Plan Design and Hard Work
Austin Gwilliam and the team at GRP Financial took a private school client from a 45% participation rate to over 99%, with just one employee out of 350 deciding not to participate and an average deferral rate that jumped to 7.5%. from under 3%.
How’d they do it?
“Plan design and hard work,” Gwilliam, principal with the Southern California-based firm, says matter-of-factly. “It was that combination, as well as helping the client see the value of automatic enrollment and automatic escalation.”
A focus on fundamentals and a lack of gimmicks seem to be a theme for Gwilliam, who immediately points to key drivers of participant and plan success.
“We really dissect participation and average deferral percentages, and not just end-of-year data, but quarter by quarter in committee meetings,” he explains. “We also look at it by age and salary, and might notice an entire employee group or demographic is lower than they should be. We’ll have a goal for that group, and we’ll do targeted campaigns and employee meetings just for that specific group.”
It might be a meeting strictly for those that are under age 40 on topics relevant to their life stage.
“GRP Financial will not only be there for the group meeting, but we’ll be there to meet individually and one on one,” Gwilliam says.
While noting the importance of the income replacement ratio, he adds that it’s “tricky” because participants often fail to provide a full accounting of relevant income sources and outside assets.
“But we’re targeting 75%, and we’ve seen good success with plans moving the needle there, and a significant number of their employees that are on track for retirement.”
“No gimmicks” doesn’t mean GRP Financial isn’t cutting edge or abreast of technology, and a competitive differentiator to which Gwilliam points is in-meeting polling recently instituted with a large, well-known client.
“Participants have their phones out, and we get really great audience engagement and participation. It’s almost like something you’d see at the NAPA 401(k) Summit or similar event, yet in a smaller setting at an employee meeting. ‘Does the topic we’re discussing directly impact you? Is it valuable? Now that we’ve talked about the difference in these types of allocations and investments, do you have a better understanding?’ It allows us to get real-time data and to adjust as needed. That’s cool and unique.”
Another innovative idea uses behavioral economics and positive peer pressure.
“We identify who we consider ‘champion investors’ at the company,” he says. “We get a report from the recordkeeper that shows deferral percentages by name. We then go to that individual and say, ‘Hey, we noticed that you’re deferring a significant amount. We have this upcoming employee meeting. Would you be willing to spend five or 10 minutes at the beginning of the meeting to talk about the value that retirement planning has for you?’ We’ll email a company spotlight of that individual to their peers. They’re typically going to listen to that individual that they work with and know well much more than Austin from GRP. So, it’s peer to peer.”
And honesty about who GRP Financial is and why they’re there goes a long way in ultimately building trust.
“Getting calls on a regular basis and seeing our faces make them trust us that much more, and the results speak for themselves,” Gwilliam concludes. “There’s no hidden agenda in meetings to try to generate financial planning business or anything like that. It truly is about better results and outcomes for participants.”
Austin Gwilliam is principal with San Juan Capistrano, Calif.-based GRP Financial.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
