Tom Kmak says the current state of annual plan reviews is a complicated mess that hinders participant success.
Speaking at a breakout session on Sunday during the Outcomes Conference 2019 in Denver, the CEO and co-founder of Fiduciary Benchmarks says far too much of the data that is being shown to plan sponsors has little value.
During the session, titled “Helping People Retire: Defining It, Measuring It and a Path to Making It Happen,” Kmak shared a vision for the future with an easy-to-remember, 7-action mental model to truly assess retirement outcomes. The session was designed to help advisors establish a “true north” for helping people to retire in terms of “What is Winning” and “What Predicts Winning.”
He says 80-page plan reviews are ridiculous because it’s impossible to absorb and act on that many pages of detailed metrics. Instead, advisors should strive for simplicity rather than inundating plan sponsors with too much useless information. He also stressed the importance of having a sharp focus on the individual rather than cohorts.
“When you talk about participant success, it is about one participant at a time,” Kmak says. “The first thing it starts with is a custom goal.”
A custom goal happens to be first on his list of “the Magnificent Seven,” which he called the specific steps to assessing individual retirement outcomes.
The list:
- Custom Goal
- Maximize the Match
- Roth vs. Pre-Tax
- Finding the “Right” Optimal Savings Rate
- Invested Professionally
- Financial Wellness
- Distribution Service
“Here’s your seven–that’s it. Have you earned your seven merit badges?” Kmak says. “This is the future of retirement readiness in our industry. It’s one person at a time, and did you earn your seven merit badges?”
Kmak also discussed a specific marketing approach that can help participants engage in these actions, and how to persuade plan committee members to buy into the approach by “turning on the right switches” with compelling facts and figures.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
