Blow them out of the water with 30min 401k reviews

“7 minute workout to the perfect body” or “15 minutes could save you 15% or more.” We have all heard the advertisements right? There is no place for this kind of corner cutting or business hack in the retirement plan world, right? Well I am not so sure about that.

This post is intended to spark the idea that maybe small plan reviews don’t have to have quite the same robust process as large plan reviews. In the course of my career I have sat through more Fiduciary Review meetings than I care to count. Although I have had my fair share of very serious, detailed and lengthy large committee type meetings, the focus of this post is on the small business plans. Call em’ less than 50 employees and a few million dollars in plan assets. Now be honest with yourself and consider what the client desires in these scenarios.

Let’s be realistic, your typical small business Plan Sponsor doesn’t have a ton of love for the 401k plan, they got widgets to make. Their eyes glaze over on the second page of fund analytics and performance review, they don’t have time for updated regulation overviews or retirement readiness reports or a comprehensive fee analysis. In reality, they are looking for the Advisor to package this all up in a 45 minute or less meeting, so they can get back to running their business.

I am not suggesting that just because small business Plan Sponsors want something a certain way, that we turn our back on the plan’s responsibilities that we know to be true. I am just suggesting that we be more efficient and find a repeatable way to strike a balance between what the client wants and what we know the client needs. Create the 30-45 minute 401k annual review meeting and you will have some seriously happy and satisfied small business clients. How do you do it? Follow this agenda:

Welcome and Overview (3 minutes)
Remind them of the purpose of the meeting and that you are documenting and helping establish actions that back up the concept of “acting in the best interest of the plan and the plan participants”
Overall Stock Market Review (3 minutes)
Review the overall stock market performance since the last review meeting, compare that to the overall plan performance.
Individual Fund/Investment Review (7 minutes)
Go ahead and pull out those fancy fund analytics and performance review. Just don’t dive deep into standard deviation, sharpe ratio and style purity. Use the fund review methodology and the IPS. Highlight any potential necessary fund replacements. KISS (Keep It Simple Stud)
Understanding Fees (5 minutes)
Overview the current fee structure. Help them understand who gets paid what and confirm (if true) with a benchmark that the fees are within prudent averages
Participant Education and Retirement Readiness (7 minutes)
Confirm the client’s goals and objectives as they relate to education for the employees, what mediums do they prefer and at what frequencies?
Documentation and Wrap Up (5 minutes)
Explain that in addition to this meeting’s minutes, the fund analytics and other review pieces must be kept safe as documentation to prove that we are indeed putting in time and energy towards our commitment of acting in the best interest of the plan participants.
That’s 30 minutes people! Now, watch your client’s eyes light up and smiles grow when you wrap the 401k meeting in 30 minutes. Heck, they might even look forward to the next one. Well, that’s pushing it, but you know what I mean.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s