New Advisory Fixes Its Focus on Outcomes

Todd Timmerman was managing director of Principal Financial Group for almost 27 years, but he has founded a new firm, Retirement Plan Analytics, where he is managing director. 

Using the metaphor of theatrical play acts, he tells PLANADVISER, “In my first act, I got a chance to do a lot of fun things and high-quality work with a great company. I was at a point where I could retire or have a really big second act—and I wanted to have an impactful second act.”

Timmerman describes those years as having a front row seat, watching consultants, often LPL, help his clients. RPA has chosen LPL Financial for support in providing clients with fee-based investment advisory services.

The two companies are a good fit, according to David Reich, executive vice president and head of Retirement Partners at LPL, because of their similarly aligned philosophies. “What struck me the most was their focus on an outcomes-based approach,” Reich tells PLANADVISER. “The two of us really believe we have to move toward that to help people do their best to prepare for retirement. Too much time is being spent on the three Fs. What are the outcomes? The first conversation we had, about 90% was spent on outcome and 10% on the everyday parts of the business.”

RPA is not targeting any specific size plan or market. Most advisers just starting out may feel they have to write every plan, Timmerman says, adding he has the resources of a 27-year career and of starting out as a large consulting firm.

RPA has plans ranging from $1 million to more than $100 million. What the firm’s plans have in common is that they are all companies that care greatly about outcomes for participants, Timmerman says: “It’s our No. 1 item. Our whole value proposition is around helping companies make the decisions for their employees to make successful decisions for retirement.”

The large-plan market offers a number of good consulting solutions, Timmerman says, and RPA has built solutions to work with plans of all sizes, from small to million-plus. RPA’s value proposition is a three-tiered approach to helping people in the organization make decisions: the retirement plan committee, HR and finance, and the plan participants.

Timmerman deliberately places the participants last, not because they are least important, but because they have a difficult time succeeding if the committee and other departments in front of them don’t make good decisions.

The three levels have different areas of focus, he notes. “At the committee level, they’re focused on design to get better outcomes, expense benchmarking and collecting, investment menu creation, selection and monitoring, fiduciary governance and risk mitigation,” he says. “HR and finance work to leverage those across the organization, and the participants need to know how to save, how to invest, and, at retirement, the best income strategy.”

The biggest item on Timmerman’s list is helping the plan sponsor client compete against yesterday by making the right decisions, he says. “It’s not measured to a ratio, but by seeing a plan continue to have year-over-year progress. That’s what we want to measure and get the committee focused on.” Fees, funds and fiduciary are key ingredients, he admits, but at the end of the day it’s the outcomes that matter.