Developing a revolutionary new concept to get workers to save more, introducing “life hacks” to help retirees lead a more fulfilling retirement—like all our Top Advisor By Participant Outcome profile recipients (TAPO), George Fraser has been very busy since getting the recognition in 2017.
“The practical, down-to-earth example he described in his profile is one of our favorites.”
Not only was Fraser, Managing Director of the Fraser Group at RBG, the April TAPO for that year, but he was also the overall 2017 Top Advisor by Participant Outcomes recipient, thanks in large part to his hope-over-fear focus that continues to this day.
His energy and enthusiasm are infectious, one of the reasons he was able to convince famed behavioral economist Shlomo Benartzi (in a parking lot, no less) to look deeper into his “pennies on the dollar” idea. It changes the framing from a percentage of income to pennies per dollar to increase comprehension and deferrals.
Benartzi and the Voya Behavioral Finance Institute for Innovation released research based on Fraser’s methods in late February in conjunction with heavy hitters from Carnegie Mellon University, Cornell University, and UCLA.
They found that workers in the percentage condition had an average savings rate of 6.9%, whereas those in the pennies condition had an average savings rate of 8%. To put it in perspective, this savings rate is nearly as high as the savings rate of those participants in the highest income group (a mean salary of $115,000), who saved 8.5% of their salary.
“It’s a model I’ve used for a long time, and its success is evident in the increase in deferral rates among my clients,” Fraser said upon the release of the research. “People don’t understand the language our industry uses, so I see it as appealing to the lowest common denominator. It’s about implementing a more attainable, hopeful approach to retirement.”
His retirement hacks include equally simple yet impactful examples like putting a boat up for charter for two or three days a month in order to afford it for personal pleasure the rest of the time. Or putting a rental on Airbnb one week a month in order to use it for the other three.
Kicking the habit to save more
The practical, down-to-earth example he described in his 2017 profile is one of our favorites.
“I had a conversation with a security guard at a company whose plan we service,” Fraser said. “It was a friendly conversation that began as small talk as he escorted me back to the cafeteria following an education and enrollment meeting. At the time, he made $17,000 per year and essentially lived paycheck to paycheck.”
Fraser asked how his 401k was doing. The guard said fine and volunteered that he had quit smoking. Fraser expressed delight and asked him when.
“Six years ago,” was his reply. “You sat with me in an individual meeting, I explained my situation, and you said if I gave up the cigarettes and put that money in my 401k, I’d have a significant amount set aside when I decided to retire.”
He told Fraser that he had one last cigarette after their conversation, tossed the pack in the trash, and since that day, six years prior, he has saved an additional $1,500 each year.
“For a guy who makes $17,000, think that might make an impact?” Fraser concluded. “This is our job—to teach people how to save. It’s the most important thing we do and something of which I am immensely proud.”
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.