Claire Akin runs Indigo Marketing Agency, a full-service marketing firm serving top independent financial advisors. She works closely with several of Barron’s Top 100 Financial Advisors to grow their AUM using digital marketing.
John Carl is Founder and President of Retirement Learning Center, the nation’s preeminent thought leader on retirement issues. He is also the Executive Director of the PLANSPONSOR Institute, the education and training arm of PLANSPONSOR, as well as founding lecturer for The Retirement Advisor University (TRAU) at UCLA Anderson School of Management Executive Education. John serves on the Government Affairs Committee for the National Association of Plan Advisors. As the “advisor to the advisors,” John is a highly sought after industry insider who travels the country educating groups of financial professionals on the very latest in retirement legislation, forecasts, and developments affecting the industry.
Great. Thank you so much for joining me today. I’m Claire Akin with Indigo Marketing Agency. And today we are going to be partnering up with special guests from Retirement Learning Center and we are going to talk about how to grow your retirement business during the 2020 economic crisis. I’m super excited to welcome the team at Retirement Learning Center. They are a great resource for advisors out there, and they have tons of knowledge about retirement plans, but also supporting individual advisors and their individual clients and how they can best navigate these circumstances.
Today, we’re going to talk about primarily navigating compliant rollovers, what’s changed in 2020, where the industry is going and where the opportunities are for advisors. So I’ll give you a quick background on my story, if you don’t already know me. I’m Claire Akin with Indigo Marketing Agency. I used to be an advisor with LPL Financial. My dad’s a financial advisor, so that’s how I got into this business. I have a bachelor’s degree in economics, a master’s degree in marketing. I’m a lecturer at UCLA Extension as part of their CFP program in marketing.
And I work with 165 top independent financial advisor clients, where we do their marketing for them. So we help position them as the go-to expert in their individual area of expertise. And we do everything from run their website, create their content, help them create webinars, do all of their social media postings. So they have a completely branded custom presence online that explains what they do, who they serve and how they help at a minimum investment of their time. So a lot of the marketing that you see coming from my firm, that’s what we do for advisors. And so, if you’re interested in that, go to indigomarketingagency.com to learn more.
So today, I want to welcome John from Retirement Learning Center. He’s the president and founder of the Retirement Learning Center, which is an independent ERISA consulting and training firm that serves independent financial advisors. They’ve been in business 16 years. Before that, he has a really impressive story, deep background as an advisor himself, so he understands working on both sides of the fence. And what they do is really support advisors on their retirement planning business and also with individual clients. So I’ll let John take it away from here.
Thank you, Claire. A pleasure and privilege to be here. As you said, RLC has been around for 16 years with the sole mission and focus of supporting advisors through the ever changing world of ERISA. Whether you’re a plan advisor, we support you in that endeavor, but what we’re partnering with Claire on today is to talk about the wealth management side and the rollover side of the equation.
It’s no secret we’re in a challenging market environment. We’ve been in those before, this one’s a little bit different. But no doubt that individuals have amassed a large amount of assets in their, what we call concentrated wealth at work or their retirement plans. All of them undoubtedly will be looking for financial planning guidance on their total financial picture, but also, if you can include those concentrated wealth at work assets into your financial planning practice, it’s a tremendous value to your clients and prospects and a great opportunity for your business.
We also have the advent here or the coming on of Reg BI. So when you’re conducting client reviews and talking about those concentrated wealth of work assets, the opportunity for rollover is certainly going to be a topic that comes up. Navigating those waters in a compliant Reg BI environment is essential, and we at RLC are expert at this in supporting your practice and helping you do great business on a net new asset perspective, helping your clients on the prospect, and navigating it in a compliant fashion.
Over the last 16 years we’ve been in business, we’ve amalgamated a library of over 2,500 organizations where we have their DB, DC, and in most cases, their non-qualified deferred comp plan documents on file, the actual plan documents. So we at RLC supplement that with the annual 5500 information and/or auditor reports that might be out there on the plans to give you a very deep and holistic picture of what we call the retirement DNA of your clients and prospects. And that’s really, at the end of the day, what you have to demonstrate in a Reg BI world is this new conduct of care that goes through identifying and helping you identify that you’ve gone through this balanced conversation.
And we can support you in that aspect of your business. But what we do uncover as we go through that process in analyzing these retirement plans that your clients and prospects are in, we uncover these opportunities that can help you, from a financial planning perspective, utilize those assets that are sitting in a plan that probably has some type of limitations in the investment lineup that’s available to participants. And participants certainly need advice and guidance more than ever right now. Better from you, certainly, than 1-800-GED equivalent sitting on the end of a phone line, and utilizing the full spectrum of investments that you can put to use in an IRA. Helping you navigate that in a compliant fashion is what we’re going to talk about today.
So if you move forward in our presentation-
Yeah. So I just wanted to start by, I know we’re going to get into the nitty gritty here. Why don’t you give us just an overview for advisors who maybe are just coming up for air after this COVID-19 thing hit. I know their clients have been calling them, the phone’s ringing off the hook. They’re rebalancing accounts. Maybe they’re just coming up from air and thinking, Okay, where are the opportunities? What has changed in the retirement plan landscape? Where can advisors look to grow their business? And where are the big opportunities for advisors?
Yeah. Right on the money, Claire. And thanks for chiming in there. Essentially, as I was saying, we’re analyzing these retirement plans. We cover about, I’d say, 90% of all working Americans, where we have what we call analyzed their retirement DNA. Here are the four key areas that we find advisors can really bring some true value to their clients and prospects in.
Do the plans have embedded in-services non-hardship distributions? If so, what varieties do they have? They all are different and have variations. A lot of people know about the age 59 and a half that might be available in a plan. Some plans also allow early access to the employer match that can be accessed as early as sometimes five years of service, or assets that are two years vested. Giving participants and prospects and clients the opportunity to liberate proceeds that are in a plan in a compliant fashion and showing them that they can broaden their investment tool kit, if you will, in this market is very valuable. So we understand the in-service on hardship, distribution market extremely well.
Also analyzing and seeing if plans have after tax 401k accounts. What is that and why is that important? Well, a lot of folks are contributing to their plans and that’s fine. Many of them choose regular or Roth where they put their proceeds. And then, again, they have their limited investment menu to choose from.
But if you can identify those plans, and we’ve already done that, Claire, where that had this after-tax feature, we can show an advisor how they can guide their clients and prospects to overfund those accounts up to the full limitations that are available in this after tax 401k account, which is not Roth. It’s not regular, it’s a separate bucket that’s available in about half the plans in America. When you identify that, if you have a household that can, one of the folks are both the folks in the household or whoever’s in the household, can overfund and fund that after tax account, that can be tied in oftentimes to an in-service distribution feature and lead to an accelerated Roth IRA savings program. Also very attractive from a financial planning perspective and a net new asset gathering perspective.
In the upper right box, sometimes we identify organizations that have company stock available in the plans. And as we all know, some stocks are doing better than others, but if there is a net unrealized appreciation in the employer stock sitting in the plan, different tax could be then supplied. We’ve got white papers on all of these topics that help advisors communicate this to their clients. But if company stock’s available in a plan, then we get into the potential of helping an advisor guide a client on how to keep more of what they’ve earned in that plan by taking advantage of NUA on appreciated stock that’s available in the plan.
And then finally, in the lower right hand side, many organizations still do offer pension plans, traditional defined benefit plans. It’s no secret that we’ve seen organizations across the board really de-risk, if you will, their pensions and they’re providing more and more participants in those plans the ability to take lump sum distributions, either at the point of retirement or with early offers. And we’re going to continue to see those early offers come through. In fact, part of the CARES Act actually gives plans the ability to maintain their [inaudible 00:09:12] funding.
So we do, Claire, can continue to see and will continue to see more of these lump sum distribution provisions put forward to the participants. And they’re going to need financial advice and guidance as to whether annuitize or a lump sum. I will tell you that if you’re going to lump sum, the interest rates where they are right now, those lumps sums are probably the highest that we will ever see in American history right now. So that’s another key decision point.
Those four areas are really germane to the financial planning conversation for the advisor and their clients. And most of them will be to net new assets, for the advisor, better managed under their stewardship.
So let’s move forward in the deck here and talk about how RLC can help. Well, as I talked about, RLC has amalgamated over the last 16 years over 2,500 organizations where we have their DB and DC and non-qual plan documents on file. When you engage with RLC, the first thing we’re going to do is we’re going to leverage what we call our heat map training, where again, we’ve created pockets of the major employers that we have in our database and our library for those four major features and tying that into your compliance program for Reg BI. So training you up on what are the major employers in your regional geography and what are the features or the retirement DNA features that are available to the folks who are workers there, and helping turn you into an expert into these organizations is really what we’re all about here.
The next slide shows that our heat map training is really designed … Some of you might’ve run into Aiko out in the marketplace. Aiko is a benefits firm that’s retained to do financial planning at the C suite level. What we essentially do is turn an advisor into an Aiko consultant to turn them into the go-to advisors for rollover and financial planning at a company-specific level. We’re going to give you the expertise and the insight into that local employer qualified plan that’s going to help you do great financial planning for folks who are working there to help them maximize while they’re in work, in those organizations, in those plans, but being aware of all the opportunities that are designed in those plans to liberate proceeds and roll those over compliantly into IRAs where it’s appropriate.
The next slide shows you an example of what we talked about in one of our heat maps. If you’re in the great state of Texas, here’s some samples of some of the organizations where we have that amalgamation in our library of their DB, DC, non-qual plans. Lockheed Martin, ExxonMobil, American Airlines, Schlumberger, AT&T, Halliburton, Southwest, just to name a few.
As you can imagine, Claire, from this list, some of those organizations are facing some challenges. Certainly, all of the participants that are there are going to be needing financial planning guidance now more than ever. And incorporating the knowledge and the know-how of that concentrated wealth of work they have in their plans and the features that are available to them is very, very appealing. Very, very valuable to the participants there, clients and prospects, and a good service all across the board.
If you go to the next slide, this is actually an example of one of the outputs or the snapshots, if you’re working with RLC, that we provide you. In this case, we’re looking at an American Airlines snapshot, which gives you all of the features of that particular employer’s retirement plan. The official governing plan document is behind it. This helps you facilitate that fair and balanced rollover discussion. This helps you document that you understand the retirement DNA for the client or prospect that you’re working with. And then, of course, it goes into some of the individual features that we talked about.
On the next slide, you can take a look and see what we exactly are talking about here. In the accumulation phase for anybody who’s working at American Airlines, you can see that they have an employee Roth deferral. So if that’s an attractive feature from a financial planning perspective, many of the participants will know whether to do regular or Roth. That’s where you in a financial planning conversation can really bring tremendous value. You’ll see also, on the next bottom line there, that American Airlines actually does allow those after tax contribution features. In this case, up to 20% of compensation can be directed by the advisor to the participant in the plan to overfund, if you will, into that after tax bucket.
And that can be tied, potentially, if you look at the next slide, into an in-service non-hardship distribution. So we can show folks how, at American Airlines, to fund that after tax bucket while in plan, but then immediately liberate those assets out of the plan to get it over into a Roth IRA, where it’s going to grow tax free for life and can be used as beneficiary planning, legacy planning, and income planning, because it is tied into this in-service distribution.
Again, all of these plans that are out there in our library are different and various, and that’s the expertise and the insight that we help advisors understand, which really is tremendously valuable to their financial planning business. But it’s very, very valuable to the folks that they’re working with in helping them really bring that to life and put together accumulation and income plan.
That’s great. [crosstalk 00:14:44]-
And if we go to the next slide-
And talk about this just a little bit from a marketing perspective. So advisers out there, if you are a client of ours and we do your marketing for you, you can see how this could easily be created into a marketing campaign for, say American Airlines employees. And so, you could see how all of these opportunities for their employees could be put into a guide or even a quick webinar where you walk through all of the different financial planning scenarios that are available that they may not be aware of.
And then, we use LinkedIn to target people who work at that company so that they can watch your webinar, spend a little bit of time with you, peak their interest, and then hopefully, set up a phone call to start a conversation. And so, the idea really is to use these deep resources that the Retirement Learning Center provides to identify these areas of opportunity and then use them from a marketing perspective to grow your assets. And so, I think it’s just a really cool partnership between our two teams.
Well, you’re right on the money, Claire. I mean, you’re right out of central casting. If I dare categorize, we’re the nerds that have all of this information and you’re the cool person that can help an advisor really bring that to life and bring that into their practice. So this is really, really extremely valuable, and you’re just nailing exactly what the strategy is. How do you take this company-specific information and take one participant that they might know. That participant’s not unique, so your ability to help them market this is invaluable, I would say, both to the participant and to the practice.
If you’re looking at this slide, we talked a little bit about net unrealized appreciation. Again, we’re using Texas as an example here, Claire. ExxonMobil, great organization, obviously in the oil market. But if you have a longterm employee at Exxon as a client or a prospect, what you’ve got here is Exxon actually identifies individual tax lot accounting for each piece of stock that’s been accumulated in my retirement plan. So we can work with an advisor to help them identify which individual tax lots are potentially attractive for NUA or favorable tax treatment, positioning with the client. Again, helping the client not just earn, but keep what they earn is an essential part of great financial planning.
And here’s an example in the ExxonMobil plan, where you are identifying net unrealized appreciation opportunities, many of which, the folks who work at Exxon are probably not even aware of this prospect. Great highlight for the financial advisor, differentiating themselves and being the go-to advisor, Claire, like we talked about.
If you look at the next subject that we talked about, again, bringing this to light in our four boxes, we talked about plan snapshots, also identify lump sum distribution opportunities that are available in various plans across the country. We see a good portion of plans have lump sums that are traditionally available. We’re seeing, Claire, even more plans opportunistically make lump sums available during limited windows. We’ve seen FedEx go through this. We’ve seen many organizations offer these limited window lump sum distributions, as they’re trying to de-risk, if you will, their pension plan. Pension funding has been at all-time highs. We have seen some market volatility, we’ve seen the market come back. That’s just going to accelerate this lump sum distribution window.
And of course, if a lump sum is offered to a participant, they’re really going to need to work with an advisor to understand what’s the benefit of annuitizing or staying in the plan? What are the risks as well too, versus taking that lump sum distribution? Claire, I don’t need to tell you, with interest rates this low, lump sums are larger than they’ve ever historically been in America. So these are real conversations, real financial planning conversations. In many cases, you’ll see the lump sum is very, very attractive for the participant to get control of those assets in the hands of their advisors managed properly.
So if you go through the program that we’ve put together, again, the one-two combination of working with RLC on the technical resource side and tying Claire into what Indigo is doing here, we have a proven program process, support materials, and all types of retirement plan insight. So when we get started with an advisor on the technical side of the equation, we sit down, we do what we call a book review. We review the advisor’s book and where their clients are located, what type of organizations they might be at for those that are working, and for those who might have legacy assets sitting in previous employers.
Again, you just nailed it, Claire, in your previous comments. If you have one, two or three clients that are working at one employer, those folks are not unique. Retirement DNA comes in buckets. So if a strategy makes sense for one employee, it’s going to make sense for 10, 20, a hundred, 200 more. So once you get the acumen through the RLC program, working with you to help broaden that out to the greater participants, it really becomes a marketing machine, if you will.
So we help you become the expert.
Yeah. And that’s what it’s all about. And this is what I preach to advisors all the time, is the way that advisors are getting new clients today is not through Facebook ads or some fancy mechanism. It’s through, primarily, referrals. And the number one way that people ask for a referral to an advisor is they ask their friends, family, or coworkers for a referral. So coworkers are huge bucket. So if you have people at a company who can forward information about that specific plan to their coworkers and say, “Oh, here’s the advisor I was telling you about. Here’s the webinar they did for Lockheed Martin.” That makes so much sense. That transfers that trust and it gives the person an easy action to take, watch the webinar, schedule a call with you.
And so, those are the types of campaigns that we create for advisors. And it’s all about being that go-to expert, just like you mentioned. We all want to work with a specialist. I say this all the time, the riches are in the niches. So if you can position yourself as a specialist for a few different retirement plans, where there’s tons of employees in your area, it makes your job so much easier.
You can work with clients that you love. You can work with people that have more complex financial problems, that have a higher willingness to pay, that have higher assets to invest. And it just is where the rubber really meets the road for advisors looking to grow their businesses, become an expert, and then get those referrals from employees at the company who already know, like and trust you, and can refer their coworkers to you because you solve the problem that they’re facing.
You’re right on the money, Claire. And that’s really where we get into step two. Step one is let’s identify, let’s do the book review. Step two, let’s go through the technical aspects. Now we don’t need to turn a one of your advisors, Claire, into the final contestants on ERISA Jeopardy. That’s our job. But we can impart those wisdoms in those four boxes, in that financial planning conversation that bring to light some of the options and features of the plan that probably their clients and their prospects certainly are not aware of.
So you’re bringing to light, as you said, unique and new planning opportunities that are really impactful for the accumulation, and tremendously impactful for the retirement income planning phase. And it’s through these little tools that you’re really, you see people when we do webinars or we do meetings, their eyes get wide. And then, Claire, that’s where you come in. It’s not unique to, if it’s for that one person that’s going to make sense, there’s a whole bevy of other folks at that organization that are going to really benefit from working with that expert advisor that is the company-specific expert.
Absolutely. Yeah. And I’m thinking of all the campaigns we could run. You could do a webinar on the opportunities for employees at Lockheed Martin. You could do case studies of clients at Lockheed Martin who you’ve helped and the different financial planning challenges they were facing, and how you solved those problems. There’s just so much content we can create from a marketing perspective on these opportunities for advisors out there.
And you’re nailing it, helping the client is the key. And that client is not going to be unique. One client turns into a hundred prospects, and the financial advisory is doing great financial planning above and beyond what these folks have seen in the past before. Again, we’ve been doing this for a long time. What we don’t have, which you bring to the table with Indigo, is the ability to market that and scale that for the adviser. So it’s a really tremendous combination here, Claire.
I would just say on the next slide, for folks who are looking to broaden the net even further, RLC does have additional support for gathering net new clients and assets through center of influence marketing. We do have content that’s available. Again, contact Claire. And these seminars and programs are also available for CPE continuing education credit for CPAs. So if that’s part of your prospecting approach, we can certainly add some value there and do that in a virtual series as well too.
So in closing here, the benefits of engaging with RLC are pretty clear. As I self painted ourselves, we’re the technical nerds, if you will, that can turn you into that go-to advisor as a wealth manager on a company-specific financial planning level, which is extremely valuable. Partnering with Indigo, no brainer, help you expand that net. If you do retirement plans on the right side of the slide here, we can help you with those as well too. There’s never been a greater need or time for plan sponsors to reevaluate what’s going on with their retirement plan and utilizing the CARES Act to make changes.
So we’d love for you to get started with RLC. You can give us a buzz directly at 877-ASK-RLC1, or of course, contact Claire at Indigo. So, Claire, I’ll turn it back to you to close this up.
Great, and thank you so much for watching. I’ll link everything below, so you can click the links to get started. You can get some special annual pricing, not just for LPL Advisors, but for everybody watching this webinar. And I really recommend getting in touch with the Retirement Learning Center. They have such deep resources and content support for advisors. They can just really help position you as an expert and help broaden your expertise and your team and the efforts going after growing your retirement plan business.
And, of course, we’re always here to support you from a marketing perspective. We are offering $500 off our Get Started Now package. If you’re interested in outsourcing your marketing to professionals, you can save $500 now. Just click below to get started and schedule your free marketing consulting phone call.
Thanks so much, John. It’s great to hear from you. Thank you for all of your expertise. And thanks for watching.