October 22, 2019 • 22 mins
As head of corporate retirement plans, Jonathon Schultheiss shares how their 401(k) management feeds into their wealth management services. He highlights the success they have had with participants and plan sponsors, particularly through the use of TRAK's one page Gap Analysis Report.
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Episode Transcript
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Edward D (00:06):
Welcome everyone.
This is Edward Dressel,president, owner of RetireReady
Solutions.
I'm excited today to kick offour podcast series with Jonathon
Schultheiss, an advisor out ofGreensboro, North Carolina with
Gate City Advisors.
Did I get that right?
Jonathan S (00:18):
You got it right.
Edward D (00:21):
It's wonderful to have your Jonathon, welcome.
Good to have you here.
Jonathan S (00:24):
Yeah, thanks for having me.
Edward D (00:27):
You bet.
I don't like to talk about ourself, I like to make these
really about the advisors.
So why don't you tell thoselistening a little bit about
yourself and your business?
Jonathan S (00:36):
Absolutely.
Gate City Advisors really hastwo core focuses and we have a
wealth management practice, butthen we also have our corporate
retirement plan practice and I'mthe partner in charge of our
corporate retirement planpractice.
And so a lot of what we do iseven though 100% of my time is
spent in the 401(k) side, theother thing that we try to do
(01:00):
too is we try to s pill over andfeed into the wealth management
side.
And we do that through t ryingto work with the C suite, but we
have also found a nice littleniche and a sweet spot in really
developing relationships andworking with the individual
(01:20):
participants outside of the Csuite.
And one of the ways we do it isusing your tool.
Edward D (01:28):
I hear that from advisors,"there's not a lot of
money to be made in 401(k) planswith the participants.
It's all about the C suite".
Why don't you tell a dvisors whoare listening, how are you
finding any business inside ofthe participant model a nd
working with participants?
Jonathan S (01:46):
So one of the things that we try to do with every one
of our plans is we deliver whatwe call the on track reports.
And that is your basic one pagegap analysis that you guys have.
But we brand it to more of theGate City theme.
And so we really play off of ofthe train theme here and its
(02:09):
interesting Gates City Advisorsthat Greensboro is called the
Gate City.
And even very few people here inGreensboro understand why it's
called the Gate City.
But it goes back to the 1800'swhen the governor of the state,
John Motley Morehead, actuallypetitioned all the railroads
that come to one centrallocation.
(02:30):
And that central location is theDepot in Greensburg, which is
still at working Depot today andit's just a couple of blocks
from our office.
And so if you wanted to goanywhere in this state, you had
to come to Greensboro to getthere.
And so it became known as theGate city.
And so we actually play off ofthat theme and we say, Hey, when
our clients are trying to get toretirement, they need to come
(02:52):
through Gate City Advisors toget there.
And so we play off of that themeand we tell that story and then
tell all of our plan sponsorsthat we have what we call on
track reports and on trackreports are basically one page
gap analysis that we give toeach participant that tells them
(03:13):
if they are on track forretirement or not.
And so we use your tool, wedownload the spreadsheets, we
get data from the plan sponsorsand we generate these one page
reports.
And then we have a groupmeeting.
And in that group meeting, thething that we do is we actually
take that one page report, weput it in an envelope with the
(03:37):
participant's name on it and wehand it out to the participants
as they come into the room.
And so we tell them, hey, holdoff, there's personal
information in here, don't openyour report until we can kind of
show you what's on here.
And then we put a sample ontrack report up in the front of
the room, usually on a TV or aprojector or whatever.
(04:00):
And so we actually run throughhow to read these reports.
And as we get to the bottom ofthe report, you'll know there's
a thing on there that says otherpossible solutions.
And i t'll say if you're not ontrack and here's a couple other
things that you can do.
And one of the things on thereis h ave an additional lump sum
(04:21):
today.
And so we really drive that homeand say, and it's funny, I
actually say this in the meetingand it's true, but I've never
done a meeting where I haven'thad at least three or four
people sitting in the room raise their hand and go, H ey
(04:41):
Jonathon, I have exactly thatmuch or maybe a little bit more
than that in my old 401(k).
The thing that we do is we say,Hey, if y ou just get me your
statement we'll be happy toinclude it and help you get it
rolled over.
And so just by doing thosemeetings with groups w e see a
(05:01):
lot of those participants emailus statements, they'll get a s t
atement.
And we usually have a minimumsize that we deal with.
A lot of times if it's smallerthan say between 30 and 50,000,
we'll just roll it into the401(k).
Otherwise, if it's much morethan that we'll have a
(05:24):
conversation about, you can roll it to yo ur 401(k) or you
could do this or you could dothis.
And so we give them multiplechoices on which one makes sense
for their situation, but a lotof times just from developing
the relationship, by having thatrapport and having that
conversation and then givingoptions, i t's interesting, we
(05:47):
pick up quite a bit of businessout of the individual rank and
file employees.
Edward D (05:54):
So there's a couple of questions, for everyone that
sounds like a lot more work thanmost advisors want to do.
Do you find meeting witheveryone a lot?
Jonathan S (06:08):
Usually when we're doing a group meeting and we're
doing that, you'll tell thepeople who are engaged, right?
There's people who are notengaged and they're not going to
come meet with you, but thepeople who are engaged are great
opportunities.
And so one of the things that wedo is we actually have some of
our advisors that work on thewealth management side and
(06:30):
they're the ones that will meetindividual one-on-one with
participants.
And yeah, it'll take a full daydepending on the size of the
company, but just the ancillaryopportunities that you get out
of that are well worth it.
So yeah, you're going to put ina hard day's work meeting with
with as many participants as youcan.
(06:50):
But a lot of those participants,and what's interesting is when
you go to a different level witha participant and they start to
open up with you and they startto show you, Oh yeah, I have
this, Oh by the way, I have thistoo.
We've met with some participantswho you would think there's no
way they have that kind ofmoney, but they'll end up with
$400,000 and$500,000 accountsthat they really need help with.
(07:16):
And so yeah, you gotta do alittle bit of work on the front
end, but man, it's so worth itwhen you start to see the
opportunities that come from it.
So not going to lie, I mean itis work, but it's so worth it.
Edward D (07:31):
And I've heard that same thing, that TRAK is a good
filtering, the reports are agood filter into that one page
that will get people engagedthat you want to talk to.
And the people who don't want totalk are generally, you don't
want to talk to aren't engagedbecause they don't have the
outside assets.
Jonathan S (07:43):
Yeah.
It's funny, most of the timewhen we sit down and somebody is
concerned about having enoughmoney for retirement, they
didn't just become concerned.
They've been concerned for awhile and they tend to be super
savers as well.
And so when somebody is reallyengaged and want to have a
conversation, those tend to besome of our best opportunities.
Edward D (08:07):
So tell me a little bit, I mean you're using TRAK,
you're bringing TRAK to themeetings, the reports, that
one-page gap report, which isreally popular.
And there'll be a link to it, ifyour getting this off the
website there will be be a linknext to that to see a sample of
it.
But a lot of advisors just go,"I've got the portal, I let them
go there".
Contrast using the portal versususing the one page gap report.
Jonathan S (08:30):
I like using the one page versus the portal and I
think is more probably apersonal preference, but it's
one of those things where I knowpeople are coming into a room
and I know that they're going towalk away with the report.
And I feel like we have moresuccess by actually delivering
(08:54):
that report and participantsdon't have to do anything about
it.
So when they come into a meetingthey get an envelope.
And one of my favorite things todo is, I share a statistic and I
say the average American spendsmore time planning for one
annual vacation than they dotheir entire retirement.
And when I say that, it's sofunny, I look around the room
(09:16):
and there'll be like a third ofthe people in there shaking
their head yes and kind ofpointing to themselves g oing, y
ep, I'm one of those.
And so what I do is I say,listen, at the end of the day
today, you guys are no longergoing to be that statistic
because you're going to leavewith the report that's going to
show you what you need to do toget on track for retirement.
And so I think while you havethem there and you can put a
(09:39):
report in their hand, we feellike we get more success that
way.
So it takes a little bit of workon my a ssistant to generate the
reports and put them inenvelopes.
At the end of the day, oncethose people have become
engaged, the amount of businessthat we get out of it, in my
opinion, way more than pays forherself.
(10:01):
Now I don't know, the portalmight be a method of using that
works well.
But we've had success here andwe k ind o f stick with that.
Edward D (10:12):
And I always tell advisors, you being proactive in
the most important part of theplan rather than being passive,
which is"how do I retiresuccessfully?" And you're active
there and I hear from advisorsthat that's helping them.
The other part, the objection Ihear is" I just can't get the
data".
How are you getting the datafrom the plan sponsor to create
(10:33):
these reports?
Jonathan S (10:35):
So I think you have to have buy in from the plan
sponsor on the front end.
And we've actually included theon track reports as a part of
our sales process.
When we're going through thesales presentation, we're
educating the plan sponsor onthat and we're getting the buy
in on the front end.
(10:56):
Even in our committee meetingswhen we are reviewing the
retirement plan, they understandthat once a year we are going to
do these on track reports.
And there's some great back endstuff that TRAK has too where we
can go in and run plan levelreports and often will bring
(11:16):
those plan level reports andexplain that Hey, this plan
level report, it gives us kindof the overview of the plan.
But each individuals report wecan bring out of the system here
too and deliver to individualsand get them engaged and we can
see progress.
We talk about it as a overallprocess and when you get buy in
(11:36):
at the plan level, it makes itso much easier.
And there's been time when we'vegone to the payroll manager and
we've said, Hey, we need salaryand we need this, and that
payroll manager will sometimeskind of throw up a red flag and
go, I don't know about this.
And we have copied in the CFOand the payroll manager and
(11:58):
said, Hey, we're needing thesereports like we talked about.
Would you mind just givingauthorization to the payroll
person to give us this data?
And once the CFO or whateversays it's okay to give them the
data, then we'd get it.
So we've had occasions whenthere's been a little bit of
resistance, but I think thatresistance is really taken care
(12:20):
of if you have thoseconversations at the plan level
and the committee level and theyunderstand the intent of the
reports because most of thecommittees, they see a lot of
value in getting their ownreports.
There's been times where I'veshown up to meetings and some of
my committee members comerunning over to me and go,"let
me have my report, I want to seemy report".
So they're excited about gettingthe reports as well.
Edward D (12:43):
That's awesome.
Jonathan S (12:45):
I think the more and more that you do it, the more
they come to look for it.
And it's funny, I've gotcompanies that we go to now, and
this is funny, we showed up anddid one a couple months ago and
one of the participants showedup with three previous reports,
"here's my report from last yearand here's a year before and
(13:07):
here's the year before that".
And they were able to show howthey were trending getting
better prepared for retirement.
So once you've created that kindof a culture where it's
expected, then the participantslook forward to it.
And even some of the committeemembers look forward to getting
their reports.
Edward D (13:27):
So forgive me, I'm not a plan advisor, but I can't
imagine them having any piece ofpaper for three years and
bringing it to a meeting.
Does that happen anywhere else?
What else do you give them thatthey have three years later?
Jonathan S (13:41):
I can't think of anything, but I can think of at
least four people at differentcompanies that have shown up
with their past reports.
I don't know that it's theoriginal piece of paper, but
maybe they scan it and save itin a document somewhere, I don't
know.
But they have shown up and we'velooked at the reports and it's
(14:02):
funny that we had some backbefore we branded it with our
Gates City logo stuff on it.
They brought some of the oldreports and it's funny to look
at them and see how we'vechanged it up over the years.
Edward D (14:13):
That's a great story.
You're not the only advisorthat's told me that, but it's
just three years of data, that'spretty stunning.
Kind of fun to be there in theroom when they're doing that.
It's like, hey, have we engagedthem?
I think they're engaged.
Tell me about one of yoursuccessful participant meetings,
what did it look like?
Jonathan S (14:33):
So, you know what's interesting?
I can remember probably one ofmy favorite stories of using on
track reports is I actually wentthrough and gave a presentation
and was talking about it.
And at the end of thepresentation I had a lady that
came up to me and she wasprobably in her mid, early
thirties, and she brought herreport up and I looked at it and
(14:55):
I said, Hey, congratulations,you are on track to replace 100%
of your income at age 67.
And she looked at me and she waslike, 67?
I don't want to retire 67.
She says I want to retire at 55.
And I remember going, oh wow,okay, great, let's sit down.
(15:18):
And I actually pulled up theTRAK software and was typing it
in and I couldn't quite get herto 55.
I tried a lot of things andsaving more and this, that and
another.
However, I was able to get herto 57.
And so it was so interestingthat you see how engaged she was
(15:39):
and right there, this company,the plan sponsor would actually
give us paperwork for them tomake increases so we had an
increase form and she bumped upher contribution by like 2%
right there on the spot.
So she was able to retire at 57or whatever it was.
So it was pretty cool actuallyseeing people getting engaged
(16:04):
with these things.
Edward D (16:06):
Do you see success when you go back to the same
people the second year in a row,the third year in a row, you
shared some of it, but whatother success are you seeing
there?
Jonathan S (16:16):
Yeah, I do, I see a lot of success with participants
who, like I said, stay engagedin and really bring those
reports back and have thoseconversations.
And I'll tell everybody in themeeting, I said,"the further
away from retirement you are", Isaid,"it's a moving target".
This report actually becomesmore and more accurate every
(16:40):
year that we get closer to yourretirement.
If you will engage with us, weare more than happy to provide
this value.
I love saying this in a meetingbecause I think it helps with
full fee disclosure stuff too, Ialways say, listen, there's no
additional costs for you to comeand see us and do these reports.
(17:03):
And I'll say there are fees thatyou pay on your 401(k) that pay
us to deliver these reports andif you want to continue to pay
us and not use us, we reallyappreciate it.
Thanks.
Thanks for inviting us.
And everybody kind of chuckles.
And then I said, but if you wantto get the value out of the fees
that you're paying, then put usto work.
(17:24):
Come and challenge us and let uscustomize these reports for you.
And when you talk about it in away like that, that people go,
I'm already paying these people,I might as well be taking
advantage of what they have.
And that is a couple things thathappens there too, is we bring
light to the fee disclosure.
(17:45):
It really helps us in ancillarybusiness too when we say,
listen, you're already paying uson your 401(k), you might as
well let us take a look at thatEdward Jones account that you
have or Merrill Lynch accountthat you have because you're
already paying for this service.
Why don't we include it and seehow it plays out into your
(18:07):
overall picture.
And I'll say that's how we get alot of ancillary business.
Edward D (18:16):
That's excellent.
Sounds like a good engagingprocess with participants.
What's been the response fromthe plan sponsors or do you have
a story you can tell about asatisfied plan sponsor?
Jonathan S (18:27):
You know what's interesting, I had a plan a
couple of years back that hiredus.
It was funny because in thesales process we thought that
they weren't really interestedin employee education.
And so one of the things that wedid is we said, okay, we have
these reports, we're still gonnaleave it in the presentation and
(18:47):
kind of have a conversationabout it.
And so we talked about the oldtrack reports and gave examples
to everybody that was in thesales presentation.
And then probably six monthslater after they had hired us
and we'd on boarded them andeverything else, I'm actually
doing some stuff with the CFOand I'm having a conversation.
I said, Hey, can I just ask yousomething?
And I said, what made you chooseus over that competitor?
(19:11):
And that competitor is anational competitor and very,
very strong firm.
I said, what made you choose usover them?
And she said, we really likedthat one page report that you
gave everybody and now yourcompetitor had something like
that, but it was like fivepages.
(19:33):
But we really liked that yourswas one page and it was super
simple.
And it's so funny that in mymind I'm going, but in the
discovery process, before thesales pitch you told me that
wasn't important, but t hat'sone of the reasons that you
hired me.
So I thought it was interestingand so now i n every
presentation I make sure that weleave the talking about on track
(19:56):
reports in there.
I think making it a part of thesales process and then when you
deliver it and they see thevalue, and not only that, but
plan sponsors that we've done,our total process have gotten
such great feedback from theemployees that it's really
helped a lot.
(20:16):
And so when an employee says,man, I really did not want to
come to this meeting b ecause Ithought it was just g oing t o
be a very boring 401(k) meeting.
I'm so glad that I did becausenow I have this report and I
know what I need to do to be ontrack for retirement.
When a participant tells theplan sponsor that man, that's
better than me telling them.
(20:37):
That's actually their employeetelling them.
Edward D (20:42):
What differences has that one page gap report made to
your business?
Jonathan S (20:47):
If I had to quantify in a number, I would probably
say it's in excess of$500,000 ayear in revenue.
Just because the amount ofancillary business that we get
out of our retirement plans justfrom using it and that we've
(21:08):
been using it year over year andit's really been a process that
we've, we've perfected over theyears.
But I would say as far as returnon investment for what I pay for
that tool, man, it's beenexponential.
Like I said, probably just offthe top of my head, I would
(21:29):
assume at least$500,000 ofrevenue.
I bet if I actually trulycalculate it is probably more
than that.
Edward D (21:38):
Any other thoughts before we wrap up?
Any comments?
Jonathan S (21:43):
I would just say keep doing what you're doing.
I really appreciate that youguys are innovating and you're
coming out with new, like theportal and different things like
that that really tries to helpadvisors.
I'm so glad that I actuallystumbled across this tool.
(22:05):
So I really appreciateeverything that you guys do.
Edward D (22:09):
Well, Jonathan, I appreciate you taking the time
today.
It's Jonathon Schultheiss outof, I want to say gateway city,
but it's Greensboro.
Jonathan S (22:17):
Yeah.
Gate City Advisers.
Edward D (22:20):
it's great to have you here and I wish you the best in
2019.
And thanks for your time todayto share about how TRAK has
affected you in working withparticipants in the 401(k) plan
side.
Thank you everybody forlistening, have a great day.
Welcome everyone.
This is Edward Dressel,president, owner of RetireReady
Solutions.
I'm excited today to kick offour podcast series with Jonathon
Schultheiss, an advisor out ofGreensboro, North Carolina with
Gate City Advisors.
Did I get that right?
Jonathan S (00:18):
You got it right.
Edward D (00:21):
It's wonderful to have your Jonathon, welcome.
Good to have you here.
Jonathan S (00:24):
Yeah, thanks for having me.
Edward D (00:27):
You bet.
I don't like to talk about ourself, I like to make these
really about the advisors.
So why don't you tell thoselistening a little bit about
yourself and your business?
Jonathan S (00:36):
Absolutely.
Gate City Advisors really hastwo core focuses and we have a
wealth management practice, butthen we also have our corporate
retirement plan practice and I'mthe partner in charge of our
corporate retirement planpractice.
And so a lot of what we do iseven though 100% of my time is
spent in the 401(k) side, theother thing that we try to do
(01:00):
too is we try to s pill over andfeed into the wealth management
side.
And we do that through t ryingto work with the C suite, but we
have also found a nice littleniche and a sweet spot in really
developing relationships andworking with the individual
(01:20):
participants outside of the Csuite.
And one of the ways we do it isusing your tool.
Edward D (01:28):
I hear that from advisors,"there's not a lot of
money to be made in 401(k) planswith the participants.
It's all about the C suite".
Why don't you tell a dvisors whoare listening, how are you
finding any business inside ofthe participant model a nd
working with participants?
Jonathan S (01:46):
So one of the things that we try to do with every one
of our plans is we deliver whatwe call the on track reports.
And that is your basic one pagegap analysis that you guys have.
But we brand it to more of theGate City theme.
And so we really play off of ofthe train theme here and its
(02:09):
interesting Gates City Advisorsthat Greensboro is called the
Gate City.
And even very few people here inGreensboro understand why it's
called the Gate City.
But it goes back to the 1800'swhen the governor of the state,
John Motley Morehead, actuallypetitioned all the railroads
that come to one centrallocation.
(02:30):
And that central location is theDepot in Greensburg, which is
still at working Depot today andit's just a couple of blocks
from our office.
And so if you wanted to goanywhere in this state, you had
to come to Greensboro to getthere.
And so it became known as theGate city.
And so we actually play off ofthat theme and we say, Hey, when
our clients are trying to get toretirement, they need to come
(02:52):
through Gate City Advisors toget there.
And so we play off of that themeand we tell that story and then
tell all of our plan sponsorsthat we have what we call on
track reports and on trackreports are basically one page
gap analysis that we give toeach participant that tells them
(03:13):
if they are on track forretirement or not.
And so we use your tool, wedownload the spreadsheets, we
get data from the plan sponsorsand we generate these one page
reports.
And then we have a groupmeeting.
And in that group meeting, thething that we do is we actually
take that one page report, weput it in an envelope with the
(03:37):
participant's name on it and wehand it out to the participants
as they come into the room.
And so we tell them, hey, holdoff, there's personal
information in here, don't openyour report until we can kind of
show you what's on here.
And then we put a sample ontrack report up in the front of
the room, usually on a TV or aprojector or whatever.
(04:00):
And so we actually run throughhow to read these reports.
And as we get to the bottom ofthe report, you'll know there's
a thing on there that says otherpossible solutions.
And i t'll say if you're not ontrack and here's a couple other
things that you can do.
And one of the things on thereis h ave an additional lump sum
(04:21):
today.
And so we really drive that homeand say, and it's funny, I
actually say this in the meetingand it's true, but I've never
done a meeting where I haven'thad at least three or four
people sitting in the room raise their hand and go, H ey
(04:41):
Jonathon, I have exactly thatmuch or maybe a little bit more
than that in my old 401(k).
The thing that we do is we say,Hey, if y ou just get me your
statement we'll be happy toinclude it and help you get it
rolled over.
And so just by doing thosemeetings with groups w e see a
(05:01):
lot of those participants emailus statements, they'll get a s t
atement.
And we usually have a minimumsize that we deal with.
A lot of times if it's smallerthan say between 30 and 50,000,
we'll just roll it into the401(k).
Otherwise, if it's much morethan that we'll have a
(05:24):
conversation about, you can roll it to yo ur 401(k) or you
could do this or you could dothis.
And so we give them multiplechoices on which one makes sense
for their situation, but a lotof times just from developing
the relationship, by having thatrapport and having that
conversation and then givingoptions, i t's interesting, we
(05:47):
pick up quite a bit of businessout of the individual rank and
file employees.
Edward D (05:54):
So there's a couple of questions, for everyone that
sounds like a lot more work thanmost advisors want to do.
Do you find meeting witheveryone a lot?
Jonathan S (06:08):
Usually when we're doing a group meeting and we're
doing that, you'll tell thepeople who are engaged, right?
There's people who are notengaged and they're not going to
come meet with you, but thepeople who are engaged are great
opportunities.
And so one of the things that wedo is we actually have some of
our advisors that work on thewealth management side and
(06:30):
they're the ones that will meetindividual one-on-one with
participants.
And yeah, it'll take a full daydepending on the size of the
company, but just the ancillaryopportunities that you get out
of that are well worth it.
So yeah, you're going to put ina hard day's work meeting with
with as many participants as youcan.
(06:50):
But a lot of those participants,and what's interesting is when
you go to a different level witha participant and they start to
open up with you and they startto show you, Oh yeah, I have
this, Oh by the way, I have thistoo.
We've met with some participantswho you would think there's no
way they have that kind ofmoney, but they'll end up with
$400,000 and$500,000 accountsthat they really need help with.
(07:16):
And so yeah, you gotta do alittle bit of work on the front
end, but man, it's so worth itwhen you start to see the
opportunities that come from it.
So not going to lie, I mean itis work, but it's so worth it.
Edward D (07:31):
And I've heard that same thing, that TRAK is a good
filtering, the reports are agood filter into that one page
that will get people engagedthat you want to talk to.
And the people who don't want totalk are generally, you don't
want to talk to aren't engagedbecause they don't have the
outside assets.
Jonathan S (07:43):
Yeah.
It's funny, most of the timewhen we sit down and somebody is
concerned about having enoughmoney for retirement, they
didn't just become concerned.
They've been concerned for awhile and they tend to be super
savers as well.
And so when somebody is reallyengaged and want to have a
conversation, those tend to besome of our best opportunities.
Edward D (08:07):
So tell me a little bit, I mean you're using TRAK,
you're bringing TRAK to themeetings, the reports, that
one-page gap report, which isreally popular.
And there'll be a link to it, ifyour getting this off the
website there will be be a linknext to that to see a sample of
it.
But a lot of advisors just go,"I've got the portal, I let them
go there".
Contrast using the portal versususing the one page gap report.
Jonathan S (08:30):
I like using the one page versus the portal and I
think is more probably apersonal preference, but it's
one of those things where I knowpeople are coming into a room
and I know that they're going towalk away with the report.
And I feel like we have moresuccess by actually delivering
(08:54):
that report and participantsdon't have to do anything about
it.
So when they come into a meetingthey get an envelope.
And one of my favorite things todo is, I share a statistic and I
say the average American spendsmore time planning for one
annual vacation than they dotheir entire retirement.
And when I say that, it's sofunny, I look around the room
(09:16):
and there'll be like a third ofthe people in there shaking
their head yes and kind ofpointing to themselves g oing, y
ep, I'm one of those.
And so what I do is I say,listen, at the end of the day
today, you guys are no longergoing to be that statistic
because you're going to leavewith the report that's going to
show you what you need to do toget on track for retirement.
And so I think while you havethem there and you can put a
(09:39):
report in their hand, we feellike we get more success that
way.
So it takes a little bit of workon my a ssistant to generate the
reports and put them inenvelopes.
At the end of the day, oncethose people have become
engaged, the amount of businessthat we get out of it, in my
opinion, way more than pays forherself.
(10:01):
Now I don't know, the portalmight be a method of using that
works well.
But we've had success here andwe k ind o f stick with that.
Edward D (10:12):
And I always tell advisors, you being proactive in
the most important part of theplan rather than being passive,
which is"how do I retiresuccessfully?" And you're active
there and I hear from advisorsthat that's helping them.
The other part, the objection Ihear is" I just can't get the
data".
How are you getting the datafrom the plan sponsor to create
(10:33):
these reports?
Jonathan S (10:35):
So I think you have to have buy in from the plan
sponsor on the front end.
And we've actually included theon track reports as a part of
our sales process.
When we're going through thesales presentation, we're
educating the plan sponsor onthat and we're getting the buy
in on the front end.
(10:56):
Even in our committee meetingswhen we are reviewing the
retirement plan, they understandthat once a year we are going to
do these on track reports.
And there's some great back endstuff that TRAK has too where we
can go in and run plan levelreports and often will bring
(11:16):
those plan level reports andexplain that Hey, this plan
level report, it gives us kindof the overview of the plan.
But each individuals report wecan bring out of the system here
too and deliver to individualsand get them engaged and we can
see progress.
We talk about it as a overallprocess and when you get buy in
(11:36):
at the plan level, it makes itso much easier.
And there's been time when we'vegone to the payroll manager and
we've said, Hey, we need salaryand we need this, and that
payroll manager will sometimeskind of throw up a red flag and
go, I don't know about this.
And we have copied in the CFOand the payroll manager and
(11:58):
said, Hey, we're needing thesereports like we talked about.
Would you mind just givingauthorization to the payroll
person to give us this data?
And once the CFO or whateversays it's okay to give them the
data, then we'd get it.
So we've had occasions whenthere's been a little bit of
resistance, but I think thatresistance is really taken care
(12:20):
of if you have thoseconversations at the plan level
and the committee level and theyunderstand the intent of the
reports because most of thecommittees, they see a lot of
value in getting their ownreports.
There's been times where I'veshown up to meetings and some of
my committee members comerunning over to me and go,"let
me have my report, I want to seemy report".
So they're excited about gettingthe reports as well.
Edward D (12:43):
That's awesome.
Jonathan S (12:45):
I think the more and more that you do it, the more
they come to look for it.
And it's funny, I've gotcompanies that we go to now, and
this is funny, we showed up anddid one a couple months ago and
one of the participants showedup with three previous reports,
"here's my report from last yearand here's a year before and
(13:07):
here's the year before that".
And they were able to show howthey were trending getting
better prepared for retirement.
So once you've created that kindof a culture where it's
expected, then the participantslook forward to it.
And even some of the committeemembers look forward to getting
their reports.
Edward D (13:27):
So forgive me, I'm not a plan advisor, but I can't
imagine them having any piece ofpaper for three years and
bringing it to a meeting.
Does that happen anywhere else?
What else do you give them thatthey have three years later?
Jonathan S (13:41):
I can't think of anything, but I can think of at
least four people at differentcompanies that have shown up
with their past reports.
I don't know that it's theoriginal piece of paper, but
maybe they scan it and save itin a document somewhere, I don't
know.
But they have shown up and we'velooked at the reports and it's
(14:02):
funny that we had some backbefore we branded it with our
Gates City logo stuff on it.
They brought some of the oldreports and it's funny to look
at them and see how we'vechanged it up over the years.
Edward D (14:13):
That's a great story.
You're not the only advisorthat's told me that, but it's
just three years of data, that'spretty stunning.
Kind of fun to be there in theroom when they're doing that.
It's like, hey, have we engagedthem?
I think they're engaged.
Tell me about one of yoursuccessful participant meetings,
what did it look like?
Jonathan S (14:33):
So, you know what's interesting?
I can remember probably one ofmy favorite stories of using on
track reports is I actually wentthrough and gave a presentation
and was talking about it.
And at the end of thepresentation I had a lady that
came up to me and she wasprobably in her mid, early
thirties, and she brought herreport up and I looked at it and
(14:55):
I said, Hey, congratulations,you are on track to replace 100%
of your income at age 67.
And she looked at me and she waslike, 67?
I don't want to retire 67.
She says I want to retire at 55.
And I remember going, oh wow,okay, great, let's sit down.
(15:18):
And I actually pulled up theTRAK software and was typing it
in and I couldn't quite get herto 55.
I tried a lot of things andsaving more and this, that and
another.
However, I was able to get herto 57.
And so it was so interestingthat you see how engaged she was
(15:39):
and right there, this company,the plan sponsor would actually
give us paperwork for them tomake increases so we had an
increase form and she bumped upher contribution by like 2%
right there on the spot.
So she was able to retire at 57or whatever it was.
So it was pretty cool actuallyseeing people getting engaged
(16:04):
with these things.
Edward D (16:06):
Do you see success when you go back to the same
people the second year in a row,the third year in a row, you
shared some of it, but whatother success are you seeing
there?
Jonathan S (16:16):
Yeah, I do, I see a lot of success with participants
who, like I said, stay engagedin and really bring those
reports back and have thoseconversations.
And I'll tell everybody in themeeting, I said,"the further
away from retirement you are", Isaid,"it's a moving target".
This report actually becomesmore and more accurate every
(16:40):
year that we get closer to yourretirement.
If you will engage with us, weare more than happy to provide
this value.
I love saying this in a meetingbecause I think it helps with
full fee disclosure stuff too, Ialways say, listen, there's no
additional costs for you to comeand see us and do these reports.
(17:03):
And I'll say there are fees thatyou pay on your 401(k) that pay
us to deliver these reports andif you want to continue to pay
us and not use us, we reallyappreciate it.
Thanks.
Thanks for inviting us.
And everybody kind of chuckles.
And then I said, but if you wantto get the value out of the fees
that you're paying, then put usto work.
(17:24):
Come and challenge us and let uscustomize these reports for you.
And when you talk about it in away like that, that people go,
I'm already paying these people,I might as well be taking
advantage of what they have.
And that is a couple things thathappens there too, is we bring
light to the fee disclosure.
(17:45):
It really helps us in ancillarybusiness too when we say,
listen, you're already paying uson your 401(k), you might as
well let us take a look at thatEdward Jones account that you
have or Merrill Lynch accountthat you have because you're
already paying for this service.
Why don't we include it and seehow it plays out into your
(18:07):
overall picture.
And I'll say that's how we get alot of ancillary business.
Edward D (18:16):
That's excellent.
Sounds like a good engagingprocess with participants.
What's been the response fromthe plan sponsors or do you have
a story you can tell about asatisfied plan sponsor?
Jonathan S (18:27):
You know what's interesting, I had a plan a
couple of years back that hiredus.
It was funny because in thesales process we thought that
they weren't really interestedin employee education.
And so one of the things that wedid is we said, okay, we have
these reports, we're still gonnaleave it in the presentation and
(18:47):
kind of have a conversationabout it.
And so we talked about the oldtrack reports and gave examples
to everybody that was in thesales presentation.
And then probably six monthslater after they had hired us
and we'd on boarded them andeverything else, I'm actually
doing some stuff with the CFOand I'm having a conversation.
I said, Hey, can I just ask yousomething?
And I said, what made you chooseus over that competitor?
(19:11):
And that competitor is anational competitor and very,
very strong firm.
I said, what made you choose usover them?
And she said, we really likedthat one page report that you
gave everybody and now yourcompetitor had something like
that, but it was like fivepages.
(19:33):
But we really liked that yourswas one page and it was super
simple.
And it's so funny that in mymind I'm going, but in the
discovery process, before thesales pitch you told me that
wasn't important, but t hat'sone of the reasons that you
hired me.
So I thought it was interestingand so now i n every
presentation I make sure that weleave the talking about on track
(19:56):
reports in there.
I think making it a part of thesales process and then when you
deliver it and they see thevalue, and not only that, but
plan sponsors that we've done,our total process have gotten
such great feedback from theemployees that it's really
helped a lot.
(20:16):
And so when an employee says,man, I really did not want to
come to this meeting b ecause Ithought it was just g oing t o
be a very boring 401(k) meeting.
I'm so glad that I did becausenow I have this report and I
know what I need to do to be ontrack for retirement.
When a participant tells theplan sponsor that man, that's
better than me telling them.
(20:37):
That's actually their employeetelling them.
Edward D (20:42):
What differences has that one page gap report made to
your business?
Jonathan S (20:47):
If I had to quantify in a number, I would probably
say it's in excess of$500,000 ayear in revenue.
Just because the amount ofancillary business that we get
out of our retirement plans justfrom using it and that we've
(21:08):
been using it year over year andit's really been a process that
we've, we've perfected over theyears.
But I would say as far as returnon investment for what I pay for
that tool, man, it's beenexponential.
Like I said, probably just offthe top of my head, I would
(21:29):
assume at least$500,000 ofrevenue.
I bet if I actually trulycalculate it is probably more
than that.
Edward D (21:38):
Any other thoughts before we wrap up?
Any comments?
Jonathan S (21:43):
I would just say keep doing what you're doing.
I really appreciate that youguys are innovating and you're
coming out with new, like theportal and different things like
that that really tries to helpadvisors.
I'm so glad that I actuallystumbled across this tool.
(22:05):
So I really appreciateeverything that you guys do.
Edward D (22:09):
Well, Jonathan, I appreciate you taking the time
today.
It's Jonathon Schultheiss outof, I want to say gateway city,
but it's Greensboro.
Jonathan S (22:17):
Yeah.
Gate City Advisers.
Edward D (22:20):
it's great to have you here and I wish you the best in
2019.
And thanks for your time todayto share about how TRAK has
affected you in working withparticipants in the 401(k) plan
side.
Thank you everybody forlistening, have a great day.
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