0:05

Welcome everyone. This is Ed Dressel with RetireReady Solutions

0:07

for our podcast. We have Joe

0:10

Williams out of Indianapolis this morning. I'm excited to

0:12

have him. Joe, welcome to our podcast.

0:14

Thank you.

0:15

It's great to have you. Tell me a little about yourself

0:18

before we get started.

0:18

Well, I am

0:20

a financial advisor,

0:23

also our education specialist

0:25

for our firm, CSi

0:28

Advisory Services. We're out of Indianapolis,

0:30

Indiana. The firm

0:32

has been up and running since 1971.

0:35

And we're actually a retirement

0:39

focused firm. And

0:42

so my job really is all about

0:44

going out and educating participants

0:46

around the retirement plan to make sure they

0:48

know exactly how it works

0:50

and how to really best utilize it.

0:53

How long have you been with CSi?

0:56

I'm going on a year, a

0:59

little over a year and a half now that I've been doing this with them.

1:01

And before this?

1:02

Before this I was an

1:05

advisor at a bank for almost 20

1:09

years. So I've been an

1:11

advisor for quite awhile.

1:13

What obstacles do you find in your business?

1:16

Obstacles? Really it's

1:19

how to establish

1:21

value, you

1:23

know, when we're working with customers--or

1:27

working with clients now--because we

1:30

see the emergence of the robo advisor

1:33

and so now there's a much

1:36

cheaper solution out there that's

1:38

virtual but clients can

1:40

really use and now we

1:43

as advisors are really having to

1:46

show our value

1:48

when working with customers to make sure that

1:50

they understand that

1:52

by working with us, the

1:55

costs associated with working with us

1:58

are certainly justified as

2:00

opposed to basically the virtual experience.

2:04

And what are you doing to, to justify,

2:07

"Hey you need to hire an advisor for your plan?"

2:10

Well, it could be a number of things.

2:12

I mean really it's all about customizing

2:14

the experience to the

2:17

client because it's something

2:19

that they don't necessarily

2:21

get with the robo advisor. It's

2:24

more of a plug and play

2:26

type situation with robo, whereas we

2:28

are providing a lot more

2:31

of the customized solutions for them

2:33

to where it's more tailored to

2:35

what their needs are. And

2:38

we are able to kind of think outside the box

2:40

to ask those additional questions to

2:42

really, identify additional needs

2:46

based upon the conversations

2:48

that we're having. And so I

2:50

think that's really where we start

2:52

to establish that

2:54

value with the customer, you

2:56

know, going deeper in making sure we're

3:00

having those extended conversations

3:02

that are going to be more fact finding

3:04

to identify those needs that they haven't even

3:06

really thought of.

3:08

So, I'm going back a little bit on what you said to

3:10

me. You left the bank after 20 years,

3:12

came to CSi you're the education

3:16

specialists. What made you go, "That's the job

3:18

for me."

3:19

Well, I noticed that

3:23

if we look at what

3:26

is important to people in where

3:28

the majority of their investment

3:31

assets are really coming from, they're

3:33

definitely with the 401(k).

3:36

With the bank as an advisor, some of

3:38

our biggest tickets that we had

3:41

were from 401(k) rollovers

3:44

and meeting

3:46

with people and looking at how these

3:48

401(k)s were allocated

3:49

and I

3:52

just saw some really horrible,

3:55

horrible allocations. And

3:58

we don't have to think back too far to

4:01

the financial crisis when the market's

4:04

dropping 30,

4:06

40% and you have

4:08

all of these folks out there that

4:11

were allocated way too heavy in the stock

4:13

market. And so we saw a lot of retirements

4:15

that got postponed. And

4:18

so in meeting with people

4:20

and looking at these things, I'm

4:22

thinking, "Wow, who in the world

4:25

is advising these people

4:28

in these plans?" And really

4:30

the answer was "No one." Very

4:33

few advisors have that

4:35

capability to make those

4:37

recommendations over the investments

4:39

inside of the retirement plans. And so with

4:42

our firm, we are fortunate enough

4:44

to have the ability to do that. And

4:46

so that was what was really attractive

4:49

to me--to be able to form the relationships

4:51

with people when they were still in their

4:54

working years and guide them on

4:56

how to invest the funds inside

4:59

of their retirement plan so that we get

5:01

better outcomes for them when it comes

5:03

time for them to retire. And

5:06

so that's where my

5:09

job is--going in and

5:11

sitting down with them and saying, "Let's

5:13

take a look at this retirement allocation. Is

5:15

this really appropriate for you?" Because

5:18

the human resources department really

5:20

isn't qualified to have those

5:22

discussions with people and the record-

5:24

k eepers aren't going to do it either. So I

5:27

really like that aspect of this job,

5:29

of being able to have those conversations

5:31

and make those recommendations and put ourselves

5:34

in the driver's seat so when the people

5:36

do retire, they're really grateful

5:38

for us and all the help that we provided

5:40

them along the way to put them in that position.

5:43

And so, it's a pretty easy transition

5:45

when we ask for the business for them to continue

5:47

the relationship with us. On the

5:49

personal side, I really

5:52

liked being at--I guess I almost think

5:54

of it like the grass roots effort

5:56

here. We're working with

5:59

these people, helping them to accumulate

6:01

so that when one day when they are

6:04

going to make that transition into retirement that

6:06

we are right there in the great

6:08

position to be able to ask for that business.

6:12

So you're doing what I'm passionate about--helping middle

6:14

America retired successfully.

6:16

Absolutely.

6:17

That's part of, that's what we love to help advisors

6:20

do. Before you can tell somebody

6:22

what they need to do with you know, how to allocate

6:24

their money, you've got to engage the participant

6:27

in a meaningful way. Otherwise they gloss

6:29

over and don't engage it. How are you engaging

6:32

participants towards retirement

6:34

readiness?

6:36

That's a great question because

6:39

nowadays, you know, you see

6:41

that there's all these

6:43

different programs out there

6:45

and financial wellness is

6:47

everywhere. And so, we

6:51

try to make sure that we are using

6:56

some type of a tool that

6:59

will give participants

7:01

a pretty accurate picture of what

7:04

their retirement outlook looks

7:05

like. The RetireReady

7:11

Solutions, the actual TRAK program that we use--we

7:13

use that quite a bit in our practice

7:16

to kind of give people

7:18

that outlook. It presents

7:21

itself in such a simple way that instead

7:26

of presenting someone with a 50

7:29

page retirement plan document

7:31

that they're probably not going to go through

7:33

and read all of, I mean, this is, you

7:35

know, a nice one pager that

7:37

they can look and see, "Okay, do I have any

7:40

red?" If I don't have

7:42

any red, I'm in good shape. If it's all green,

7:44

I'm great!" And if

7:47

we do see the red, we talk

7:49

about how we get the red out. It

7:51

sounds like a Visine commercial, but for

7:53

the most part, that's what we're really trying to do

7:56

is figuring out how we get the red out. That

8:01

report really helps to

8:04

start some really great

8:06

conversations around

8:08

what we need to be doing for them to get

8:10

them where they need to be. Also it

8:14

helps us to kind of incorporate

8:16

any other things that they might be doing outside

8:19

of the plan.

8:21

I think you're talking about the one page Participant

8:23

Gap Report. It shows

8:26

them their gaps, shows them what they need to do and it gives

8:28

them a few more options, but really keeps

8:31

it clear, as we've tried hard

8:33

to make it, so that participant goes there and

8:35

you can be proactive in handing it to them versus

8:37

saying, "Hey, go out to the portal and figure this out

8:39

for yourself."

8:42

Right.

8:43

Do You have a story of, maybe an anecdotal

8:45

story, of something that happened recently with the

8:48

participants that said, "Hey, there's

8:50

my situation, here's what I need to do."

8:53

Yeah, you know, it's

8:56

funny because the stuff, it's all

8:58

relative. And you

9:00

have a participant--one particular

9:02

participant I'm thinking of making

9:05

$250,000 a year

9:07

and thinking, "Okay, I'm saving, I

9:09

have this much saved up and I'm

9:12

doing great and I should be able to

9:14

retire." But what they

9:16

didn't realize is that when we

9:19

start thinking about retirement in terms

9:21

of the income that you need, we're

9:23

trying to target around 75-85%

9:27

of what your working income

9:29

is as far as your income in

9:32

retirement. And he

9:34

never really thought about it that

9:36

way. And so once we started

9:38

taking a look at what he had and what he accumulated,

9:41

because he was contributing the max

9:44

to his 401(k) but after

9:47

running the Gap

9:49

Report, it still wasn't getting him there.

9:52

And so he never

9:54

really thought that, "Hey, wait

9:56

a minute. Even though I'm doing

9:59

what I can, I'm contributing

10:01

into my plan, I never

10:03

thought that I would come up short." He

10:06

never worked with

10:09

anyone that really ran the numbers for

10:11

him to show him that, "Hey,

10:13

by the way, if you keep doing

10:16

what you're doing, it's not enough to be

10:19

able to provide the type of income that you're living so

10:21

you can maintain your lifestyle

10:24

in retirement." So after

10:26

running the report for him--and it was nice because

10:28

it was just a one page report and it showed

10:30

everything--and he

10:33

could see where, "Holy cow, all

10:35

right, I know I'm doing this

10:39

and this is still creating a short fall."

10:41

It helped to

10:44

drive the conversation around,

10:46

"What else should I be doing?" And so

10:50

in this particular case it helped

10:52

us to put together a scenario

10:54

for him where he could actually save

10:57

outside of the plan to help

10:59

make up the shortfall that

11:01

he was going to have in retirement. It

11:04

helped lead to more

11:06

assets and to gathering leads to

11:10

additional business with this particular client.

11:13

So I really like the program. I really

11:15

like using it to engage the customers around their

11:18

retirement situations.

11:20

So you have a pretty high net worth, high

11:23

income person story there, which

11:25

is good because it got him off of autopilot

11:28

and said, "This is something you need to get your hands

11:30

on," and not just assume that giving

11:32

the max is going to solve the problem. I've

11:34

seen that problem before. People have called me,

11:37

advisors ask, "Why isn't this working?" Exactly

11:39

that. Pretty close

11:41

to that amount of money. Tell me

11:43

about a story about a middle America

11:46

person that you know, middle-

11:48

i ncome $50-100,000 that

11:51

you engaged with, the report

11:53

made for them.

11:56

I am thinking about

12:00

one particular participant that

12:03

I work with and she was working

12:08

on contributing. I want to say

12:10

she had about 3%

12:12

if I remember correctly, she was contributing about

12:14

3% to her plan. The employer

12:17

had a match 100% up

12:20

to that 3% so that's

12:23

why she was doing three. So,

12:26

you know, we started looking at the plan

12:28

and looking at her situation

12:30

and I saw that

12:34

her balances were probably around

12:37

30,000 or so and she

12:40

was fairly young. I mean probably early

12:43

thirties or so, and just not

12:47

a clue about this. And she was just doing

12:49

the 3% because that's what she told she

12:52

needed to do was the 3%--max out

12:55

what your employer is giving you. That's

12:57

the advice that she got, which we

13:00

see with a lot of participants. It's like,

13:02

yeah, you want to contribute at least what the employer's

13:04

matching, and so a lot of people do that.

13:07

Once we

13:10

did the retirement analysis

13:13

for her and

13:16

determined that about 3%,

13:18

even with the employer match, 6% was still not

13:22

getting her there. The nice

13:24

thing about it is, the Gap

13:26

Analysis gave us a recommended

13:30

contribution amount. It told

13:32

her basically to raise her contributions

13:34

up to 10% to get her where it needed to be.

13:37

And it's really cool because

13:40

we have the ability with the program

13:42

to adjust the assumptions.

13:45

And so for us, we

13:47

use an 80% income replacement

13:49

ratio and then we also

13:52

are able to include social security, but typically

13:55

we'll include social security at about

13:57

70% of

14:00

whatever the actual benefit that they're

14:02

supposed to get. So

14:04

it really creates action

14:08

on the participant's part when we

14:10

show it like that, because everyone

14:13

has it in their minds that social security

14:16

just may not be there in

14:18

its current form when they retire.

14:20

So running it at a

14:22

70% assumption,

14:25

we never get any pushback

14:28

on that. We've never had one person

14:30

say, "No, I think I'm going to have full

14:32

social security." If anything,

14:34

they go the other way and say, "Hey, can you run

14:36

this without social security?" For

14:38

her we ran it like

14:40

that and it helped us to get a

14:43

recommendation to raise those contributions

14:45

up to the 10% mark. And you

14:47

know, for her, going from

14:50

three to ten was a tough, tough

14:52

jump. We realized

14:55

that. And so that sparked additional

14:58

conversations around, well, let's take it a little

15:01

deeper look at your finances and what your

15:04

budget really looks like. After

15:08

doing that, we started

15:10

realizing that there was a lot

15:12

more money there that she was making

15:15

that was basically being

15:18

spent , for

15:20

lack of a better term, and could

15:23

have been otherwise saved.

15:25

And so after going

15:27

through the exercises of looking at

15:30

the budgeting, we found

15:32

we were able to find enough cushion there

15:35

to where we could raise those contributions

15:38

to--we ended up around

15:40

eight--it was 8% that we ended up at.

15:43

But then what the

15:45

plan was, is that getting

15:49

to that 8% level now, but

15:51

in a year from now, we're going to bump

15:53

it up by 1% and

15:56

keep doing that 1% and timing

15:58

it out around the time that her pay raises

16:00

come. So that way the impact on her is

16:03

pretty minimal, but at least it gets her to that

16:05

savings level that was where she

16:07

needs to be. So again,

16:10

using the program, it

16:13

just really helps to drive

16:15

those conversations and

16:18

make sure that we're able

16:20

to get people to where they need to

16:22

be. And it presents itself in

16:24

such a simple fashion that it's

16:26

really easy for them to read

16:28

and it's not the 50

16:31

page retirement planning document

16:34

that really intimidates

16:36

people. And you know, once

16:38

they get that huge binder

16:41

of stuff, they take it home and they never

16:43

look at it again because they just don't want to have

16:46

to read through all that to figure out

16:48

what they need to be doing. At

16:50

the end of the day they still come back

16:52

to us and say, "What should I be doing here?" But

16:55

this one page report, it's so simple.

16:58

It makes it really, really easy

17:00

for them to understand.

17:02

Yeah, exactly. And I, I don't want to read, I'm a technical

17:04

person. I don't want to read 50 pages.

17:07

Yeah.

17:07

Different perspective, different angle on this. Many

17:10

advisors tell us they don't want, they don't pick up

17:12

our software because, "Hey we have the web portal, we can

17:14

go to the portal. And just tell the participants,

17:16

go to the portal and figure it out." What are the advantages

17:18

of having the Participant Gap Report for

17:20

you and your business?

17:23

You know, being able

17:25

to run that gap. I mean going to the portal,

17:27

we tell them go to the portal and

17:30

you know, cause pretty much every record

17:32

- keeper now has a portal that a

17:35

participant can use. And what

17:37

I find with the participant is they don't

17:39

use it. At the end of the day they still,

17:42

for most part are pretty intimidated

17:45

by the computer in some cases. I

17:47

mean because we're working from, you

17:49

know, people who are factory

17:52

workers in some towns in very,

17:54

very, very rural communities to

17:57

your technology

18:01

firms. We have a couple

18:03

of clients that are in fact technology

18:05

firms at technology security firms and it's

18:08

funny--you would think that a technology

18:11

firm--that they would be all over this stuff and really know

18:14

what they were doing but even still

18:16

we find they are not using

18:19

the portal. And

18:21

so when we show

18:23

up on location, in doing our one

18:25

on one appointments with

18:27

the participants, we

18:29

are going through

18:32

things with them about

18:34

their retirement plan and we're showing them

18:36

around the website and showing them the portal.

18:38

And now, unless

18:40

I'm there doing it with them, they're

18:42

still not doing it. I mean, there's people

18:45

where I've seen, we walked

18:47

into their website and looked at the

18:50

retirement plan online

18:55

and I've gone back and met

18:58

with them again six

19:00

months later and I still see

19:03

that they haven't touched it from the last

19:05

time we were in there. And so even

19:08

though the stuff is there, people are really not using

19:10

it. So when we, when I'm

19:12

able to have these one-on-one

19:15

discussions and start talking

19:17

more about, "Look, you

19:20

need to retire, we need to figure out if you're on

19:22

track and I've got

19:25

a way that I can do this calculation

19:27

for you and it's a little bit

19:29

more detailed than what you're seeing in your portal

19:31

and I think it

19:33

presents itself in such a simple fashion

19:35

that you'll be able to follow it and understand

19:37

it." And so when

19:40

we use the Gap Analysis

19:43

with our participants, we see

19:45

probably about a 75 to

19:47

80% increase

19:49

in the participant outcomes, whether

19:52

it be them increasing their

19:56

401(k) contributions or

20:00

perhaps they're engaging with us on

20:02

some type of a personal wealth

20:04

management plan of some sorts.

20:07

So I think the tool

20:10

itself--I mean using it

20:12

certainly helps to

20:14

initiate some type

20:16

of outcome. And

20:18

that's what we're really after with our plans,

20:21

just to make sure that people are making

20:24

the adjustments that they need to make to

20:27

ensure that they're on track for a successful

20:29

retirement.

20:31

So getting the data from the plan sponsor,

20:33

how do you find that process?

20:37

We think it's pretty simple. I mean, because a lot of this

20:39

information is things that they're providing anyway

20:42

for us , in a census.

20:44

And so what

20:46

we've done is basically created a template

20:49

that all they have to do is basically

20:51

cut and paste stuff into. And

20:54

it makes it super easy for them. So

20:56

when we are requesting, because

20:58

they understand if we're going to be doing this for

21:00

their whole company that we

21:03

need the data and so they

21:05

have it. It's just a matter of cutting

21:08

it from one spreadsheet and pasting it

21:10

into our spreadsheet. And once

21:12

we have that spreadsheet, at that point

21:14

it gets pretty simple to just input

21:16

into the program and a

21:19

couple mouse clicks and then we have

21:21

the report done for, in some

21:24

cases, with one our clients

21:27

over 300 people that we did it

21:29

with and it took us

21:31

next to no time to really produce those.

21:35

What's been the response from your plan sponsors?

21:38

They love it because they

21:41

understand that it actually creates

21:44

or drives outcomes with their participants

21:46

to really think harder

21:48

about what they need to be

21:51

doing in order to have a successful

21:53

retirement. Because at the end of the

21:55

day, they want to see their employees

21:57

retire because it's pretty

22:00

expensive to keep people around. The

22:03

aging employees anyway, that

22:05

are past their retirement age. It

22:08

starts to get a lot more expensive. I thought

22:11

I saw a study somewhere that it costs about

22:13

an extra $50,000 a year or

22:15

something like that, to keep employees on

22:18

payroll thereafter their retirement

22:21

ages because all the different

22:23

expenses that come about. So if

22:25

we can do things to help them

22:27

to do the right things

22:30

so that they are not there longer

22:32

than they should be, they're

22:35

all for it.

22:37

What would you tell another advisor who's just

22:39

saying, "Go to the portal that's, that's

22:41

sufficient." What would your response

22:43

to them be?

22:45

I'd say, you might want

22:47

to rethink that just because

22:51

half the time when we tell participants

22:52

to do things, they're never

22:54

going to do it. The only time

22:57

that they really think about the stuff or that

22:59

they will do anything

23:01

about this stuff is when we're there walking

23:05

them through to do it. Once

23:08

we leave they're back into their

23:10

normal life. And so, to ask

23:13

them to go back into

23:15

the website to the portal

23:17

when most of

23:19

them probably don't even know their login

23:21

information, you're not going

23:25

to get any outcomes that way. I think

23:27

also if you

23:31

have any type of personal wealth management business

23:33

in addition to doing

23:35

retirement plan business, you're going

23:39

to want to engage that participant with this

23:41

program because it's going

23:43

help do a couple things. Either one: it's

23:46

going to drive them to increase their

23:49

contributions to get closer

23:52

to where they need to be. Or two:

23:54

it's gonna really bring

23:57

to light any other assets

23:59

that they may have out there.

24:01

Because one of the things I see a lot of

24:04

is once I run this report and it

24:07

comes back as a shortfall, that customer

24:10

is gonna say, "Wait a minute, I've got

24:13

more stuff. This is only talking about

24:15

what I have here. I've got more

24:17

stuff." And so that's going to

24:19

drive another conversation where we can

24:21

start talking about this other stuff. You know,

24:24

where is this other stuff? Who's working

24:26

with you with this other stuff? Why

24:29

aren't they doing things like this

24:31

to where you know what your

24:34

current retirement readiness situation

24:37

looks like? And so it helps

24:39

us to win more business. So if

24:41

you're not doing it now, I would

24:43

highly recommend to start

24:46

doing it and not just taking the

24:51

easy way out and saying, "Yeah, just go to the portal,"

24:53

because they're not going to do it.

24:56

Well, Joe, I really appreciate you taking the time

24:58

this morning. Appreciate you interacting

25:00

with these questions and I wish

25:02

you the best in today's marketplace and

25:04

thank you for your kind words about our solution.

25:07

Yes, thank you. Hey, I'm a

25:10

big fan, so we use it quite a bit

25:12

here in our practice and we will continue to.