PA: Tell us about your practice and how you and your team members got into advising retirement plans.
We built LHD Retirement on the tenets of confident solutions, clear goals and measurable metrics, and intentional communication. What this means is that for every client relationship, we customize outcome-driven solutions based on their unique needs and goals.
The founder and leader of LHD Retirement, John Ludwig, started in the retirement plan industry in 1984. Christopher Keen and John met in 1994, where they worked side by side until 2004 when they each went on to form their own advisory practices. In 2014, Chris merged his practice into LHD Retirement and again joined with John to further their shared philosophies on retirement plan strategies and client service.
What separates us from other Advisers is not just process—which consistently drives measurable plan improvements, excites stakeholders and participants, and strives to achieve plan and participant goals—but ability and passion to help everyone and anyone pursue their desired retirement outcome with care, prudence, and customized outcome-driven solutions based on experience, an insatiable craving for industry knowledge, and the wherewithal to constantly reflect and improve.
PA: How is your team/process/structure unique? How has it evolved? Where will you be in five years?
One of the core pieces of advice that we give our clients is that you must empower your participants to create their own retirement outcomes. This means giving them the tools and advice they need to succeed. We believe the same is true of our team. As a small group, each team member must contribute and be a leader in some form. Every team member discharges their duty to help lead plans and their participants to work toward successful retirement outcomes as more than just a job. Everyone has ownership over their work.
For newcomers to the team, we joke that onboarding can seem like a baptism by firehose. We desire a team structure that is not siloed, but built on ongoing collaboration, with contributions coming from every member of the team. Every client has multiple leads, which allows for a deep understanding of client needs by multiple professionals, an ability of our team to respond quickly and effectively to client inquiries, and empowers the next generation of staff to grow with clients.
Since our inception, we have grown from a one man shop to a firm built on teamwork and constant improvement of our advice and standards. Over the next five years, we will continue to grow as a team by adding staff or enhancements in an effort to drive the outcomes our clients desire.
PA: What have you done in the past year to improve participants’ retirement readiness?
To improve participants’ retirement readiness we take a holistic view of the plan and organization. This means incorporating investment architecture and plan design assistance with an education program that empowers participants to build towards their retirement goals.
Plan design enhancements are driven by behavioral finance theories, such as removing inertia bias by implementing auto features. Matching strategies are designed to maximize participant contribution and employer return on their benefit. We encourage plans to reduce and simplify their investment menus to make them less intimidating to participants and to encourage proper allocations. Plan and investment fees are monitored and reviewed ongoing to ensure that the plan is getting appropriate value for the fees paid.
While we strongly believe that effective plan design and investment selection can aid participants towards retirement readiness, it doesn’t help their entire financial picture. Where we make the largest difference is in our targeted demographics-based education initiatives that focuses on holistic financial wellness. Our objective is to create an education program that is robust, fresh, and relevant to the daily lives of an organization’s participants. By engaging participants, we gain insight into what they are thinking. This insight is used to fuel committee discussions and build ongoing strategies to improve plans. Education is never outsourced. We believe that having conducted all the investment due diligence and plan demographics analysis, we are in a unique position to help participants. By being the singular resource for plan participants, we’re able to build trust over a long relationship. Our hands-on approach to employee education aims to drive participation and deferral rates higher on the plans we advise.
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 issues that plan sponsors face today are twofold. The first is organizational and having the retirement plan be a competitive, attractive benefit that can be used to attract and retain talent. With the labor market tight, talent is hard to find and becoming increasingly aware of the maximizing this part of their benefit package. For plan sponsors, they do not want to lose on valuable talent by not having a competitive retirement plan. We benchmark our clients plan features against their competition and recommend strategies with the objective of maximizing the employer’s return on their benefit investment.
The second issue is at the participant level, and centers around proper preparation for retirement. If participants aren’t ready to retire on time and with dignity, there is the possibility that they become a drag on an organization by increasing healthcare costs, lowering productivity, and contributing to talent drain by not opening their positions to younger people to advance. In response, plan sponsors should take a long-term view of their plan, seek to educate participants about financial planning, and build auto features into the plan.
PA: What challenges do you think the retirement plan industry faces and what role do you have in addressing and confronting those challenges?
Even nearly a decade after the financial crisis, advisors and the retirement industry face a crisis of trust. And we have no one to blame but ourselves. We still see complex fee arrangements where vendors and advisors are being compensated in layers of fees. There’s often a misunderstanding from plan sponsors of fiduciary duties and whether the professionals providing services to their plan are acting as fiduciaries. This confusion and layers of complexity contributes to the lack of trust. The Fiduciary Rule could be a step in the right direction of rebuilding trust, but it is unclear how and when that will fully come into effect.
We preach a fiduciary standard and full transparency in everything we do. Our team believes strongly in bettering our industry, fellow advisors, and plan sponsors to empower them to help participants pursue successful retirement outcomes—not only for our clientele. We speak at conferences, write monthly commentaries for Employee Benefit Advisor, and are often asked to comment for newspapers.
It is not enough that we are considered leaders in our industry, but that we are actively improving it.
Business at a Glance
How many plan assets do you have under advisement? $580,000,000
What is your median plan size (in assets)? $10,000,000
How many plans do you have under administration? 103
How many participants in total do you serve? 10,000