Practice Management December 1, 2023

Adviser Voices: How to Structure a Retirement Plan Advisory

Industry experts explain how they structure their practice to produce the best results. 
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Art by Ellen Weinstein

With the evolving role of advisory firms in handling increased responsibilities related to fiduciary duties and employee outcomes, a firm’s organizational structure is crucial to allow for optimal results. 

Below, three plan advisers give their thoughts on how a team can be structured to effectively serve clients and grow its business.  

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Matthew Eickman, National Retirement Practice Leader, Qualified Plan Advisors 

Matthew Eickman

Before diving into details regarding team composition, we begin with one key philosophy that permeates through the plan advisory relationship: Concern for services available to employees and their potential outcomes should be integrated into the broader fiduciary and advisory relationship. 

The nation’s strongest advisory firms reflect plan sponsors’ demand for them to handle significantly more responsibility than a decade ago. We have built an advisory practice that is not only situated to handle those specific responsibilities, but also can weave them together in a way that looks out for employee outcomes. Here are some ways we have adapted to meet the demands of various stakeholders: 

  • Sponsors no longer ask if a firm can be a fiduciary; they simply ask whether an adviser will serve in an ERISA 3(21) or 3(38) capacity. We have built out consistent fiduciary investment selection, monitoring and reporting processes that permit us to be equally comfortable in either capacity. 
  • Sponsors and plan participants are no longer primarily dependent on portfolios self-constructed from a lengthy core funds list; an adviser must be prepared to analyze target-date funds in detail and offer adviser-managed account capabilities. We have developed a proprietary Target Date Deep Dive and developed adviser-managed account offerings on roughly 10 recordkeeping platforms. 
  • Recordkeepers have cut back on the use of people to service clients; an adviser must have greater knowledge of plan design issues, operational best practices and IRS and DOL methods of correction for common errors. Our retirement team includes four ERISA attorneys to meet that need. 
  • Recordkeeper education is largely dead; recordkeepers offer tremendous online resources, but most have conceded that their education efforts are ineffective. Advisers are developing their own educational services or outsourcing it to a third-party financial wellness service. We developed a proprietary financial wellness platform and deliver those services in our Financial Fitness for Life program. 
  • Participants have demonstrated a diminished interest in in-person group meetings; they can access group educational content online and place greater emphasis around the availability of one-on-one meetings with a financial adviser, consultant or coach. We built out a Financial Wellness Checkup tool that makes it easy for employees to share their levels of stress and confidence and to schedule those personalized one-on-one conversations. 

Advisory firms and retirement practices are best-situated to thrive and grow when they can integrate those services. Many firms continue to take a siloed approach to investment management, vendor management, participant education, financial wellness and wealth management services. Those firms are being left behind by those that recognize the need for the “investment folks” to care about employees’ needs and expectations, for the ERISA attorneys to think about plan design options that may drive better outcomes and for the financial wellness team to understand the plan. 

There is growing demand for fiduciaries to not only be safe fiduciaries, but also be good fiduciaries. Our firm is structured to make good on that demand, for both our clients and our advisers. 

Marilyn Suey, Principal and Owner, Diamond Group Wealth Advisors 

Marilyn Suey

Top Tools, Tips and Techniques for Success: 

  1. Know and understand your clients’ needs and goals. Every individual/group is unique and has different plans for their future. We start off with getting to know who they are, their ambitions and about their life outside of their finances.
  2. Discuss their financial goals and how best to achieve these goals. We send out a risk assessment to gauge their risk tolerance to the market. We want to know how they feel about money as a whole. 
  3. We meet people where they are and then guide them to where they want to be. Every person has a different starting point, as well as a different end goal.
  4. Meeting with the participants/clients regularly. Life happens … period. It is important to be in contact with clients often, as so many unplanned events can happen in short periods of time. The client/participant needs to know we are there for them through the good times and bad. 
  5. Involve the clients in the investment process. While yes, some people have no interest in the investment process, we feel it is important to educate our clients on not only their investments, but the market as well. Explaining what is happening in the stock market leads to better-informed clients who understand volatility.  
  6. Assist clients in referring them to other professionals of expertise. Ensuring your clients have a knowledgeable CPA, estate planning attorney for trusts/wills, life/health insurance and especially a point of contact at our office that they can reach out to and expect a quick response. 
  7. At the end of the day, make sure your client feels important. We have a monthly newsletter that goes out with updates on the financial markets and even includes a different food recipe, so they are not overwhelmed with investment information. Be sure to send birthday and holiday cards, as clients appreciate the attentiveness to details. 

              Jeff Leonard, Financial and Retirement Services Leader, Gallagher 

              Jeff Leonard

              Gallagher has structured its Financial & Retirement Services business to address all aspects of individual and organizational financial well-being. With qualified retirement plans at the core of our business, we use the team’s understanding of how qualified and nonqualified plans fit into a total rewards strategy to structure plans that align an organization’s philosophy with effective and engaging programs across the organization for both broad-based employees, as well as executive groups. 

              Our geographically dispersed Financial & Retirement Services teams are backed with the support of in-house CFA charterholders, certified financial planners, enrolled actuaries, ERISA compliance attorneys, financial well-being consultants, financial literacy educators, chartered life underwriters and chartered financial consultants, allowing us to offer the experience needed for any type of retirement plan and workplace financial well-being solution while delivering locally and with a personalized touch. 

              The teams view retirement plans as a component of an organization’s overall financial well-being proposition. Our goal is to make sure the structure of the plan(s) are sound: fiduciary governance, diversified investments, reasonable fees and with the right vendors managing day-to-day operations. 

              At the same time, we aim to build a comprehensive financial well-being strategy that helps all employees—no matter where they are on their journey—feel more confident about their financial well-being, from budgeting to saving or planning for retirement. Our approach is illustrated in the graphic provided below. 

              Practice Management November 1, 2023

              Participant Education Requires Innovation, 1-on-1 Coaching in Hybrid Labor Market

              PLANADVISER spoke to experts about how they provide financial wellness education to meet the needs of today’s participants.
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              Art by Luisa Jung
              Special Coverage

              Since the COVID-19 pandemic, company leaders have had to rethink the environment they provide for workers, from managing a workforce with hybrid schedules to abandoning office space altogether. But the need to provide retirement plan participant education and engagement, particularly in light of Peak 65 retirement in 2024, has only increased.

              The challenge, then, is for plan advisers to help their clients navigate these new workforce norms while, ideally, increasing participant offerings.

              “I think a hybrid work force makes it hard to engage with participants because you can’t go into an office and see them,” says Jason Chepnik, senior vice president of retirement and wealth at OneDigital. “The last three and a half years have been challenging to find new tricks and new things to do. “

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              Chepnik says against the backdrop of economic uncertainty, it has been challenging to get people to slow down and think about decisions they are making. Advisers must constantly re-evaluate their menu of services to ensure they can meet the ever-changing needs of participants.

              Best Ways to Connect

              “I think what plan sponsors really enjoy the most is having access to the one-on-ones, especially as most people are moving to virtual or hybrid work environments,” Chepnik says.

              He says his advisory team is getting a lot of “positive feedback” from 20-minute, one-on-one meetings with participants. OneDigital has also found success segmenting the business by small, mid and large clients, he says. Depending on the pricing, they can generate education programs that fit client needs while also being profitable for the firm.

              “For our larger plans and larger market clients, we’ll do custom events,” he says. “We will do a wellness event, something fun and engaging. It depends on market size and the clients’ budget.”

              SageView Advisory Group has been providing participant education in the form of group meetings, one-on-one coaching and education for many years, says Kerry Woods, SageView’s vice president of participation education and engagement. Woods joined the firm in January in conjunction with the launch of PersonalSAGE, its financial wellness platform. She says the popularity of financial wellness offerings largely depends on the plan sponsor and its employees.

              “We see heavy engagement within group meetings and webinars,” Woods says, though digital and online tools draw even more traffic.

              Woods says that there is no one-size-fits-all solution to improve participant education, but SageView tries to offer something for everyone, be it a new employee entering the workforce or an employee two months away from retirement.

              Matt Rafeld, director of financial wellness at the Alera Group Inc., agrees there is no blanket solution for participant education.

              “We know that the most effective way to engage participants and drive positive outcomes is to meet them where they are,” he says. “That means being able to customize solutions and pull multiple levers that include technology and active coaching.”

              Staffing and Fees

              Providing personalized, and often one-on-one, education, however, requires commitment and resources. OneDigital, a large and growing advisory, continues to staff sectors dedicated to participant education, says Chepnik.

              “We make sure we have enough resources by market or by the region to handle the traffic that’s coming in,” he says.

              With the growing level of engagement in digital one-on-one meetings, SageView has also been growing its team, Wood says. The firm has been hiring new employees to take calls and offer one-on-one coaching.

              “It truly varies based upon location, but we do have people that are well-versed in providing their education located throughout the U.S.,” Woods says. “We hire as needed within the field in order to bridge any of those gaps.”

              Within the financial wellness suite of solutions, fees are typically paid for at a plan sponsor level, she says. She recommends that plan sponsors pay for the service out of a human resources expense budget. However, if a plan has some type of ERISA budget, a company can also use that to pay for services.

              Increasing Engagement

              Woods says participant engagement varies greatly across client bases. Some sponsors take a very paternalistic view of their employees, while others take a more hands-off approach.

              “Some [plan sponsors] want to offer a financial wellness solution just to check that box,” she says. “We see more [participant] engagement rates from employers who truly take a deep dive within their employees, and you can feel that they want to be heavily engaged. We’ve seen better adoption rates from those employers.”

              Christian Mango, executive vice president of retirement plan services at Alera, says he believes the greatest levels of engagement occur when there is a high level of leadership buy-in. The more company leaders understand employees’ financial needs, the more committed they will be to helping staff improve their financial well-being and engage more with their benefits.

              “Depending on that level of commitment, we may see engagement rates range from 10% to sometimes north of 50%, and those rates typically climb over time,” Mango says.

              The challenge for plan sponsors and advisers is creating a program to meet participants where they are, Mango says. That not only means dealing with the challenge of dispersed and remote workers, but also identifying and responding to how those workers want to engage. 

              Chepnik believes organizations need a diverse group of educators that are “different ages, different genders, different walks of life.”

              “Younger generations like everything electronic, whereas older generations like things on paper and in person,” Chepnik says. “We have to make sure we’re constantly thinking about whether we have enough in our menu of services that we can address these challenges differently.”

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