2024 RPAY – Tom Simonson, Creative Planning Retirement Services

Business at a Glance as of 12/31/23

• Location: Charlotte, North Carolina
• How many plan assets do you have under advisement? Undisclosed
• What is your median plan size (in assets)? Undisclosed
• How many plans do you have under administration? Undisclosed
• How many participants in total do you serve? Undisclosed
• Parent firm: Creative Planning LLC

PLANADVISER: Tell us about your practice and how you got into advising retirement plans.

Simonson: I started advising in 2003 after seven years as a recordkeeping wholesaler. I believed in and was excited about having a direct impact on plan sponsors and participants. There were very few specialist advisers at that time, and I focused on developing my practice and dedicating 100% of my time serving clients. My goal then and now, 20 years later, is to provide unique value consistently and thoughtfully to every plan sponsor. I primarily support defined contribution plans in the midsize to large market, and I also work with defined benefit and nonqualified plans. I consider it a privilege to serve plan sponsors and participants and am grateful for the opportunity to support my clients in their efforts to provide a meaningful and valuable retirement benefit.

PLANADVISER: How is your team unique/competitive in the marketplace?

Simonson: We have many team members who started their careers with recordkeepers or investment managers, so we use our institutional knowledge to help our clients maximize their service provider relationships. This is just one of many ways we facilitate plan success. We leverage our size to create value for our clients in the marketplace through enhanced recordkeeping-related services and preferred pricing with investment managers. We also offer a team of specialists focused in areas such as ERISA compliance, financial wellness and investment consulting.

PLANADVISER: How do you grow your business? What changes to your practice or service model are you planning for 2024?

Simonson: Business growth comes primarily from my centers of influence, which I have thoughtfully cultivated over the past 20 years. I also receive referrals from current and former clients. Fiduciary governance is at the center of our services, and guiding our clients through SECURE 2.0 is at the forefront for 2024, alongside our continued focus on delivering financial wellness solutions to our clients. We also seek to enhance our offerings every year, building new and innovative tools for plan sponsors and participants.

PLANADVISER: Are you connected to a wealth management division? If so, please explain how you work for them and your goals for coordination. If not, please explain whether you plan to be in the future, or not, and why.

Simonson: Yes. At the end of 2022, Creative Planning (the largest independent RIA in the country) acquired my previous firm’s retirement business. We leverage Creative Planning’s expertise in advising more than 50,000 individuals and families to design financial wellness strategies in a manner that is broadly applicable to a typical retirement plan participant. We are constantly evaluating synergistic opportunities to benefit our clients.

PLANADVISER: What challenges do you think the retirement plan industry faces, and what role do you have in addressing and confronting those challenges?

Simonson: Our industry faces three primary challenges:

1) Assessing value vs. lowest cost. Fee litigation continues to impact our industry, and litigation risk ultimately impacts us all. Litigation was preceded by fee transparency, and both have resulted in lower fees for all providers. Lower fees have, in large part, caused lower margins, industry consolidation, industry workforce turnover and increased pressure for providers to do more with less. Our role is to help our clients ascertain value beyond just selecting the lowest-cost option. It may take time, but if we all commit to seeking and delivering value, our industry will be able to sustain itself and provide better outcomes in the decades to come.

2) Increasing employee engagement. One of the downsides to the overwhelming success of automatic features is the disincentive for participants to engage with their retirement plan. In today’s fast-paced society, fighting for participant attention is a huge challenge. We are committed to helping our clients acknowledge this reality and delivering creative ideas and solutions to engage. We offer multimedia participant content through video, podcasts and newsletters. We share feedback and partner with providers as they innovate with mobile devices, text messaging, social media and artificial intelligence.

3) Making retirement personal. Treating every participant the same with a default deferral rate and age-based investment portfolio isn’t personal. Offering participants an easy way to establish a personalized savings plan and investment portfolio is key to engagement and improving their chances of achieving a successful retirement income.

PLANADVISER: Why do you feel it is important to work with plan sponsors and companies offering retirement benefits to their employees?

Simonson: Plan sponsors are, first and foremost, responsible for running their business to deliver customer value, derive a profit, further their mission and fulfill an important role within their particular supply chain or community. They are not in business to manage a retirement plan. Since the pandemic, much more has been added to the plates of human resources and finance teams. Navigating the legislative and regulatory environment in our industry, with an extremely complex set of requirements, can be overwhelming and fraught with potential risk. This combination of factors makes it vital for specialist advisers to guide their clients, providing expertise they don’t have, perspective they can’t gain and time efficiency they can’t create. It is critical that we give our clients the confidence to make decisions that will protect their business while providing an opportunity for their employees to reduce stress, improve productivity and achieve a financially secure retirement. Plan sponsors simply don’t have the ability to do this as effectively without our help. This increased effectiveness translates into lives being changed for the better.

PLANADVISER: What are three of the most important issues your plan sponsor clients face with their retirement plans? What actions do you take to assist them in overcoming those issues?

Simonson: Mitigating fiduciary liability, creating financially confident employees and navigating ever-increasing regulation and legislation are the biggest issues facing our clients today. Our industry’s regulatory and compliance requirements are daunting and make it easy for plan sponsors to make honest, but costly, mistakes. We provide them with an opportunity to transfer some of that liability through our ERISA 3(21) and 3(38) services or mitigate virtually all of it through our pooled employer plan partnerships and a structured approach to address their key fiduciary obligations annually, including fee benchmarking, fiduciary training, investment and compliance reviews.

It’s clear that participants want advice on their best next step to improve their financial future, and providing education and information isn’t enough. My role as an adviser is to help plan sponsors realize the benefits of a healthier, happier and more productive workforce by adopting a personalized approach to better outcomes and improving their financial confidence.

Lastly, our industry is constantly changing due to new legislation and regulatory requirements. SECURE 2.0 is an enormous challenge for most plan sponsors, and it’s our role to break down the individual components and consult with fiduciaries to help them make informed, prudent decisions on behalf of their plan. While many of the provisions are optional and create opportunities to improve outcomes, there are several requirements that will stress plan sponsors’ administrative systems, recordkeeper capabilities and potentially cause errors resulting in costly corrections. It’s paramount that I develop proficiency in this legislation and provide the advice they need to maximize the opportunities and keep their plan compliant. I do this through various learning opportunities at Creative Planning and industry events.