CAPTRUST Financial Advisors

According to Mike Hudson, he and Mark Medlin are acting less and less as investment advisers and, instead, now consider themselves more financial advisers or fiduciary advisers. In fact, he explains, Hudson and Medlin are not picking funds for their clients’ plans; they look to CAPTRUST’s in-house team for help with that. CAPTRUST has more than 90 employees, Hudson explains, only 25 of whom are advisers—the rest are supporting those advisers through various services.

Since the enactment of the Pension Protection Act, Hudson and Medlin have been working to implement some of the supported provisions among their client base. Currently, close to half of the team’s clients have automatic enrollment in place, and one-quarter of their clients are using auto-escalation. Although Medlin predicts that auto-escalation will increase among clients, he does not expect many more within their current client base will embrace automatic enrollment. He is cautious about how many will add the escalation options, however, noting that the costs can be prohibitively expensive; in fact, one client who is considering the feature would have to absorb a cost increase of $8 million in matching contributions, he says. A critical focus at the participant level is retirement readiness.

Most participants want to know what they can get each month in retirement; the big savings total means nothing to them, Medlin says. Participants want to know whether they get a check, for how much, and what they are supposed to do with it. A handful of plan sponsor clients already have implemented retirement income programs, Medlin says. Conceptually, adds Hudson, they like a product that leads to paycheck-type payments. Currently, the team and CAPTRUST are examining and comparing the new income funds available from a handful of providers and determining which offer the most value and flexibility to participants.