November 5, 2019 • 25 mins
Securities offered through LPL Financial, member FINRA/SIPC. Investment advisory services offered through CSi Advisory Services, a registered investment advisor and separate entity from LPL Financial.This information is not intended as authoritative guidance or tax or legal advice.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Edward D (00:05):
Welcome everyone.
This is Ed Dressel withRetireReady Solutions for our
podcast.
We have Joe Williams out ofIndianapolis this morning.
I'm excited to have him.
Joe, welcome to our podcast.
Joe W (00:14):
Thank you.
Edward D (00:15):
It's great to have you.
Tell me a little about yourselfbefore we get started.
Joe W (00:18):
Well, I am a financial advisor, also our education
specialist for our firm, CSiAdvisory Services.
We're out of Indianapolis,Indiana.
The firm has been up and runningsince 1971.
And we're actually a retirementfocused firm.
(00:41):
And so my job really is allabout going out and educating
participants around theretirement plan to make sure
they know exactly how it worksand how to really best utilize
it.
Edward D (00:53):
How long have you been with CSi?
Joe W (00:56):
I'm going on a year, a little over a year and a half
now that I've been doing thiswith them.
Edward D (01:01):
And before this?
Joe W (01:02):
Before this I was an advisor at a bank for almost 20
years.
So I've been an advisor forquite awhile.
Edward D (01:13):
What obstacles do you find in your business?
Joe W (01:16):
Obstacles?
Really it's how to establishvalue, you know, when we're
working with customers--orworking with clients
now--because we see theemergence of the robo advisor
and so now there's a muchcheaper solution out there
(01:38):
that's virtual but clients canreally use and now we as
advisors are really having toshow our value when working with
customers to make sure that theyunderstand that by working with
us, the costs associated withworking with us are certainly
(01:59):
justified as opposed tobasically the virtual
experience.
Edward D (02:04):
And what are you doing to, to justify,"Hey you need to
hire an advisor for your plan?"
Joe W (02:10):
Well, it could be a number of things.
I mean really it's all aboutcustomizing the experience to
the client because it'ssomething that they don't
necessarily get with the roboadvisor.
It's more of a plug and playtype situation with robo,
whereas we are providing a lotmore of the customized solutions
(02:32):
for them to where it's moretailored to what their needs
are.
And we are able to kind of thinkoutside the box to ask those
additional questions to really,identify additional needs based
upon the conversations thatwe're having.
And so I think that's reallywhere we start to establish that
(02:54):
value with the customer, youknow, going deeper in making
sure we're having those extendedconversations that are going to
be more fact finding to identifythose needs that they haven't
even really thought of.
Edward D (03:08):
So, I'm going back a little bit on what you said to
me.
You left the bank after 20years, came to CSi you're the
education specialists.
What made you go,"That's the jobfor me."
Joe W (03:19):
Well, I noticed that if we look at what is important to
people in where the majority oftheir investment assets are
really coming from, they'redefinitely with the 401(k).
With the bank as an advisor,some of our biggest tickets that
(03:40):
we had were from 401(k)rollovers and meeting with
people and looking at how these401(k)s were allocated and I
just saw some really horrible,horrible allocations.
And we don't have to think backtoo far to the financial crisis
(04:02):
when the market's dropping 30,40% and you have all of these
folks out there that wereallocated way too heavy in the
stock market.
And so we saw a lot ofretirements that got postponed.
And so in meeting with peopleand looking at these things, I'm
(04:22):
thinking,"Wow, who in the worldis advising these people in
these plans?" And really theanswer was"No one." Very few
advisors have that capability tomake those recommendations over
the investments inside of theretirement plans.
And so with our firm, we arefortunate enough to have the
(04:45):
ability to do that.
And so that was what was reallyattractive to me--to be able to
form the relationships withpeople when they were still in
their working years and guidethem on how to invest the funds
inside of their retirement planso that we get better outcomes
for them when it comes time forthem to retire.
(05:06):
And so that's where my jobis--going in and sitting down
with them and saying,"Let's takea look at this retirement
allocation.
Is this really appropriate foryou?" Because the human
resources department reallyisn't qualified to have those
discussions with people and therecord- k eepers aren't going to
do it either.
So I really like that aspect ofthis job, of being able to have
(05:30):
those conversations and makethose recommendations and put
ourselves in the driver's seatso when the people do retire,
they're really grateful for usand all the help that we
provided them along the way toput them in that position.
And so, it's a pretty easytransition when we ask for the
business for them to continuethe relationship with us.
On the personal side, I reallyliked being at--I guess I almost
(05:54):
think of it like the grass rootseffort here.
We're working with these people,helping them to accumulate so
that when one day when they aregoing to make that transition
into retirement that we areright there in the great
position to be able to ask forthat business.
Edward D (06:12):
So you're doing what I'm passionate about--helping
middle America retiredsuccessfully.
Joe W (06:16):
Absolutely.
Edward D (06:17):
That's part of, that's what we love to help advisors
do.
Before you can tell somebodywhat they need to do with you
know, how to allocate theirmoney, you've got to engage the
participant in a meaningful way.
Otherwise they gloss over anddon't engage it.
How are you engagingparticipants towards retirement
readiness?
Joe W (06:36):
That's a great question because nowadays, you know, you
see that there's all thesedifferent programs out there and
financial wellness iseverywhere.
And so, we try to make sure thatwe are using some type of a tool
(06:58):
that will give participants apretty accurate picture of what
their retirement outlook lookslike.
The RetireReady Solutions, theactual TRAK program that we
use--we use that quite a bit inour practice to kind of give
people that outlook.
(07:19):
It presents itself in such asimple way that instead of
presenting someone with a 50page retirement plan document
that they're probably not goingto go through and read all of, I
mean, this is, you know, a niceone pager that they can look and
see,"Okay, do I have any red?"If I don't have any red, I'm in
(07:43):
good shape.
If it's all green, I'm great!"And if we do see the red, we
talk about how we get the redout.
It sounds like a Visinecommercial, but for the most
part, that's what we're reallytrying to do is figuring out how
we get the red out.
That report really helps tostart some really great
(08:06):
conversations around what weneed to be doing for them to get
them where they need to be.
Also it helps us to kind ofincorporate any other things
that they might be doing outsideof the plan.
Edward D (08:21):
I think you're talking about the one page Participant
Gap Report.
It shows them their gaps, showsthem what they need to do and it
gives them a few more options,but really keeps it clear, as
we've tried hard to make it, sothat participant goes there and
you can be proactive in handingit to them versus saying,"Hey,
go out to the portal and figurethis out for yourself."
Joe W (08:42):
Right.
Edward D (08:43):
Do You have a story of, maybe an anecdotal story, of
something that happened recentlywith the participants that said,
"Hey, there's my situation,here's what I need to do."
Joe W (08:53):
Yeah, you know, it's funny because the stuff, it's
all relative.
And you have a participant--oneparticular participant I'm
thinking of making$250,000 ayear and thinking,"Okay, I'm
saving, I have this much savedup and I'm doing great and I
(09:13):
should be able to retire." Butwhat they didn't realize is that
when we start thinking aboutretirement in terms of the
income that you need, we'retrying to target around 75-85%
of what your working income isas far as your income in
retirement.
(09:33):
And he never really thoughtabout it that way.
And so once we started taking alook at what he had and what he
accumulated, because he wascontributing the max to his
401(k) but after running the GapReport, it still wasn't getting
him there.
And so he never really thoughtthat,"Hey, wait a minute.
(09:58):
Even though I'm doing what Ican, I'm contributing into my
plan, I never thought that Iwould come up short." He never
worked with anyone that reallyran the numbers for him to show
him that,"Hey, by the way, ifyou keep doing what you're
doing, it's not enough to beable to provide the type of
(10:20):
income that you're living so youcan maintain your lifestyle in
retirement." So after runningthe report for him--and it was
nice because it was just a onepage report and it showed
everything--and he could seewhere,"Holy cow, all right, I
know I'm doing this and this isstill creating a short fall." It
(10:42):
helped to drive the conversationaround,"What else should I be
doing?" And so in thisparticular case it helped us to
put together a scenario for himwhere he could actually save
outside of the plan to help makeup the shortfall that he was
going to have in retirement.
(11:03):
It helped lead to more assetsand to gathering leads to
additional business with thisparticular client.
So I really like the program.
I really like using it to engagethe customers around their
retirement situations.
Edward D (11:20):
So you have a pretty high net worth, high income
person story there, which isgood because it got him off of
autopilot and said,"This issomething you need to get your
hands on," and not just assumethat giving the max is going to
solve the problem.
I've seen that problem before.
People have called me, advisorsask,"Why isn't this working?"
Exactly that.
Pretty close to that amount ofmoney.
(11:41):
Tell me about a story about amiddle America person that you
know, middle- i ncome$50-100,000that you engaged with, the
report made for them.
Joe W (11:56):
I am thinking about one particular participant that I
work with and she was working oncontributing.
I want to say she had about 3%if I remember correctly, she was
contributing about 3% to herplan.
(12:16):
The employer had a match 100% upto that 3% so that's why she was
doing three.
So, you know, we started lookingat the plan and looking at her
situation and I saw that herbalances were probably around
(12:37):
30,000 or so and she was fairlyyoung.
I mean probably early thirtiesor so, and just not a clue about
this.
And she was just doing the 3%because that's what she told she
needed to do was the 3%--max outwhat your employer is giving
you.
That's the advice that she got,which we see with a lot of
(13:01):
participants.
It's like, yeah, you want tocontribute at least what the
employer's matching, and so alot of people do that.
Once we did the retirementanalysis for her and determined
that about 3%, even with theemployer match, 6% was still not
(13:22):
getting her there.
The nice thing about it is, theGap Analysis gave us a
recommended contribution amount.
It told her basically to raiseher contributions up to 10% to
get her where it needed to be.
And it's really cool because wehave the ability with the
program to adjust theassumptions.
(13:45):
And so for us, we use an 80%income replacement ratio and
then we also are able to includesocial security, but typically
we'll include social security atabout 70% of whatever the actual
benefit that they're supposed toget.
So it really creates action onthe participant's part when we
(14:10):
show it like that, becauseeveryone has it in their minds
that social security just maynot be there in its current form
when they retire.
So running it at a 70%assumption, we never get any
pushback on that.
We've never had one person say,"No, I think I'm going to have
(14:31):
full social security." Ifanything, they go the other way
and say,"Hey, can you run thiswithout social security?" For
her we ran it like that and ithelped us to get a
recommendation to raise thosecontributions up to the 10%
mark.
And you know, for her, goingfrom three to ten was a tough,
(14:52):
tough jump.
We realized that.
And so that sparked additionalconversations around, well,
let's take it a little deeperlook at your finances and what
your budget really looks like.
After doing that, we startedrealizing that there was a lot
(15:12):
more money there that she wasmaking that was basically being
spent, for lack of a betterterm, and could have been
otherwise saved.
And so after going through theexercises of looking at the
budgeting, we found we were ableto find enough cushion there to
(15:35):
where we could raise thosecontributions to--we ended up
around eight--it was 8% that weended up at.
But then what the plan was, isthat getting to that 8% level
now, but in a year from now,we're going to bump it up by 1%
(15:55):
and keep doing that 1% andtiming it out around the time
that her pay raises come.
So that way the impact on her ispretty minimal, but at least it
gets her to that savings levelthat was where she needs to be.
So again, using the program, itjust really helps to drive those
conversations and make sure thatwe're able to get people to
(16:21):
where they need to be.
And it presents itself in such asimple fashion that it's really
easy for them to read and it'snot the 50 page retirement
planning document that reallyintimidates people.
And you know, once they get thathuge binder of stuff, they take
(16:42):
it home and they never look atit again because they just don't
want to have to read through allthat to figure out what they
need to be doing.
At the end of the day they stillcome back to us and say,"What
should I be doing here?" Butthis one page report, it's so
simple.
It makes it really, really easyfor them to understand.
Edward D (17:02):
Yeah, exactly.
And I, I don't want to read, I'ma technical person.
I don't want to read 50 pages.
Joe W (17:07):
Yeah.
Edward D (17:07):
Different perspective, different angle on this.
Many advisors tell us they don'twant, they don't pick up our
software because,"Hey we havethe web portal, we can go to the
portal.
And just tell the participants,go to the portal and figure it
out." What are the advantages ofhaving the Participant Gap
Report for you and yourbusiness?
Joe W (17:23):
You know, being able to run that gap.
I mean going to the portal, wetell them go to the portal and
you know, cause pretty muchevery record- keeper now has a
portal that a participant canuse.
And what I find with theparticipant is they don't use
it.
At the end of the day theystill, for most part are pretty
(17:43):
intimidated by the computer insome cases.
I mean because we're workingfrom, you know, people who are
factory workers in some towns invery, very, very rural
communities to your technologyfirms.
We have a couple of clients thatare in fact technology firms at
(18:05):
technology security firms andit's funny--you would think that
a technology firm--that theywould be all over this stuff and
really know what they were doingbut even still we find they are
not using the portal.
And so when we show up onlocation, in doing our one on
one appointments with theparticipants, we are going
(18:31):
through things with them abouttheir retirement plan and we're
showing them around the websiteand showing them the portal.
And now, unless I'm there doingit with them, they're still not
doing it.
I mean, there's people whereI've seen, we walked into their
website and looked at theretirement plan online and I've
(18:55):
gone back and met with themagain six months later and I
still see that they haven'ttouched it from the last time we
were in there.
And so even though the stuff isthere, people are really not
using it.
So when we, when I'm able tohave these one-on-one
discussions and start talkingmore about,"Look, you need to
(19:20):
retire, we need to figure out ifyou're on track and I've got a
way that I can do thiscalculation for you and it's a
little bit more detailed thanwhat you're seeing in your
portal and I think it presentsitself in such a simple fashion
that you'll be able to follow itand understand it." And so when
we use the Gap Analysis with ourparticipants, we see probably
(19:46):
about a 75 to 80% increase inthe participant outcomes,
whether it be them increasingtheir 401(k) contributions or
perhaps they're engaging with uson some type of a personal
wealth management plan of somesorts.
(20:07):
So I think the tool itself--Imean using it certainly helps to
initiate some type of outcome.
And that's what we're reallyafter with our plans, just to
make sure that people are makingthe adjustments that they need
to make to ensure that they'reon track for a successful
(20:29):
retirement.
Edward D (20:31):
So getting the data from the plan sponsor, how do
you find that process?
Joe W (20:37):
We think it's pretty simple.
I mean, because a lot of thisinformation is things that
they're providing anyway for us,in a census.
And so what we've done isbasically created a template
that all they have to do isbasically cut and paste stuff
into.
And it makes it super easy forthem.
So when we are requesting,because they understand if we're
(20:59):
going to be doing this for theirwhole company that we need the
data and so they have it.
It's just a matter of cutting itfrom one spreadsheet and pasting
it into our spreadsheet.
And once we have thatspreadsheet, at that point it
gets pretty simple to just inputinto the program and a couple
mouse clicks and then we havethe report done for, in some
(21:24):
cases, with one our clients over300 people that we did it with
and it took us next to no timeto really produce those.
Edward D (21:35):
What's been the response from your plan
sponsors?
Joe W (21:38):
They love it because they understand that it actually
creates or drives outcomes withtheir participants to really
think harder about what theyneed to be doing in order to
have a successful retirement.
Because at the end of the day,they want to see their employees
retire because it's prettyexpensive to keep people around.
(22:01):
The aging employees anyway, thatare past their retirement age.
It starts to get a lot moreexpensive.
I thought I saw a studysomewhere that it costs about an
extra$50,000 a year or somethinglike that, to keep employees on
payroll thereafter theirretirement ages because all the
(22:23):
different expenses that comeabout.
So if we can do things to helpthem to do the right things so
that they are not there longerthan they should be, they're all
for it.
Edward D (22:37):
What would you tell another advisor who's just
saying,"Go to the portal that's,that's sufficient." What would
your response to them be?
Joe W (22:45):
I'd say, you might want to rethink that just because
half the time when we tellparticipants to do things,
they're never going to do it.
The only time that they reallythink about the stuff or that
they will do anything about thisstuff is when we're there
walking them through to do it.
(23:07):
Once we leave they're back intotheir normal life.
And so, to ask them to go backinto the website to the portal
when most of them probably don'teven know their login
information, you're not going toget any outcomes that way.
I think also if you have anytype of personal wealth
(23:33):
management business in additionto doing retirement plan
business, you're going to wantto engage that participant with
this program because it's goinghelp do a couple things.
Either one (23:44):
it's going to drive them to increase their
contributions to get closer towhere they need to be.
Or two (23:53):
it's gonna really bring to light any other assets that
they may have out there.
Because one of the things I seea lot of is once I run this
report and it comes back as ashortfall, that customer is
gonna say,"Wait a minute, I'vegot more stuff.
(24:13):
This is only talking about whatI have here.
I've got more stuff." And sothat's going to drive another
conversation where we can starttalking about this other stuff.
You know, where is this otherstuff?
Who's working with you with thisother stuff?
Why aren't they doing thingslike this to where you know what
(24:34):
your current retirementreadiness situation looks like?
And so it helps us to win morebusiness.
So if you're not doing it now, Iwould highly recommend to start
doing it and not just taking theeasy way out and saying,"Yeah,
just go to the portal," becausethey're not going to do it.
Edward D (24:56):
Well, Joe, I really appreciate you taking the time
this morning.
Appreciate you interacting withthese questions and I wish you
the best in today's marketplaceand thank you for your kind
words about our solution.
Joe W (25:07):
Yes, thank you.
Hey, I'm a big fan, so we use itquite a bit here in our practice
and we will continue to.
Welcome everyone.
This is Ed Dressel withRetireReady Solutions for our
podcast.
We have Joe Williams out ofIndianapolis this morning.
I'm excited to have him.
Joe, welcome to our podcast.
Joe W (00:14):
Thank you.
Edward D (00:15):
It's great to have you.
Tell me a little about yourselfbefore we get started.
Joe W (00:18):
Well, I am a financial advisor, also our education
specialist for our firm, CSiAdvisory Services.
We're out of Indianapolis,Indiana.
The firm has been up and runningsince 1971.
And we're actually a retirementfocused firm.
(00:41):
And so my job really is allabout going out and educating
participants around theretirement plan to make sure
they know exactly how it worksand how to really best utilize
it.
Edward D (00:53):
How long have you been with CSi?
Joe W (00:56):
I'm going on a year, a little over a year and a half
now that I've been doing thiswith them.
Edward D (01:01):
And before this?
Joe W (01:02):
Before this I was an advisor at a bank for almost 20
years.
So I've been an advisor forquite awhile.
Edward D (01:13):
What obstacles do you find in your business?
Joe W (01:16):
Obstacles?
Really it's how to establishvalue, you know, when we're
working with customers--orworking with clients
now--because we see theemergence of the robo advisor
and so now there's a muchcheaper solution out there
(01:38):
that's virtual but clients canreally use and now we as
advisors are really having toshow our value when working with
customers to make sure that theyunderstand that by working with
us, the costs associated withworking with us are certainly
(01:59):
justified as opposed tobasically the virtual
experience.
Edward D (02:04):
And what are you doing to, to justify,"Hey you need to
hire an advisor for your plan?"
Joe W (02:10):
Well, it could be a number of things.
I mean really it's all aboutcustomizing the experience to
the client because it'ssomething that they don't
necessarily get with the roboadvisor.
It's more of a plug and playtype situation with robo,
whereas we are providing a lotmore of the customized solutions
(02:32):
for them to where it's moretailored to what their needs
are.
And we are able to kind of thinkoutside the box to ask those
additional questions to really,identify additional needs based
upon the conversations thatwe're having.
And so I think that's reallywhere we start to establish that
(02:54):
value with the customer, youknow, going deeper in making
sure we're having those extendedconversations that are going to
be more fact finding to identifythose needs that they haven't
even really thought of.
Edward D (03:08):
So, I'm going back a little bit on what you said to
me.
You left the bank after 20years, came to CSi you're the
education specialists.
What made you go,"That's the jobfor me."
Joe W (03:19):
Well, I noticed that if we look at what is important to
people in where the majority oftheir investment assets are
really coming from, they'redefinitely with the 401(k).
With the bank as an advisor,some of our biggest tickets that
(03:40):
we had were from 401(k)rollovers and meeting with
people and looking at how these401(k)s were allocated and I
just saw some really horrible,horrible allocations.
And we don't have to think backtoo far to the financial crisis
(04:02):
when the market's dropping 30,40% and you have all of these
folks out there that wereallocated way too heavy in the
stock market.
And so we saw a lot ofretirements that got postponed.
And so in meeting with peopleand looking at these things, I'm
(04:22):
thinking,"Wow, who in the worldis advising these people in
these plans?" And really theanswer was"No one." Very few
advisors have that capability tomake those recommendations over
the investments inside of theretirement plans.
And so with our firm, we arefortunate enough to have the
(04:45):
ability to do that.
And so that was what was reallyattractive to me--to be able to
form the relationships withpeople when they were still in
their working years and guidethem on how to invest the funds
inside of their retirement planso that we get better outcomes
for them when it comes time forthem to retire.
(05:06):
And so that's where my jobis--going in and sitting down
with them and saying,"Let's takea look at this retirement
allocation.
Is this really appropriate foryou?" Because the human
resources department reallyisn't qualified to have those
discussions with people and therecord- k eepers aren't going to
do it either.
So I really like that aspect ofthis job, of being able to have
(05:30):
those conversations and makethose recommendations and put
ourselves in the driver's seatso when the people do retire,
they're really grateful for usand all the help that we
provided them along the way toput them in that position.
And so, it's a pretty easytransition when we ask for the
business for them to continuethe relationship with us.
On the personal side, I reallyliked being at--I guess I almost
(05:54):
think of it like the grass rootseffort here.
We're working with these people,helping them to accumulate so
that when one day when they aregoing to make that transition
into retirement that we areright there in the great
position to be able to ask forthat business.
Edward D (06:12):
So you're doing what I'm passionate about--helping
middle America retiredsuccessfully.
Joe W (06:16):
Absolutely.
Edward D (06:17):
That's part of, that's what we love to help advisors
do.
Before you can tell somebodywhat they need to do with you
know, how to allocate theirmoney, you've got to engage the
participant in a meaningful way.
Otherwise they gloss over anddon't engage it.
How are you engagingparticipants towards retirement
readiness?
Joe W (06:36):
That's a great question because nowadays, you know, you
see that there's all thesedifferent programs out there and
financial wellness iseverywhere.
And so, we try to make sure thatwe are using some type of a tool
(06:58):
that will give participants apretty accurate picture of what
their retirement outlook lookslike.
The RetireReady Solutions, theactual TRAK program that we
use--we use that quite a bit inour practice to kind of give
people that outlook.
(07:19):
It presents itself in such asimple way that instead of
presenting someone with a 50page retirement plan document
that they're probably not goingto go through and read all of, I
mean, this is, you know, a niceone pager that they can look and
see,"Okay, do I have any red?"If I don't have any red, I'm in
(07:43):
good shape.
If it's all green, I'm great!"And if we do see the red, we
talk about how we get the redout.
It sounds like a Visinecommercial, but for the most
part, that's what we're reallytrying to do is figuring out how
we get the red out.
That report really helps tostart some really great
(08:06):
conversations around what weneed to be doing for them to get
them where they need to be.
Also it helps us to kind ofincorporate any other things
that they might be doing outsideof the plan.
Edward D (08:21):
I think you're talking about the one page Participant
Gap Report.
It shows them their gaps, showsthem what they need to do and it
gives them a few more options,but really keeps it clear, as
we've tried hard to make it, sothat participant goes there and
you can be proactive in handingit to them versus saying,"Hey,
go out to the portal and figurethis out for yourself."
Joe W (08:42):
Right.
Edward D (08:43):
Do You have a story of, maybe an anecdotal story, of
something that happened recentlywith the participants that said,
"Hey, there's my situation,here's what I need to do."
Joe W (08:53):
Yeah, you know, it's funny because the stuff, it's
all relative.
And you have a participant--oneparticular participant I'm
thinking of making$250,000 ayear and thinking,"Okay, I'm
saving, I have this much savedup and I'm doing great and I
(09:13):
should be able to retire." Butwhat they didn't realize is that
when we start thinking aboutretirement in terms of the
income that you need, we'retrying to target around 75-85%
of what your working income isas far as your income in
retirement.
(09:33):
And he never really thoughtabout it that way.
And so once we started taking alook at what he had and what he
accumulated, because he wascontributing the max to his
401(k) but after running the GapReport, it still wasn't getting
him there.
And so he never really thoughtthat,"Hey, wait a minute.
(09:58):
Even though I'm doing what Ican, I'm contributing into my
plan, I never thought that Iwould come up short." He never
worked with anyone that reallyran the numbers for him to show
him that,"Hey, by the way, ifyou keep doing what you're
doing, it's not enough to beable to provide the type of
(10:20):
income that you're living so youcan maintain your lifestyle in
retirement." So after runningthe report for him--and it was
nice because it was just a onepage report and it showed
everything--and he could seewhere,"Holy cow, all right, I
know I'm doing this and this isstill creating a short fall." It
(10:42):
helped to drive the conversationaround,"What else should I be
doing?" And so in thisparticular case it helped us to
put together a scenario for himwhere he could actually save
outside of the plan to help makeup the shortfall that he was
going to have in retirement.
(11:03):
It helped lead to more assetsand to gathering leads to
additional business with thisparticular client.
So I really like the program.
I really like using it to engagethe customers around their
retirement situations.
Edward D (11:20):
So you have a pretty high net worth, high income
person story there, which isgood because it got him off of
autopilot and said,"This issomething you need to get your
hands on," and not just assumethat giving the max is going to
solve the problem.
I've seen that problem before.
People have called me, advisorsask,"Why isn't this working?"
Exactly that.
Pretty close to that amount ofmoney.
(11:41):
Tell me about a story about amiddle America person that you
know, middle- i ncome$50-100,000that you engaged with, the
report made for them.
Joe W (11:56):
I am thinking about one particular participant that I
work with and she was working oncontributing.
I want to say she had about 3%if I remember correctly, she was
contributing about 3% to herplan.
(12:16):
The employer had a match 100% upto that 3% so that's why she was
doing three.
So, you know, we started lookingat the plan and looking at her
situation and I saw that herbalances were probably around
(12:37):
30,000 or so and she was fairlyyoung.
I mean probably early thirtiesor so, and just not a clue about
this.
And she was just doing the 3%because that's what she told she
needed to do was the 3%--max outwhat your employer is giving
you.
That's the advice that she got,which we see with a lot of
(13:01):
participants.
It's like, yeah, you want tocontribute at least what the
employer's matching, and so alot of people do that.
Once we did the retirementanalysis for her and determined
that about 3%, even with theemployer match, 6% was still not
(13:22):
getting her there.
The nice thing about it is, theGap Analysis gave us a
recommended contribution amount.
It told her basically to raiseher contributions up to 10% to
get her where it needed to be.
And it's really cool because wehave the ability with the
program to adjust theassumptions.
(13:45):
And so for us, we use an 80%income replacement ratio and
then we also are able to includesocial security, but typically
we'll include social security atabout 70% of whatever the actual
benefit that they're supposed toget.
So it really creates action onthe participant's part when we
(14:10):
show it like that, becauseeveryone has it in their minds
that social security just maynot be there in its current form
when they retire.
So running it at a 70%assumption, we never get any
pushback on that.
We've never had one person say,"No, I think I'm going to have
(14:31):
full social security." Ifanything, they go the other way
and say,"Hey, can you run thiswithout social security?" For
her we ran it like that and ithelped us to get a
recommendation to raise thosecontributions up to the 10%
mark.
And you know, for her, goingfrom three to ten was a tough,
(14:52):
tough jump.
We realized that.
And so that sparked additionalconversations around, well,
let's take it a little deeperlook at your finances and what
your budget really looks like.
After doing that, we startedrealizing that there was a lot
(15:12):
more money there that she wasmaking that was basically being
spent, for lack of a betterterm, and could have been
otherwise saved.
And so after going through theexercises of looking at the
budgeting, we found we were ableto find enough cushion there to
(15:35):
where we could raise thosecontributions to--we ended up
around eight--it was 8% that weended up at.
But then what the plan was, isthat getting to that 8% level
now, but in a year from now,we're going to bump it up by 1%
(15:55):
and keep doing that 1% andtiming it out around the time
that her pay raises come.
So that way the impact on her ispretty minimal, but at least it
gets her to that savings levelthat was where she needs to be.
So again, using the program, itjust really helps to drive those
conversations and make sure thatwe're able to get people to
(16:21):
where they need to be.
And it presents itself in such asimple fashion that it's really
easy for them to read and it'snot the 50 page retirement
planning document that reallyintimidates people.
And you know, once they get thathuge binder of stuff, they take
(16:42):
it home and they never look atit again because they just don't
want to have to read through allthat to figure out what they
need to be doing.
At the end of the day they stillcome back to us and say,"What
should I be doing here?" Butthis one page report, it's so
simple.
It makes it really, really easyfor them to understand.
Edward D (17:02):
Yeah, exactly.
And I, I don't want to read, I'ma technical person.
I don't want to read 50 pages.
Joe W (17:07):
Yeah.
Edward D (17:07):
Different perspective, different angle on this.
Many advisors tell us they don'twant, they don't pick up our
software because,"Hey we havethe web portal, we can go to the
portal.
And just tell the participants,go to the portal and figure it
out." What are the advantages ofhaving the Participant Gap
Report for you and yourbusiness?
Joe W (17:23):
You know, being able to run that gap.
I mean going to the portal, wetell them go to the portal and
you know, cause pretty muchevery record- keeper now has a
portal that a participant canuse.
And what I find with theparticipant is they don't use
it.
At the end of the day theystill, for most part are pretty
(17:43):
intimidated by the computer insome cases.
I mean because we're workingfrom, you know, people who are
factory workers in some towns invery, very, very rural
communities to your technologyfirms.
We have a couple of clients thatare in fact technology firms at
(18:05):
technology security firms andit's funny--you would think that
a technology firm--that theywould be all over this stuff and
really know what they were doingbut even still we find they are
not using the portal.
And so when we show up onlocation, in doing our one on
one appointments with theparticipants, we are going
(18:31):
through things with them abouttheir retirement plan and we're
showing them around the websiteand showing them the portal.
And now, unless I'm there doingit with them, they're still not
doing it.
I mean, there's people whereI've seen, we walked into their
website and looked at theretirement plan online and I've
(18:55):
gone back and met with themagain six months later and I
still see that they haven'ttouched it from the last time we
were in there.
And so even though the stuff isthere, people are really not
using it.
So when we, when I'm able tohave these one-on-one
discussions and start talkingmore about,"Look, you need to
(19:20):
retire, we need to figure out ifyou're on track and I've got a
way that I can do thiscalculation for you and it's a
little bit more detailed thanwhat you're seeing in your
portal and I think it presentsitself in such a simple fashion
that you'll be able to follow itand understand it." And so when
we use the Gap Analysis with ourparticipants, we see probably
(19:46):
about a 75 to 80% increase inthe participant outcomes,
whether it be them increasingtheir 401(k) contributions or
perhaps they're engaging with uson some type of a personal
wealth management plan of somesorts.
(20:07):
So I think the tool itself--Imean using it certainly helps to
initiate some type of outcome.
And that's what we're reallyafter with our plans, just to
make sure that people are makingthe adjustments that they need
to make to ensure that they'reon track for a successful
(20:29):
retirement.
Edward D (20:31):
So getting the data from the plan sponsor, how do
you find that process?
Joe W (20:37):
We think it's pretty simple.
I mean, because a lot of thisinformation is things that
they're providing anyway for us,in a census.
And so what we've done isbasically created a template
that all they have to do isbasically cut and paste stuff
into.
And it makes it super easy forthem.
So when we are requesting,because they understand if we're
(20:59):
going to be doing this for theirwhole company that we need the
data and so they have it.
It's just a matter of cutting itfrom one spreadsheet and pasting
it into our spreadsheet.
And once we have thatspreadsheet, at that point it
gets pretty simple to just inputinto the program and a couple
mouse clicks and then we havethe report done for, in some
(21:24):
cases, with one our clients over300 people that we did it with
and it took us next to no timeto really produce those.
Edward D (21:35):
What's been the response from your plan
sponsors?
Joe W (21:38):
They love it because they understand that it actually
creates or drives outcomes withtheir participants to really
think harder about what theyneed to be doing in order to
have a successful retirement.
Because at the end of the day,they want to see their employees
retire because it's prettyexpensive to keep people around.
(22:01):
The aging employees anyway, thatare past their retirement age.
It starts to get a lot moreexpensive.
I thought I saw a studysomewhere that it costs about an
extra$50,000 a year or somethinglike that, to keep employees on
payroll thereafter theirretirement ages because all the
(22:23):
different expenses that comeabout.
So if we can do things to helpthem to do the right things so
that they are not there longerthan they should be, they're all
for it.
Edward D (22:37):
What would you tell another advisor who's just
saying,"Go to the portal that's,that's sufficient." What would
your response to them be?
Joe W (22:45):
I'd say, you might want to rethink that just because
half the time when we tellparticipants to do things,
they're never going to do it.
The only time that they reallythink about the stuff or that
they will do anything about thisstuff is when we're there
walking them through to do it.
(23:07):
Once we leave they're back intotheir normal life.
And so, to ask them to go backinto the website to the portal
when most of them probably don'teven know their login
information, you're not going toget any outcomes that way.
I think also if you have anytype of personal wealth
(23:33):
management business in additionto doing retirement plan
business, you're going to wantto engage that participant with
this program because it's goinghelp do a couple things.
Either one (23:44):
it's going to drive them to increase their
contributions to get closer towhere they need to be.
Or two (23:53):
it's gonna really bring to light any other assets that
they may have out there.
Because one of the things I seea lot of is once I run this
report and it comes back as ashortfall, that customer is
gonna say,"Wait a minute, I'vegot more stuff.
(24:13):
This is only talking about whatI have here.
I've got more stuff." And sothat's going to drive another
conversation where we can starttalking about this other stuff.
You know, where is this otherstuff?
Who's working with you with thisother stuff?
Why aren't they doing thingslike this to where you know what
(24:34):
your current retirementreadiness situation looks like?
And so it helps us to win morebusiness.
So if you're not doing it now, Iwould highly recommend to start
doing it and not just taking theeasy way out and saying,"Yeah,
just go to the portal," becausethey're not going to do it.
Edward D (24:56):
Well, Joe, I really appreciate you taking the time
this morning.
Appreciate you interacting withthese questions and I wish you
the best in today's marketplaceand thank you for your kind
words about our solution.
Joe W (25:07):
Yes, thank you.
Hey, I'm a big fan, so we use itquite a bit here in our practice
and we will continue to.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.