2024 RPAY – Phillip Senderowitz, Strategic Retirement Partners

Business at a Glance as of 12/31/23

• Location: Maitland, Florida
• How many plan assets do you have under advisement? $505M
• What is your median plan size (in assets)? $2M
• How many plans do you have under administration? 52
• How many participants in total do you serve? 8,000
• Parent firm: N/A

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

Senderowitz: Starting my career at Charles Schwab, I was initially drawn to the world of finance as a customer service representative, where I gained a deep understanding of the retail investor’s needs. My ambition to manage a mutual fund led me to pursue an MBA and CFA designation, eventually landing me a role as a portfolio manager at STI Capital Management, part of SunTrust Bank. However, I found my true calling in asset allocation rather than stock picking, which led me to the private wealth division.

Despite the allure of managing substantial portfolios, I sought a more meaningful impact, leading me to the retirement plan sector. The opportunity to transform lives by guiding individuals from no savings to a secure retirement resonated with me far more than merely growing a portfolio’s value.

I’ve built my practice from the ground up, joining 401(k) Advisors in 2009 and later becoming a founding member and shareholder of Strategic Retirement Partners. Alongside my assistant Julie, we manage 60 plans with $400 million in assets, a third of which were initiated under my guidance. As the sole SRP representative in Florida, my practice has grown organically, without affiliations or inherited accounts, reflecting my commitment to making a significant, positive impact on individuals’ retirement readiness.

PLANADVISER: How do you grow your business? What changes to your practice or service model are you planning for 2024?

Senderowitz: My growth strategy prioritizes recognizing and nurturing the potential of micro and startup retirement plans. These often-overlooked segments constitute about 50% of my prospecting efforts. I engage in targeted marketing locally and collaborate extensively with advisers at Strategic Retirement Partners and other firms, believing in the ample opportunities these small plans offer, despite potential competition concerns.

Technology-driven mass customization is key to our approach. Standardizing vendors and investments and streamlining plan design options ensure efficiency and scalability. Each client receives a custom portal, such as (www.venrollment.com/v/sample-company), to clarify retirement plans, especially for companies lacking dedicated HR expertise.

Looking ahead to 2024, we plan to intensify our focus on leveraging technology to enhance our service model, making retirement plans more accessible for small businesses. Targeted marketing efforts, particularly in states with retirement plan mandates, aim to extend our impact beyond Florida.

WELLthBuilder, a product tailored for small and startup plans, is our cornerstone initiative. Supported by a dedicated marketing campaign and specialized website, it demonstrates our commitment to closing the retirement plan coverage gap nationwide.

Engaging in expanding the defined contribution retirement plan system is both a strategic opportunity and a moral obligation for retirement plan advisers. Focusing on startup plans not only fosters growth but also cultivates long-term loyalty, as clients appreciate guidance through the complexities of establishing their plan.

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

Senderowitz: Our shared mission revolves around empowering American workers to reach their retirement goals. This objective requires a steadfast commitment to truth and innovation, especially in the face of widespread misinformation. Across various platforms, from social media to articles and videos, misleading content often breeds doubt about the value of retirement plans. These sources grab attention with flashy headlines and persuasive visuals focusing on perceived drawbacks such as high investment fees, the perceived inefficacy of tax deductions for lower-income earners and restricted access to funds. Unfortunately, these sources frequently overlook the significant advancements in plan design that actively address and alleviate these concerns. These benefits are not just theoretical. they are backed by extensive data showcasing their pivotal role in securing financial futures.

My approach to tackling these challenges is multifaceted. It involves engaging directly with authors, providing factual information to counteract misinformation and collaborating with plan sponsors and organizations that may overlook the value of offering retirement plans to their staff. This dedication extends to advocating for legislative changes in retirement plans to ensure they adapt to meet the diverse needs of all savers, particularly those facing disadvantages.

One crucial aspect deserving attention is the favorability of Roth 401(k) contributions for lower-income participants compared to traditional contributions. Unfortunately, many recordkeepers and employers erroneously perceive a fiduciary risk in defaulting to Roth contributions, leading to subpar outcomes for participants who need appropriate choices the most.

By confronting misconceptions head-on and refining plan features to better serve all participants, we uphold the integrity and success of retirement planning.

PLANADVISER: Why do you feel that retirement plan advisers should get involved in the expansion of the DC retirement plan system to cover more employers and, in doing so, more employees?

Senderowitz: The advent of SECURE 2.0 subsidies has transformed the landscape for servicing startup plans, making it financially viable to support these businesses in their nascent stages until they become self-sustaining. This development bridges the gap between the cost of servicing and reasonable compensation, making the endeavor more sustainable for advisers.

Moreover, the startup plan market serves as an invaluable training ground for new advisers. Under the mentorship of seasoned professionals, they can gain comprehensive exposure to a variety of plans, learning the ropes with relatively lower risk. This hands-on experience is crucial for their development in both retirement planning and individual wealth management.

At the heart of our involvement is a moral imperative. The small/micro plan segment, often neglected, stands to benefit immensely from our expertise. My commitment to this industry was driven by a desire to facilitate successful retirements, and it’s in these overlooked segments where our impact can be most profound. By extending our reach, we not only fulfill a professional duty but also a moral one, ensuring that more employees have access to the tools and guidance necessary for a secure retirement.

PLANADVISER: What are the biggest stumbling blocks to adding more tax-advantaged retirement savings opportunities in the workforce? What are you doing to try and overcome them?

Senderowitz: Navigating the expansion of tax-advantaged retirement savings opportunities requires addressing key challenges: enhancing adviser diversity, changing perceptions about the viability of startup plans and optimizing legislative incentives.

The diversity shortfall in the advisory realm, especially in connecting with minority-owned small businesses, is a critical barrier. At Strategic Retirement Partners, I champion the recruitment and nurturing of diverse talent, recognizing that shared community ties are foundational to building trust and expanding retirement planning access.

A pervasive myth within our community is the supposed unprofitability of engaging with startup plans. I’ve invested considerable effort in reshaping this narrative, illustrating the potential and scalability of servicing small and startup plans. My advocacy extends beyond SRP, aiming to enrich the broader advisory landscape by demonstrating the mutual benefits of embracing these opportunities.

To directly address this, I spearheaded the development of WELLthBuilder within SRP, a pioneering product designed specifically for small and startup plans. WELLthBuilder not only equips SRP advisers to effectively serve this segment but also empowers advisers outside the retirement plan specialty to offer comprehensive solutions to their clients, thereby broadening the impact.

Despite the positive strides made by SECURE 2.0 in providing incentives for small businesses, its effectiveness is curtailed for those not yet profitable or for non-profit organizations. My engagement with the National Association of Plan Advisors and continuous advocacy for policy evolution are geared towards making these incentives more inclusive.

Through these multifaceted efforts, I am committed to dismantling the barriers to retirement savings, fostering a more inclusive, profitable and supportive environment for all stakeholders involved.