Skip to main content

You are here


Age Is Good for Nothing, If Not Perspective

Practice Management

I began my Spring column in NAPA Net the Magazine with this sentence: These are unusual times due to the state of the U.S economy. At that time, the country was flush with employment opportunities and there was intense competition for workers at every level. Then, as W.C. Fields is frequently quoted as saying, “Things happened.” 

Plan sponsors today have a to-do list that includes asking everything from “I heard you cough; you’re not sick, are you?” to “How do we re-engineer our company to remain a going concern?” Plan sponsors’ concerns are numerous. Unfortunately, “How can we improve the qualified plan?” is not one of them.

Advisors Strive to Stay Relevant 

Many retirement plan advisors are struggling to remain connected with plan sponsors that are facing major disruption as critical issues require their undivided attention. Experienced advisors today are making a positive impact via a combination of communicating, anticipating plan sponsor needs and staying out of the sponsor’s way—call it “Professional Distancing.”

Communication is both a tool and a strategy for tough times. I have heard advisors say that their clients don’t want to meet or talk right now. That may be true—but be careful. Avoid deserving the label of the advisor who fails to make contact with the plan sponsor’s team during difficult times.

There are topics that plan sponsors do want to hear about—within reason. The three topics that advisors should be mentioning to plan sponsors are: 

  • Investment performance
  • Cybersecurity 
  • Financial wellness

Plan sponsors need to understand that these three topics will be agenda items at the next Retirement Committee meeting. 

Investment Performance Matters

At that next committee meeting, plan sponsors should be prepared to discuss target date funds and the importance of asset allocation—as boring as that may sound. Old themes? Yes. However, many participants lost more money than they should have by exiting the equity markets in March. (According to “Millennials Freaked Out and Fled Risk When Stocks Took a Dive,” an article by Bloomberg’s Sarah Ponczek, Millennials locked in losses during the recent bear market, and then suffered again, through an error of omission, by being uninvested during the bounce.)

Read more commentary from Steff Chalk here.

Cybersecurity is Worth Mentioning

Anticipating plan sponsor needs is not an easy task, but failing to discuss the exposure and known safeguards on the topic of cybersecurity may be a missed opportunity. Cybersecurity exposure exists anytime there is a combination of sufficient dollars and bad actors. Recordkeepers, TPAs and plan sponsors are experiencing a deluge of leakage activity via distribution requests, loan requests and suspended deferrals. The advisor can be a positive education resource for both plan sponsors and plan participants. The more cybersecurity awareness and education an advisor can provide the plan sponsor, the more protected our industry becomes. This is not an immediate need—but it is a worthy agenda item for the next Retirement Committee meeting. 

Financial Wellness Takes Center Stage

Today’s environment is the perfect Petri dish for why every participant, employee or corporation needs to have a sidecar emergency fund, a rainy-day fund or 6 months of living expenses in reserve. Prior to February, the term “financial wellness” was nebulous and not clearly defined. It had a different meaning for employees, plan sponsors and Retirement Committee members. Many had heard the term, and some thought they understood what it means. But there was no strong consensus on the definition of financial wellness. Now, however, the term and the stability it can bring to a participant and his or her family is crystal clear. 

Older people have perspective derived from experiencing the Kennedy assassinations, 9/11, the 2008 housing bubble or Oct. 19, 1987. Each of them were monumental game changers. In their aftermath, life changed immediately. Then life bounced back and settled into a new normal.

Or, in the words of George Harrison: all things must pass.

Steff Chalk is the Executive Director of The Retirement Advisor University (TRAU), The Plan Sponsor University (TPSU) and 401kTV. This column first appeared in the Summer issue of NAPA Net the Magazine.