PA: What have you done in the past year to improve participants’ retirement readiness?

Improving the retirement readiness of my clients’ employees is a collaborative process, partnering with the plan sponsor and their provider. We work to develop the correct education program and curriculum each year. The goal is to provide their hardworking employees the best chance of a successful retirement, meaning they can retire on time, while meeting their retirement objectives.

I oversee and monitor the delivery of the provider’s services to ensure our established goals are being met. Often it is necessary for me to supplement the provider education programs, to achieve the best outcomes. I regularly present to groups of employees and meet with new employees, to increase their understanding and appreciation of the retirement plan benefit. Ultimately, I have found success in these scenarios is largely dependent and driven by plan design.

For a number of our clients, I provide financial wellness and employee advice as a fiduciary. Our employee advice complements their provider’s efforts, focusing on the specific needs of each plan participant. These needs are initially addressed during our first round of group meetings and individual advisory sessions.

Our team then conducts individual advice sessions, using a tablet-based retirement gap analysis program, to determine savings goals and appropriate asset allocation. This allows us to fully consider each individual’s strategy, based on their unique circumstances. Typically, our advice is implemented immediately by accessing the provider’s employee portal. We find this type of individualized advice, coupled with immediate changes, is exactly what most participants are looking for.

PA: Describe any particularly initiatives you have led with your customer base in the past 72 months (investment or education or plan design or communication) or any plans for the next 72 months.

Each year, we summarize the action items completed and documented in the minutes from our quarterly meetings. We are always astonished to see how much has been accomplished by our clients. During the client onboarding process, there are several initiatives we address. No matter the plan size, one item that is regularly at the top of the list is reevaluating the qualified default investment alternative (QDIA).

We begin our process by requesting the plan’s underlying demographic information from the provider, which we analyze to determine how the QDIA is being utilized. For instance, we consider: the age of the workforce, the distribution behavior at retirement, the distribution options allowed under the plan, savings rates, average account balances by age bands, the number of participants who are retired or nearing retirement, and who is using the target-date funds (TDFs). We share our findings with the plan sponsor to provide a sense of what the population and usage looks like today, as well as how it may change over the next ten years. Using this analysis as our foundation, we begin the philosophical discussion of “to” versus “through,” considering the plan’s past experience, as well as best practices and trends we are currently seeing. I review the funds’ varying glide paths, separating each vintage year into buckets of conservative, moderate, or aggressive. We discuss active, hybrid, and passive investment strategies, including the pros and cons of each. Then, I review investment vehicle type, focusing primarily on mutual funds and collective investment trusts (CITs). Additionally, we make sure the client is aware of custom solutions and managed accounts. Lastly, we explore the costs associated with each option and explain why there are differences in fees.

Other initiatives we have paid special attention to over the last 12 months include: completing fiduciary training for all new client committees and new committee members; reviewing committee charters and updating investment policy statements; considering fee policy by answering how and by whom fees will be paid (i.e., per head versus asset based, fee leveling, zero revenue share, lowest net cost, rebating etc.); exploring 3(38) as an option to save time, manage risk, and improve results; and implementing financial wellness and employee advice programs.

PA: As a retirement plan adviser, what do you take the most pride in?

It has never been harder to be a plan sponsor, and multiple generations are now directly responsible for their own retirement savings. I feel very fortunate to be in a position where I can wake up every day and know I can make a difference in the lives of my clients, colleagues, and the people in my community. I did not always wake up feeling this way. Eighteen months into becoming a plan adviser, with two clients to service and the proverbial runway disappearing in front of me, I questioned if I had the grit to be successful in this field. I continued to pick up the phone, day in and day out, meeting with anyone willing to start a conversation with me. The emotional rollercoaster of starting a business was getting the best of me, but failure to launch was not an option. I had reached my tipping point; the “three feet from gold” moment. If I had given in to my fear and walked away, I would not have realized in six months’ time, I would have seven clients and on my way to become a shareholder at my firm. Although my first two clients have since been acquired, I will always be grateful to those plan sponsors that trusted me early on.

Today, I do not take it lightly that I am in a positon to affect positive change for hard working Americans—many of whom I may never meet—through the decisions made by committees and boards with which I work. However, the best part of the job, the part which I take the most satisfaction in, is when I sit down with an employee and help him or her realize their vision of retirement is possible.

I have also found myself feeling a sense of accomplishment leaving committee meetings where I was able to simplify a very complex and technical aspect of the plan, empowering the committee to make an informed decision that benefits their entire employee base. Seeing committee members have an “aha moment” and making changes that benefit so many, whether it is fee equity, retiree-friendly distribution options, or reductions in total plan costs – is another source of gratification.

PA: What are the most important issues that your plan sponsors face with their company retirement plan, and what specific actions do you take to assist them in overcoming those issues?

The fiduciary landscape has changed rapidly, with new legislation and market conditions placing increased scrutiny on defined contribution programs. Some select trends I have observed and which I believe will continue to have a significant impact on plans in the years to come are: fees and payment structures, fiduciary regulation, increased use of collective investment trusts (CITs), and the decumulation strategy.

From a regulatory perspective, it is critical for plan sponsors to  understand, benchmark, and document the fees they are paying for plan administration and investment management, as well as making this information  transparent  to participants through 404(a)(5) disclosures. I have worked with all of my clients to evaluate their fees, and together we determine the methodology for payment of fees for each specific client. We then continue to monitor the fee structures and reasonableness of fees, by regularly benchmarking and conducting RFI and RFP projects, as part our normal ongoing process.

The Department of Labor’s “fiduciary rule” is in effect; however, its implementation and enforcement has been delayed until July 2019. With the many fiduciary breach cases I could reference, litigation’s next chapter could very well be enforcement of the rule, pending any changes, of course. Regardless, plan sponsors are required to monitor their service providers and the delivery of investment advice to employees by these providers. We think they will need help navigating this complex job. As such, we are implementing a process that assists plan sponsors in their duty to monitor and supervise provider participant advice programs operating under the Best Interest Contract Exemption.

For plans that meet certain size requirements, some fund companies or financial service firms are adding CITs that mirror their mutual fund options. These CITs can be offered at lower investment costs. However, since the CITs do not trade under a ticker, information on their make-up, performance, and objectives can be harder to ascertain. Although historically, stable value funds have been created using CITs, we are seeing a trend toward using these vehicles for indexing, as well as target date funds. I will continue to work with my clients to educate them on the benefits – and potential challenges – of using CITs for mandates within plans that meet asset thresholds.

As our country experiences an increasing amount of retirees leaving the workforce, plan sponsors will likely look to advisers to assist as these individuals begin the next phase of their lives. We are currently working with our clients to create retiree friendly plan designs and distributions options, as well as personalized advice. Our team has been conducting due diligence on retirement income products for many years now and while adoption rates have been low, we believe plan sponsors are concerned about and will address this issue in the years to come.

PA: How do you grow your business? What changes to your practice or service model are you planning for 2018?

The industry is constantly evolving with regulatory changes, product innovation, and advancing technology. At CAPTRUST, we work together as one unified practice, growing our businesses and lifting each other along the way. This culture and collaborative effort provides me several competitive advantages in growing my business. Reinvestment and development in the areas of discretion, financial wellness, employee advice, technology, and deep expertise in defined benefit and executive compensation programs, allow me to grow my business without expanding my geography or target market. The areas I plan to focus on in 2018 are 1) discretion and 2) employee advice and financial wellness.

Business at a Glance

How many plan assets do you have under advisement? $6,338,625,813

What is your median plan size (in assets)? $83,383,611

How many plans do you have under administration? 25 clients representing 41 plans

How many participants in total do you serve? 67,090