Passion for the Participant
“RBG was built on the participant experience,” Larry Deatherage bluntly states.
The Co-founder and Managing Partner of Retirement Benefits Group (RBG) points to two finals meeting in the prior week, both that were over $400 million accounts.
“We said, ‘Everyone that walks in behind us is going to say they are awesome at picking funds and reducing fees.’ We’re really good at that, too, by the way, but the lowest cost and best performing funds in the retirement plan won’t matter if the participants don’t understand what they’re in and how to properly utilize the investments.”
It’s one of the reasons why, from day one, RBG has always offered one-on-one meetings with participants, something that certainly isn’t easy to scale but fits with the firm’s focus.
Roughly 10 years ago, it created a program called “The Passion for the Participant” campaign, which “incorporates our whole philosophy and thinking around the participant.”
“For those that request it, we sit down with them in person or remotely and do full financial and retirement plans for participants that they can take to their current advisor and implement,” Co-Founder and Managing Partner Anthony Franchimone adds. “We don’t know of anybody doing that who isn’t charging for it. It does differentiate us from all these other really good investment consultants who walk in and say, ‘We’re an investment consultant. We say we’re a retirement plan consultant.”
It’s a top-down approach that involves the HR team in the creation of education and communication calendars.
“One of the key pieces that we rolled out is the RBG Retirement Readiness Report,” he adds. “We provide a customized report to every single eligible employee within the firm.
The report lays out what each eligible employee needs to do from a contribution rate standpoint in order to meet their income goals. But it also provides investment advice. It outlines the amount the participant should contribute, and where they should place their money. That’s how we’ve been able to scale what we do, especially for larger employers with thousands of employees.”
From a fiduciary aspect, “it’s money well spent,” because none of the employees, participating or not, can then claim they didn’t know how much to save, how to invest their money or whether or not they are on track for retirement. These reports, which can also incorporate outside savings and other company-sponsored retirement plans, are sent as hard copies, in this age of technology, to their homes.
“It’s a firm-wide initiative for us. Anytime we can incorporate these reports into our overall fee, it’s a huge differentiator,” Franchimone states.
It also allows RBG to build customized campaigns at year-end.
“We have a comprehensive roll-up of all the data from the reports, so we can go to the plan sponsor and tell them, for example, ‘65% of your 40-year-olds are not quite on track to retire. Why don’t we do targeted campaigns to those individuals?’ They’re completely customized at the plan and participant level with pictures, letters and notifications that can come from the president of the company that will say, ‘Hey, this is how important it is to us.’ It’s probably the most phenomenal tool that we’ve seen in the business at the participant level.”
Deatherage proudly points to a large RBG client as proof of the firm’s effectiveness.
“We took over six years ago. It was a $360 million account at the time and now it’s close to $1 billion. They had no financial wellness program. They had no participant engagement from the vendor. Their fees were 86 basis points, which wasn’t competitive, and it was full of proprietary products. It was everything a litigator would be reviewing with a larger plan.”
After implementing the retirement readiness reports and adding Financial Finesse for wellness, the plan now has a 95.6% participation rate and an average deferral rate of 7.7%. The average account balance is $152,000, and their overall investment fees are down to under 30 basis points.
“We understand what it takes to build and consult to a best-in-class retirement plan and how to measure it, regardless of size,” Deatherage concludes. “In addition to lowering fees and providing best in class investments, it’s all about the retirement outcomes and creating a life-long, positive experience for the participant.”
Larry Deatherage is Co-founder and Managing Partner of San Diego, Calif.-based Retirement Benefits Group.
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.
