Sean Kelly,
Heffernan Financial

Business at a Glance as of 12/31/23

• Location: San Juan Capistrano, California
• How many plan assets do you have under advisement? $1.12B
• What is your median plan size (in assets)? $6.2M median; $23.8M average
• How many plans do you have under administration? 47
• How many participants in total do you serve? 20,610
• Parent firm: Heffernan Financial

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

Kelly: My focus is entirely on retirement plans, covering defined contribution, defined benefit and executive benefit plans. Starting my journey on the broker/dealer side in 2007 with National Retirement Partners and later acquired by LPL Financial, I’ve had the privilege of collaborating with top-tier retirement plan advisers and industry peers over many years. This continuous interaction with these men and women cultivated a comprehensive understanding of our profession’s intricacies and responsibilities. Being recruited by Blake Thibault and joining Heffernan Financial in 2016 as a retirement plan adviser has proven to be an incredible opportunity. Our tight-knit and growing team operates like a family, with each member an expert in the different facets of retirement plans. Over the last 8 years, developing a clientele, where each individual feels like a friend, has been immensely gratifying. I am deeply committed to providing unmatched support and building lasting partnerships with every client. Our profession holds significant weight, as we bear the immense responsibility of assisting people in adequately preparing for a stage in life that can be difficult to envision. It is crucial for them to grasp the reality and importance of this phase and recognize the critical role today plays in planning for it. As a pillar of our practice, we are dedicated to addressing participants’ needs at every stage of their lives. My career and practice do not feel like work; I genuinely love what I do every day.

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

Kelly: Our uniqueness and competitiveness in the marketplace are underscored by our tag line, “because you’re different.” We understand each client and participant is different, crafting tailored solutions at both the plan and participant levels. By collaborating closely with committees and team members, we go above the role of traditional investment adviser, becoming trusted partners and often forming lasting friendships. We serve as a consultant, financial coach, investment adviser, and constant advocate for every client. Our approach of deeply embedding ourselves within each client’s team not only provides a competitive edge, but also assures our clients that they can always rely on us for personalized assistance, guidance, and solutions. The same principle applies when working with participants. Recognizing the uniqueness of everyone’s financial situation, we prioritize listening to and meeting employees where they stand. Our guidance extends beyond the realm of retirement plans, addressing their broader financial concerns. By incorporating behavioral traits into our communication and interactions, we foster more successful engagements with participants. Our ability to provide such a customized offering stems from our independence. This represents another distinct and competitive advantage, which is somewhat different to the industry trend over recent years. At Heffernan, we are employee-owned and remain beholden to our clients first and foremost. This independence allows us to prioritize client interests above all else, ensuring unbiased advice and decision-making. This deep understanding of each client’s uniqueness, coupled with our independence, sets us apart in the market and underscores our commitment to client success.

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

Kelly: In the evolving landscape of the retirement plan industry, several challenges stand out.

Participant Financial Literacy is one of the foremost challenges in our industry. Our strategy bridges these literacy gaps through comprehensive financial education initiatives. We provide group learning sessions and personalized 1-1 financial coaching, ensuring participants are equipped to make informed decisions at any stage of their lives. Our behavior-based communication approach facilitates a deeper connection with participants, enabling them to navigate their financial futures confidently.

Changing Demographics poses another significant challenge, needing tailored solutions to manage longevity risk and address evolving costs. Understanding demographic trends, we guide participants on strategies aligned with their unique needs, emphasizing the goal of maintaining their current lifestyle post-retirement. As life expectancy increases, it becomes imperative for participants to grasp the concept of income replacement during retirement, a concept we prioritize in our educational efforts.

Regulatory Changes presents an ongoing challenge, requiring continuous adaptation to ensure compliance with evolving mandates such as the CARES Act and the Setting Every Community Up for Retirement Enhancement Act of 2019 and the SECURE 2.0 Act of 2022. We remain exceedingly well-informed, monitoring regulatory developments, providing proactive guidance to help clients navigate these complexities while optimizing enhancements to meet the diverse needs of participants.

Litigation Challenges are always front and center. We provide thorough assessments of clients’ retirement plans to mitigate risks related to fees and fiduciary duties. Through diligent monitoring and proactive measures, we work to safeguard clients from potential litigation, ensuring plans operate smoothly and in the best interest of participants, with a documented process in place.

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

Kelly: Working with plan sponsors who offer retirement benefits is crucial. Through my profession, I have the opportunity to help people while building a career, embodying the noble core of our field, which is dedicated to building and safeguarding individuals’ financial futures. We play a critical role in providing peace of mind and guidance to a diverse range of employees, each with varying levels of investment expertise who will rely on these benefits for retirement. Retirement benefits are not simply perks, but fundamental aspects of an employee’s financial landscape, and often the most substantial.

The responsibility of assisting people to retire with dignity on their own terms after a lifetime of hard work inevitably falls on the employer, whether right or wrong. Therefore, partnering with plan sponsors becomes key in guiding them through the complexities of any retirement plan. Retirement benefits are governed by a myriad of rules, regulations, government agencies and laws. Navigating through this regulatory landscape requires expertise and true attention to detail. Working closely with plan sponsors helps ensure that they remain compliant with these regulations while also being aware of the latest retirement plan benefits available, protecting and advancing the interests of both the employer and the employees.

By fulfilling our professional and fiduciary duty to our plan sponsor clients, we assist in preserving their best interests, mitigating liability and contributing to the broader goal of enabling individuals to retire with dignity on their own terms after a lifetime of hard work.

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?

Kelly: Three critical issues that plan sponsors face are participant engagement/financial literacy, creating a healthy retirement plan with changing demographics and adherence to regulations and regulatory reforms.

Addressing participant financial literacy is a key challenge for plan sponsors. Our comprehensive education initiatives empower participants to make informed financial decisions, boosting engagement and ensuring active involvement in the retirement plan benefit and process. Through targeted communication methods like group sessions and individual meetings, we tailor support to suit participants’ needs, fostering confident financial decision-making at every life stage.

Plan sponsors must navigate complex regulatory landscapes encompassing ERISA, DOL, and IRS regulations, with non-compliance risking penalties, lawsuits, and reputational damage. We conduct thorough reviews of investments, plan design, and documents to ensure compliance, providing proactive guidance amidst regulatory changes. Thorough assessments mitigate litigation risks, ensuring plans operate in participants’ best interests with a well-documented process. In the ever-changing regulatory environment, we remain vigilant in providing proactive guidance to help clients navigate these complexities while optimizing plan enhancements for both employers and employees.

Designing a retirement plan with impactful features, low fees, and provisions that promote active employee participation is essential for ensuring the long-term financial well-being of plan participants. We partner with plan sponsors to offer specialized plan designs unique to each client and culture. By understanding the culture of a client and changing demographic trends as life expectancy rises, we guide plan sponsors to offer the latest resources to help employees reach the ultimate goal of income replacement during retirement.