PLANADVISER: Tell us about your practice and how you and your team members got into advising retirement plans.
Pension Architects: Our firm was founded based on my original practice founded in 1980, which was a fee-based Registered Investment Adviser (RIA) and financial planning firm based in Washington, D.C. At the time, we were one of the few fee-based practices in the region that eventually became involved in designing and managing corporate retirement plans, most of which at the time were defined benefit (DB \) plans. As a planner, it became apparent that what employees desired and needed most was guidance in overall financial decisions.
When that firm was sold 15 years later, I opened Pension Architects in Los Angeles exclusively as a corporate retirement design firm with a focus (and passion) towards what we had learned in the 80’s, which was that participants needed a sincere advocate who will not only help them plan for retirement, but help with the many day-to-day financial challenges that in many cases prohibited their ability to adequate fund the retirement savings needed. This was the foundation to what has become our Financial Wellness Coaching Program
The team members that are now Pension Architects all believed that the above described process and mission was best accomplished by advising retirement plans enabling us to impact many more people than via a traditional wealth advisory practice.
PA: What is your mission statement?
Pension Architects: Our mission is to reach as many employees and in a broader sense, their spouses and families, to provide objective conflict free advocacy resulting in improved decision making that enables a higher probability of attaining a sufficient and sustainable retirement income.
PA: How is your team/process/structure unique? How has it evolved?
Pension Architects: Our team is unique in that all of us are committed to making a difference in the lives of as many people as possible by providing a relationship that truly makes a measurable difference. The evolution of this process has been a result of our commitment to reviewing behavioral and industry research and using that research to validate or alter our processes and understanding of what works.
PA: What have you done in the past year to improve participants’ retirement readiness?
Pension Architects: In the past year we have spent a great deal of time exploring/developing better technology that encourages participant engagement and longer term involvement with their coach.
PA: Describe any particularly noteworthy initiatives you have led with your customer base in the past 12 months (investment, education, plan design or communication).
Pension Architects: In the past 12 months we have focused on improving sponsors understanding of what metrics are most important to measure; what design aspects that are not being utilized such as Roth, auto enroll and escalation, and re-enrollment for example that should be evaluated or reconsidered as valuable methods to achieve maximum retirement readiness.
PA: As a retirement plan adviser, what do you take the most pride in?
Pension Architects: I take the most amount of pride in knowing that over the past 2 decades of Pension Architects efforts, we have helped over hundreds of thousands of employees and countless family members by focusing on the daily problems faced by the majority of employees. I am proud that these efforts have resulted in college savings being realized, credit being improved, debts being reduced, wills being drawn, liquidity being raised, and ultimately, all of these and other issues being attended to, resulting in being able to save enough for retirement.
PA: What benchmarks do you use to measure plan and client success? How do you react to clients or prospects who don’t share your goals for their retirement plan?
Pension Architects: While we measure the traditional plan level metrics such as participation and deferral rates, loan activity, match utilization, and participant account balances as related to income needs at retirement, we also measure less common metrics that we believe define a successful plan. These metrics are those defined by the Financial Wellness Coaching efforts and include measuring the many financial stress points that can distract and create less focused employees. When clients and prospects don’t share our goals, we use research data and peer studies to (gently) persuade them that these less common non-plan-centric objectives are worth including in the educational effort.
BUSINESS AT A GLANCE
LOCATION: Los Angeles
TOTAL PLAN ASSETS UNDER ADVISEMENT: $6 billion
MEDIAN PLAN SIZE (IN ASSETS): $28 million
TOTAL PLANS UNDER ADVISEMENT: 75