their ­employees who will be ready to retire “in X number of years” or which demographics are least prepared for retirement.

As for advising his plan sponsor clients, Hilbrant conducts quarterly in-person meetings with them, and his firm documents and archives each piece of the retirement plan. “As an adviser, you have to go to those meetings prepared to bring value to the conversation,” Hilbrant says. That may include explaining options and performance, making action plans, and having studies and research on hand. He likens it to building a court case with evidence.

“Employers appreciate you coming and teaching them something they didn’t know,” he says. “The educational piece of what we do is a huge component of our service model.”

Hilbrant describes his firm’s investment approach as “unique,” because it provides investment metrics for funds the clients currently use, as well as for other, possibly more suitable funds they do not­—but could—use. Although such funds may very well exist, he says, some advisers neglect to inform the client if their current fund performs sufficiently.

 As part of a plan to increase technological efficiencies, Hilbrant’s firm uses iPads for reports; this spares paper, and clients can access the reports electronically.

The firm also offers a cloud-based fiduciary vault for its clients, which archives 30 different aspects of retirement plan oversight, such as summary plan descriptions, quarterly reports, meeting minutes and investment policy statements. Through this system, clients gain convenient access to this information, a benefit they particularly appreciate—especially when audited or facing legal challenges.

Hilbrant says his firm often found that new clients had previously lacked an organized system for this information, storing it in multiple file drawers. Many advisers retain just the investment report, he explains, and do not keep track of fiduciary governance information because they assume their clients have it.

In addition, the Web-based archive system provides a new level of efficiency “instead of just filling up binder after binder with paper,” he says.

When asked what is next for 401k Advisors, Hilbrant says he foresees working with more defined benefit plans—his firm currently advises four of them. He says he is a big believer in these plans, because they are the best way to help participants get to retirement, properly prepared.

In his own words… 

What about this business are you most passionate about? 

Stace Hilbrant: I’m passionate about all members of this firm having a real impact on the level of confidence in preparing for retirement and making steady improvements in the retirement readiness of thousands of our clients’ plan participants.

What has been your biggest obstacle? 

Hilbrant: Finding plan sponsors who care enough about some of the mundane and “not so interesting” topics—such as fiduciary governance and participant retirement-readiness issues—to consider changing what have been sometimes long-term broker/adviser relationships that aren’t up-to-date or that have service models that don’t work for today’s 401(k) plan market. Sometimes these relationships are more important to some executives than are their own personal fiduciary liability concerns.

If you were to speak to a qualified plan sponsor prospect today, what one question would you ask to initiate the opportunity? 

Hilbrant: “What has been the best 401(k)-related decision you’ve made in the past few years?”

What do you expect from your plan sponsor clients? What do you expect from your 401(k) plan providers? 

Hilbrant: From my clients, I expect honest and open dialogue. If there is some service we’re not offering, or if any component of our service model is not operating as expected, let’s openly and honestly discuss it and find a quick solution.

From vendor partners, we expect them to work as hard as we do to meet the clients’ expectations and to always feel free to share any and all information that can help make the plan better for everyone involved.

What is the hardest lesson you had to learn about working with retirement plans—and how did you learn it? 

Hilbrant: A huge and very important lesson, I learned when I was a vendor rep, before becoming an adviser: Sometimes businesspeople do not tell you the truth about potentially using your services and your firm or about how satisfied they are with their current adviser/vendor or the possibility of changing service providers, etcetera.

With regard to your practice, what would you spend more time doing, if you could? 

Hilbrant: I love pursuing new client relationships, prospecting and the like. I am passionate about talking to plan sponsors about how to make their plans better and discussing industry best practices for helping their participants become better prepared for retirement.

What is the one thing you hope your competition never figures out? 

Hilbrant: That with the right people and the right attitudes, they could be doing the same things we do to obtain and retain new client relationships.

Where are the biggest opportunities for business expansion in the future? 

Hilbrant: I would love to add a few new advisers who could focus our service model on the under-$5 million marketplace, which I feel is underserved at this moment. I would also like to find ways to get more prospecting time in the larger ($100-plus million) marketplace.

 Retirement Plan Adviser of the Year Judges 

Steff Chalk, CEO, Fiduciary Consulting and Governance Group Inc.

Alison Cooke Mintzer, global editor-in-chief, PLANSPONSOR and PLANADVISER 

Rick Wedge, Northgate Benefits, 2010 PLANSPONSOR Retirement Plan Adviser of the Year

James Worrell, GPS Investment Advisors, 2011 PLANSPONSOR Retirement Plan Adviser of the Year