October 12, 2017

2015 RPAY – Spectrum Investment Advisors, Inc.

Reported by

PA: What is your mission statement?

Spectrum Investment Advisors: Our mission is to maximize the retirement benefit program within an organization by providing unbiased investment and consulting solutions. We empower plan participants in their retirement readiness with individualized coaching, education and execution, utilizing our patented color-coded investment concept.

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PA: How is your team/process/structure unique?

SIA: We are unique in the following areas:

  1. Our patented Spectrum Investor® Communication Process uses the simplicity of colors to communicate investing, as illustrated by our tagline: “Colors Simplify Investing®”; 
  2. Thousands of one-on-one employee meetings nationwide, where we act in a fiduciary advisory role to the plan participant;
  3. Retirement coaches—seasoned investors who have retired from successful careers help others to do the same. They provide a distinct, holistic perspective by sharing their lifetime investment experiences;
  4. Custom benchmarking tools, including our patent-pending Spectrum SIRRP [Spectrum Investor™ Relative Risk and Performance] Score®, to aid plan sponsors in administering their plans as a fiduciary adviser;
  5. Our seven shareholders, who are ethnically and gender-diverse as well as multigenerational, bring over 150 years of combined retirement plan experience and also contribute bilingual capabilities in Spanish;
  6. Advancement of the retirement-planning cause by several of our team members, who are involved at the local and national level in organizations such as the board of directors of Wisconsin Retirement Plan Professionals Ltd. (WRPPL), Retirement Plan Advisor Council, NAPA 401(k) Summit Steering Committee, and Washington Fly-In Program; and
  7. Retirement industry leadership, by serving as panelists and speakers at industry events and achieving leading certifications such as Certified Behavioral Finance Analyst and Global Fiduciary Steward.

PA: What are the most important issues your plan sponsors face with their company retirement plan, and what specific actions do you take to assist them in overcoming those issues?

SIA: Time and time again we hear about a lack of participant engagement, high levels of distributions from the plan, and an inability to properly benchmark fees and services.

We engage participants in the process through a variety of methods, such as mandatory one-on-one meetings with our retirement coaches, and utilize behavioral finance principles in plan design, such as auto-enrollment and auto-increases. We also educate participants in post-retirement strategies by conducting topic-specific training seminars for their retirement phase. Our patented color-coded materials help simplify the process.

By working with multiple recordkeepers, we are able to offer the most efficient investment alternatives for cost purposes, and we use custom benchmarking materials to compare the services offered to the plan. We have successfully changed fee structures and service models to not only better serve our clients but also lower the total plan cost.

PA: Please describe any special education or communication initiatives you’ve undertaken with plan sponsors or participants.

SIA: We recently launched the Spectrum Investor® Coffee House Educational Series. With a vision of incorporating a coffeehouse approach to our new building, we’ve created a comfortable atmosphere where our clients can come in and learn. Our topics include economic reviews, financial planning strategies such as maximizing Social Security and Medicare, long-term care insurance and estate planning.

PA: As a retirement plan adviser, what do you take the most pride in?

SIA: Our team’s relentless passion for making a difference through participant education has resulted in many of our customers becoming advocates, exemplified by our average customer retention of 98% for the past 14 years. 

BUSINESS AT A GLANCE

PLAN ASSETS UNDER ADVISEMENT: $1.3 billion

MEDIAN PLAN SIZE (IN ASSETS): $9.2 million

TOTAL PLANS UNDER ADVISEMENT: 115

TOTAL PARTICIPANTS IN PLANS SERVED: 20,000

October 12, 2017

2015 RPAY – The Ratay Group at Morgan Stanley

Reported by

PA: What is your mission statement?

The Ratay Group: To bring peace of mind and confidence to retirement plan sponsors and participants. 

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PA: How is your team/process/structure unique?

RG: We are a big believer in uncomplicating the complicated. Both plan sponsors and participants appreciate the detail we go into with our investment due diligence, and they really appreciate how we communicate that performance with pictures. We focus on teaching the participant what really matters: saving money. We also ensure that participants understand how investments such as target-date funds (TDFs) work and that they are comfortable with the decisions they make. 

PA: What have you done in the past year to improve participants’ retirement readiness?

RG: We feel improving retirement readiness is a three-step process. First, we want to get participants into the plan by implementing automatic enrollment at a 6% deferral rate. Second, we want to get all participants into a fully diversified portfolio. Through Morgan Stanley’s vast resources, our global investment committee creates a customized target-date glide path that fits the unique needs of the client’s employee base. We not only believe we can achieve better returns than off-the-shelf target-date funds, we are also able to help our plan sponsors fulfill their fiduciary duty to properly select and monitor an appropriate TDF.

The final and arguably most important step to truly being able to have a successful retirement is to get participants to increase savings to 10% and even 15%. Using an auto-increase that coincides with the company’s annual raises and dedicating entire days on-site for group and one-on-one education meetings are the main drivers of increasing contributions. During our one-on-one meetings, when we go through the retirement tools on the provider website, participants almost always walk away increasing their contributions. 

PA: Describe any particularly noteworthy investment initiatives you have led with your customer base in the past 12 months.

RG: Through the Morgan Stanley Global Investment committee, we are able to provide eight risk-based models as well as three TDF glide paths. Each of our models is constructed to minimize the risk of having insufficient means to support income in retirement, due to poor asset allocation. Each is built to hedge risks that may be largely mitigated, such as the risk of an unfavorable sequence of market returns, and to strike efficient trade-offs between the risks that cannot be mitigated, such as market and longevity risk. 

In addition, Morgan Stanley will sign on as either a 3(21) or 3(38) fiduciary. By delegating investment management to our group and Morgan Stanley, plan sponsors are no longer responsible or liable for individual investment decisions related to their plans.

PA: What are the most important issues your plan sponsors face with their company retirement plan, and what specific actions do you take to assist them in overcoming those issues?

RG: We think they are the same as in the past: getting employees to save, invest and spend their retirement money wisely. In the past, companies did everything for participants, through defined benefit (DB) plans. They saved, invested and provided a monthly check. All that participants had to focus on was doing their jobs. Today, employees need to decide what is the appropriate savings rate, choose their investments and allocations, and determine how much to withdraw in retirement. Most people lack the knowledge, expertise, resources or time to make those decisions. 

Our goal is to make the 401(k) more like a defined benefit plan, by using automatic enrollment, auto-escalation, a customized TDF as the qualified default investment alternative (QDIA) and, eventually, a lifetime income option. The participants invest in a professionally managed and diversified portfolio, continue to increase their savings and, when retirement comes, have a guaranteed monthly income amount, all without the complexity of the typical 401(k). 

BUSINESS AT A GLANCE

PLAN ASSETS UNDER ADVISEMENT: $800 million

MEDIAN PLAN SIZE (IN ASSETS): $14 million

TOTAL PLANS UNDER ADVISEMENT: 28

TOTAL PARTICIPANTS IN PLANS SERVED: 5,000

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