Financial Wellness for 401(k) Advisors | Excel Live

[0:00] Justin: Some are behavioral modification based. Some give you steps to go through. So it's. We try to help the advisor walk a sponsor through and make sense of what that landscape. [0:08] JD: I didn't even realize that it went that comprehensive. We are here at the Excel 401K conference, the advisors conference in Las Vegas, Nevada at the Paris Hotel, aka Sin [0:39] Chad: City, which you're staying. Good. Your wife is here. You're well behaved. No losing money on the tables last night. [0:47] Justin: Now you two, on the other hand, [0:48] JD: I am up in the gambling. We are behaving. We are all staying together in a hangover suite. Everyone has their front teeth. No one has married someone. No one's got a face tattoo. [1:02] Justin: But jd, AKA Alan, is hosting Between Two Ferns as well. For those of you who had not seen the show, I don't want any [1:09] JD: references to Zach Galifianakis. Thank you, please. And today we have a very special opportunity. Being at this conference, we have a guest who's going to sit right there in that open spot between two pillars. Give a warm round of applause for Mr. Patrick Delaney from T Row Price. He is. [1:29] Chad: Welcome in, sir. Welcome in. [1:31] Mark: Have a seat. [1:31] JD: To the jungle. Mr. Delaney is on. [1:35] Chad: You knew what you were in for. [1:37] Justin: His career was signed up for and [1:39] JD: now it's plumping down into the depths. He's joined us now. [1:43] Justin: Welcome to assuming it can get lower. [1:46] JD: But like every episode, we always have to have the beer of the episode. So Mr. Johansen, tell us what we're drinking. [1:54] Chad: You have Craft Haas, which is a local brew, by the way. This is going to be an IPA. I know that JD's going to like it. [2:04] Justin: Delicious IPA. [2:05] Chad: But it is brewed with a combination of Cascade, Centennial and Chinook hops, pine and grapefruit. [2:11] JD: It's not fruity, it's very ipa. You're not happy about that? No, it's rough. It's rough. Okay. [2:17] Justin: And the beer last night was rough. [2:20] JD: Cheers, everybody. [2:21] Chad: Cheers. [2:21] Justin: Cheers. Thanks for having me on the show. [2:24] JD: Starting right now, we are going to have a word of the episode. If you say this word during this filming, you must drink from your beer. And the word is this. Last time you can say it. Participant. Okay, participant, participant, participant. [2:39] Chad: No, that was the last time you. There you go. Take three of them. [2:44] JD: Patrick is from Tiro and T Rowe has a huge emphasis right now on financial wellness. One of the first things I want to do is for sake of the show is let's define retirement readiness verse financial wellness before we dive in. And for me, retirement readiness, or I should say for us as a collective. Retirement readiness is the focus on 401k employees, not the P word, that are, well, moving towards and saving towards their retirement and funding that retirement. That's retirement readiness in a variety of ways. Financial wellness can be part of that for sure. But then it's all the things outside of the 401k as well, right? College savings, budgeting, health care. I mean, everything that has to do with your finances. [3:30] Chad: I think it's good too, to say wellness specifically that term. I think it's holistic in nature to talking about your overall health as it is. Regard to financial side. [3:41] JD: Fair enough, fair enough. [3:42] Chad: Whereas retirement readiness is about being ready to retire. [3:45] JD: So within our 401k industry, there's lots of hype, lots of talk around. Yes. Believe it or not, plan advisors adding this to their practice, making this part of their services to a plan sponsor. Okay. So without diving deep into the definition of it, I want, because we've talked about that before on the show, I want to get more into real, actionable, tangible takeaways for advisors they could use. Okay, so let's say I'm a financial advisor. I'm a plan advisor. I understand what financial wellness is. I get it. I'm on board. I'm drinking your Kool aid. I now want to dip my toe in. I want to add it to my practice. What can I do? What's an easy step? How specifically do you want me to add this? Give me some examples, Chad, starting with you. [4:35] Chad: Yeah. There's obviously a variety of different ways and as we chatted about this prior, what we were really looking for is an actionable way to dip that toe. So the example I was thinking about and I actually heard in this conference earlier today. [4:47] JD: Meaning you stole this from someone. [4:48] Chad: I stole this from somebody else. I mean, that's where all good knowledge comes from. Right. [4:53] JD: I come up with some of my own ideas from time to time. [4:55] Chad: You do pretty good one right here. I. There was a conversation about an advisor deciding that he was going to sit with a. The folks who are involved in the plan. Like that folks. There you go. And, and he was going to spend time chatting with them about any beneficiary designations, not just inside the 401k but in any walk of their financial life, whether that be with their, their personal savings account, whether that be with revisiting [5:23] JD: any and all beneficiaries. [5:24] Chad: Yeah. Life insurance, any and all beneficiary forms to just help take some of that stress off that if something were to happen to you, who's gonna get access to this money. Who's gonna be the beneficiary of these accounts that you have. And I thought that that was neat as a, as a young person. It's relevant for me. I had this conversation with my mom last week. My dad passed when we were young and she said I never found his 401k. And so I started to get on the conversation of beneficiary forms with her. And I thought there's probably a lot of folks out there that don't know outside of the 401 because it is right. Required in different walks of their life. Who the beneficiaries of their life insurance. [5:59] JD: You know what I like about that example too is it seems pretty easy to implement. Like if I'm a plan advisor, I could tackle that one, I could add it. It wouldn't take a ton of time and you're doing some good. [6:10] Justin: Well, it's also easy from a plan participant side. [6:12] JD: I mean to even say drink. You said the word drink with you. Justin, Give us another example before we go there. [6:21] Justin: It's. It's so easy thinking about even from your mom's perspective, it's so easy just to set it and forget about it. It's probably the last thing on your mind as a participant when you go through a tragedy like that. [6:29] JD: Right. One more time, I feel like you. [6:32] Justin: It's gonna be that. [6:35] Chad: Don't call me that. [6:36] Justin: But another one. You know, we talk about it all the time. There's 64%. Is that what it is? [6:45] Mark: 67. [6:46] Justin: That's a made up stat. That is not a made up stat. But 64% of Americans do not have $1,000 in their account to handle any emergency. So something as simple as, you know, being that that advisor sitting with the employees and saying, hey, let's start off just by saving $1,000 this year. [7:06] JD: I love that idea. What a simple way to pull all the employees, find the ones that are lacking that little emergency fund, set up some type of process. Maybe it's a two year deal. As crazy as it sounds. You know, let's say conservative for them to put aside $1,000 aside out of the plan, out of everything else, just for an emergency and then go back to the employer and go look, now that stat, that 64% stat is not true of your employees. They all have that. [7:33] Justin: Would you and think about bringing it full circle. Like with those employees, they probably before they even started that didn't even think they could save a thousand dollars. So now that they see that they can actually do it, they'll probably want to do it again. [7:43] JD: It's a good momentum. [7:43] Chad: So here would be my question. Would you. Would you try to encourage them to put it in the plan or outside the plan because they get access to it if it's in the plan. [7:52] JD: Take a. [7:53] Chad: Assuming there's loan provisions, shame on you. [7:55] JD: Now you're increasing contributions 401k. [7:57] Chad: Now you're increasing. Hey, you gotta touch on ROI. [8:04] JD: Well, let me answer your question. Outside of the plan, Outside of the plan, was the idea any other options or what? [8:11] Justin: You guys said the common Core there. It's easy, it's actionable, and it's a small win. Anytime you can do something that's a small win, it tends to snowball over time. Something else that I've heard is a lot of folks will say, hey, you got to pay off your highest interest debt first. Take the opposite approach there and say, hey, pay off your smallest balance first. Once you pay off the smallest balance, you get the endorphins going, the dopamine's going, you get the small wins under your belt and you're going to want to do more beneficiary review. Very easy emergency fund, very easy. Pay off your smallest balance and you can start to snowball effect. [8:46] Mark: I think that's becoming a common theme though. Even in the session we sat on earlier today, the whole idea of having this part of your wellness was to start small, to have like you're saying, I like how you just turn it into the small win on a personal level. But even as an advisor, starting small and getting in front of those folks and having. Having them have little goals at a time I think is key, that small is a good transit, good piece to financial wellness apparently, for sure. [9:19] Chad: Big win. [9:21] JD: You guys told me that at that speaking event too, that they said, hey, another thing to consider in terms of small is that if there's 100 employees maybe trying to roll out a program like this, talk all 100 can be very intimidating. Maybe you first start with the 25 that are actually interested that say, yeah, I would like to do that. And then you get some momentum that way. And I thought that was pretty interesting. [9:46] Justin: The water. [9:46] Mark: Most people don't want to participate in this. You have to look at the ones who are actually engaged. [9:51] Chad: You want to make an impact, right? And so you impact those that are willing to allow you to help. [9:55] Justin: Think about what that can do though. [9:57] Chad: What's that? [9:58] Justin: Think about what that can do. You impact those, those individuals. People start talking around amongst each other, cooler conversation What? I said the water cooler effect. [10:07] JD: So in summary of that, I think we agree that, yes, there are tons of ways to get into it. Financial wellness as a plan advisor, best to pick the easy ones, the small wins that Patrick referenced and get something moving. I mean, that's true in lots of walks of life. [10:22] Chad: The points that we just gave too, thinking about it holistically, none of them are going to cost the advisor any money to build that into the practice. It's going to cost time. Right. But you can create this type of conversation in an education meeting that leads to a sit down or further actionable items that gets to financial wellness without putting a huge burden on you financially or your time. [10:45] JD: We're going to pivot to what Patrick and T. Rowe have kind of built and let advisors know about that here in a second. But before we do that, I want to have a little fun and play a little game at Mark's expense. [10:58] Justin: You ready? [11:00] Chad: Shocking. [11:00] JD: Patrick is going to answer three trivia questions for us. And every time he gets a question correct, Mark is going to drink from this coffee mug. [11:11] Justin: Feeling a little. Feel a little hazy on these. [11:13] Chad: Patrick, you want us to switch these? [11:15] Justin: No, no, no. [11:16] JD: You can leave the top on. Leave the top on. [11:18] Chad: He needs this. The camera needs this. See that? [11:20] JD: Why do you say that? [11:22] Chad: Holy cow. [11:23] Justin: Hey, it's insure. Just. It's insure. Remember insure. [11:25] JD: You love that. Mark, I want you to know there is not an ingredient in that that has not come from this conference right here. I just had some fun and did a bit of a suicide, if you will call it a 401k conference. [11:40] Mark: And there's nothing. And there's nothing related to alcohol in here. [11:43] JD: There is alcohol in there. [11:44] Mark: Oh, I thought you were going non alcohol. [11:46] JD: There is alcohol in there. [11:47] Justin: It's a history of wellness. [11:49] JD: So, Mark, cross your fingers. Yeah, here we go. [11:54] Justin: Wrong. [11:55] JD: I don't have the drinks. The first trivia question. [11:57] Chad: Hey, there's no collusion allowed here. [11:59] JD: It doesn't matter. Just Mark, stop getting in his head, okay? It's guest of the show. First question, Patrick, for you is the famous music television TV station MTV. I Want My Sorry was launched in 1981. What was the first music video ever played? Don't answer yet because it's multiple choice. Was it acdc? Back in black? The Buggles video killed the radio star. I'm sorry if I got that band name wrong. Aha. Take me on video killer. [12:35] Chad: Boom. [12:36] JD: Give it a sip, Marcus. Let me know what you think. I left the top on for You. I don't think that'll fit through the hole, but okay, give it a try. It's that thick. It won't go through the hole. [12:47] Mark: All right, go on. [12:53] Chad: Oh, man. In a swish. [12:55] Justin: Like mouthwash. [12:58] Justin: Better than you expected. [12:59] JD: Next question. [13:00] Chad: Put some IPA in there. [13:01] JD: Now, on New Year's Eve 1967, Evil Knievel famously attempted to jump the fountains in front of which casino, by the way? This ended in numerous serious injuries to his body. But was it El Cortez, the Mirage, Caesar's palace, or the Bellagio? [13:20] Justin: I'm gonna go the Bellagio. [13:22] JD: Damn it. It's Caesar's Palace. Mark, you're off the hook for one. [13:28] Chad: There's one last question. [13:29] JD: Last question. And Mark, I want a big swig if he gets us this time. [13:32] Chad: Lit off. Swig this time. [13:33] JD: What was the exact speed the car in Back to the Future had to go to to travel through time? Was it 86 mph, 101 mph, 187 mph or. Patrick, was it possibly 88, 88 mph? [13:56] Justin: It was 88 miles. [13:57] JD: It was 88 mph. [13:59] Mark: Is there a collusion? [14:01] Chad: Hold on. [14:01] Justin: Before you drink that, we need a mark. [14:03] JD: That is a combination of beer, cream, almond milk, sugar, beer. I think now that I'm gonna get [14:11] Mark: some of this juice. [14:14] JD: Everything I could find. Coffee still good? Both caffeinated and non caffeinated. Okay. Decaffeinated. When you're listening, keep it down. [14:22] Mark: Whatever's on top. [14:23] Justin: It makes it weird. [14:24] JD: Yes. [14:24] Mark: Okay. [14:24] JD: How? Well, I'll ask you later. Anybody else want to try? [14:27] Justin: No. [14:27] JD: As I mentioned, let's. Let's pivot to what T rowe has done. And what I'd like to do is first introduce the website and tell us a bit about it. And then maybe a little bit of focus towards third party tools and things advisors could really leverage. So the website itself is called WellnessWorks. [14:46] Justin: Tieroprice.com WellnessWorks. [14:49] JD: Boom. We're going to slide that right on the screen. So tell us a little bit about it because apparently you had a hand in making it. [14:55] Justin: Yeah. So you teed it up perfectly earlier. So you have plan sponsors that have heard about financial wellness. They say, I think I want to do something about it. I understand why it's important they see the statistics saying participants are stressed. [15:09] Chad: God damn it. [15:10] JD: You caught yourself. And he called himself, that's an auditor there. [15:15] Justin: Employees are stressed. And so we tee the advisor up to walk the plan sponsor through every part of that conversation. So the plan sponsor understands why it's important. The advisor, he's got a huge book of business says well who do I talk to first about it? How can I identify a good candidate for a wellness program? So we have resources on there to say let's take a look at the plan statistics, let's take a look at the corporate culture and philosophy, let's take a look at the demographics. Three good places to start to see if you're a good candidate for a wellness program. You've identified a good candidate, then you go, well where do I get the wellness? There's a lot of different places to get it out there. There's a whole bunch of different financial wellness providers that have popped up over the past three or four years. So we've tried to break that down. We've got a piece that lists 18 to 20 top providers. A lot of these have already inked formal partnerships with record keepers. So they're already platform linked and we give them a little synopsis of what the provider is all about. We give them contact information because you think about it, some people are wellness providers are just education based. Some give you access to a phone bank of CFPs, some give you access to one on one or group meetings. Some are behavioral modification based, some give you steps to go through. So it's. We try to help the advisor walk a sponsor through and make sense of what that lands. [16:32] JD: I didn't even realize that it went that comprehensive. I was thinking tools, calculators, you know, and things. There's a lot of really robust support out there. [16:43] Justin: There is. And then if you want to look and vet a financial wellness provider, what are some questions you want to ask? [16:49] JD: That's perfect. And that's there at the website. [16:51] Justin: It is. [16:52] JD: Can we a couple of examples and again I know this is an expansive subject, financial wellness. [16:59] Mark: This is multiple shows. [17:00] JD: It could be true. [17:02] Chad: What's that relevant? [17:03] JD: Give me a couple small examples of this. These types of third party tools. Some names we might recognize. [17:10] Justin: So a big one I would say is Smart Dollar is a big one. Tiero Price has a relationship with them. Double net pay is another one that's widely used in the industry. Financial finesse is a big one. Retiremap is another one that I know is very advisor friendly. [17:26] JD: There you go. [17:28] Chad: Different in terms of what they're offering. [17:30] Justin: Yeah, they are. Some are just online content platforms. Again some give you access to financial professionals. It's very. The good thing is that there's so much out there. The bad thing is that there's so much out there. But the good thing is on top of all of that is that there's not one right way to do it. You can find the model that fits your practice. [17:50] Chad: And the reason I brought that up again and you hit on it as you introduced initially is because we talked about starting small. When you introduced the website initially you said identify a client. So you're already narrowing the field to start small with a client you think would appreciate a financial wellness program. And now from there you're determining what it is that you believe will be impactful for them. And you're looking for a resource, a third party provider, in this case, a resource to narrow that field that's going to target those areas that you know will be impactful to that client. So small, small, small, small is what we've been talking about, really narrowing that field of the people that this will create the greatest benefit for. [18:27] JD: Can we, to summarize this and kind of start to wrap the show, can we go back to a drum that I've been beating on a consistent basis, which is this, this hippie kind of do good vibe that I want advisors to go in and look less like a funds fees, fiduciary kind of guy, even though those things are important, but to show those decision makers that they care about the people. And I've talked in the past about doing that through retirement readiness. Well, come on. Financial wellness is a huge step towards looking like a do gooder that's really trying to move the needle and do what's right by the people. [19:03] Justin: The number one answer sponsors give as to why they seek out a wellness solution solution is it's just the right thing to do. [19:08] JD: It's the right thing. Perfect. Love to end on that. It's just the right thing to do. Any they can get a hold of T. Rowe Price. Pretty simple. Go. Look, I'm giving you a little ad space here. We'll throw contact. They could reach out to Patrick, we'll give that there. They've got local reps in their areas, [19:25] Justin: territory reps, you name it. We can give you the contact information. You go to the website, Wellness Works. [19:30] JD: They're all well versed on this stuff. [19:32] Justin: All of them, all of them can do it. They can give presentations, they can talk to you how to walk your clients through the conversation. [19:37] JD: All right, awesome. I'll also give a little plug for us. If everyone's on Instagram these days, right? Not you. You're there, but you don't do anything with it. First of all, up your cool factor, get on Instagram because Instagram's not even cool anymore. My kids are on Snapchat. That's where you're supposed to be. So, advisors, it's okay for you to get on Instagram now because not even cool anymore. So it's a perfect fit for you. But if you're going to do that, follow Tireholics because you get to see pictures of Chad and Aruba and a Speedo. You get to see cool things that our art director guy creates of us. It's good for a laugh. [20:15] Chad: It's fun what they want to see. [20:17] JD: That's my promotion. I didn't ask you to check out our TPA firm or check out our sales guys. Check out our Instagram, Chaz and Espido. No value there. No value. There's zero value. But the laughs were something. We are the retireaholics. We are changing the retirement plan industry one beer at a time, one IPA [20:38] Chad: today at a time. [20:39] JD: Thanks for joining us and we'll see you next time. And, Patrick, we're sorry what we did in your career today, but it's all right. You'll rebound. He actually made us.