Retirement Plan Movers and Shakers
“We evaluate participant success in two ways,” Jessica Fitzgerald says matter-of-factly. “No. 1, are participants staying in the plan, and No. 2, are participants saving more over time? Auto-escalation can assist with the latter, but if we can accomplish these two goals with automated features, we can improve participant outcomes and ultimately work towards successful outcomes for all.”
Fitzgerald, Senior Vice President and Financial Advisor with Michigan-based Fitzgerald Group of Morgan Stanley Wealth Management, leads a team of five financial professionals. Their primary focus is retirement plan consulting in the small/mid-size market with plans between $1 million and $250 million in assets.
Advisors and plan sponsors can immediately improve participation rates by simply making common-sense adjustments to plan design, she adds, and a unique client with a unique situation illustrates her point.
Two Men and a Truck is a rapidly growing moving company with approximately 300 locations across the country. When they engaged Fitzgerald in 2014, participation was 50% with 107 participants and $4.2 million in AUM.
“We started quarterly one-on-one participant meetings, introduced auto-enrollment and auto-escalation, and we asked human resources to take an active role in sending reminders to employees about the importance of retirement planning, which increased interest,” Fitzgerald explains. “In the last seven years, participation has grown to 86% with 1,386 participants, $27.2 million in assets, and an average deferral rate is 7.8%.
Here’s where it gets really good—because it’s a corporate office with franchises in different states, it required a structure similar to a multiple employer plan (MEP), one that could account for the individual businesses but leverages the wider company’s economies of scale. The solution was a “401k exchange” for franchise owners in the Two Men and a Truck system.
“We put an RFP out, and Jessica was really the only person that could find that type of solution for us,” Kristin Bartley, Corporate Controller with Two Men and a Truck, recalled. “We were just super impressed with her customer service at the time. She was incredibly involved in every aspect of creating and executing that plan.”
According to Bartley, the company takes almost a paternalistic or maternalistic attitude towards its employees and their financial futures. It’s one reason for its early focus on financial wellness and one of Fitzgerald’s first clients to adopt Morgan Stanley’s financial wellness platform.
“We hopefully get them contributing to their 401k sooner rather than later,” Bartley says. “We’ve always had the mindset that we want to do whatever we can to better our employees, so their lives are better for having worked for us, whether they stay or move on to bigger and better things.”
Fitzgerald understood and incorporated this into the solutions she offered, and the results speak for themselves. Yet despite the clear success of the plan and the creativity and hard work she brought to it, she stays humble.
“I would like to take all the credit for the success of that plan,” Fitzgerald concludes, “but it’s a team effort with the support of the plan sponsor. It’s just a great partnership.”
Jessica S. Fitzgerald, CIMA®, CRPS®, CPM® is Senior Vice President – Financial Advisor with The Fitzgerald Group/Morgan Stanley Wealth Management.
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.
