Post-Pandemic Fiduciary Reviews & Point of Sale

[0:05] JD: This is the fireholics chauffeur in place. [0:09] Chad: The way it. I love that. There's Nothing like that 400k Friday's intro music, man. I mean, when you hear it, it [0:17] Rick Unser: just soothes the soul so much that it can put you right to sleep. [0:23] Chad: If you don't know, now you know. Mark, why don't you introduce our guest? Who the hell is you with us today? [0:28] Mark: I don't think our guest needs introduction. However, our guest today is the absolute amazing Rick Unser, host of my favorite podcast, my first sponsor of the robe 401k Fridays. I had to dress up for the occasion, as you can see. So as you can tell, the rest of my colleagues did not. [0:53] Rick Unser: So I think we can all understand [0:54] Mark: where the respect level is amongst our group for you. [0:58] JD: I put on underwear today. [1:01] Chad: And also, gentlemen, don't forget, we are going to commit to this game of don't touch your face. And so if you do touch your face, which you should not, you should drink. And if you've got some kind of hard alcohol at your table, do that. Mark just touched his face. [1:18] Rick Unser: Don't touch your face. [1:19] JD: Way to go, Mark. [1:21] Chad: We had talked a little bit about post pandemic fiduciary review meetings. We talked with Janya on the show. I'd love to get Rick's vibe on it. And then I'd also like to add to it. What would a post pandemic fiduciary review meeting look like? But also what does a post pandemic point of sale look like for a prospect? So the mic's all yours, Rick. How do you feel as an advisor about. About what these meetings might look like once we get through all this shit? [1:51] Rick Unser: Yeah, I'm giving that a lot of thought right now. And just personally as well as from the team standpoint, what are we going to be talking about? What tone are we going to take things of that nature? Because I think the reality here is that our world is on very much of a quarterly cycle. So we're sort of at a perfect time right now where we've hit this market inflection, we are coming up on planning for these first quarter meetings and I think the tone to strike has got to be somewhere between, hey, this is a long term investment and we have all these great long term monitoring tools and things look wonderful versus the world's falling apart and we need to make major decisions in our 401k plan as a result. So I think the truth is somewhere in between and I think as people are thinking about what to talk about in these meetings with clients coming up. I think there's a few things just to go through. I think a couple things from a blocking and tackling standpoint. What's going on with your service partners? Does everybody have a business continuity plan? Is everybody still viable? Are you still getting the services that you're paying for? I think a couple basic things like that are going to be important to cover. I think. I think when it comes to investments, I think again, looking at your traditional monitoring criteria that you have through your investment policy statement, through whatever maybe your advisor's helping you through to put funds on a watch list or whatever. But I think it's also important to reflect a little bit on the short term. I know we don't spend a lot of time thinking about short term investment issues, but I think it is really important here to look at how investments held up in, in this shock period that we just went through. And I think as plain sponsors have made decisions over the years and maybe have chosen some investments because they were more conservative, that is, maybe they chose a target date strategy that had better downside protection to it on paper. Well, did that hold up and if it didn't, what does that mean? I don't know, but I think that's a good conversation to have. The other thing I think that's really important about that is I think there's a lot of people that are going to have to look their employees in the eye. They're going to get questions from people and I think having confidence to be able to say, you know, we just reviewed our plan, we looked at how it performed during the market and yeah, people lost money, I lost money, I'm in the plan. But we're really confident about the path we're on, the investments we've chosen, and feel good about how this plan is set up to help you recover and save for your retirement over the long run, I think those are some important things to do. If not from a fiduciary standpoint, just from a good employer perspective. I think the other thing that's really important is to look at what's actually going on in your plan. There were some articles that I didn't really like that came out early on in this whole thing, which talked about record keepers are being flooded with calls and people are moving to cash or stopping their contributions. And that actually kind of prompted me to put some things out through various channels that I'm on. And I think it's important for employers to really take a minute, ask your service partner hey, what did happen in our plan in the first quarter? Did we have people go to cash? Did we have people take a lot of loans? Did we have people initiate hardship distributions? Did we have people stop contributions, whatever it might be? What does that data say about what actually happened in our plan? And look at that, look through that and understand what that looks like. Because maybe that impacts how you communicate with your employees. Maybe that impacts decisions that you make going forward. I don't know. [5:28] JD: Perhaps I'm a bit jaded, Rick, but when I started seeing those posts around and articles and news feeds around people moving to cash, I started to think behind the scenes, why? And again, perhaps I'm too jaded. But my mind initially went to, well, where do most of these folks make their greatest spread? It's on their cash equivalents. It's their stable value. It's their fix. And I'm going to, holy shit. Are they really trying to flood the market with some fear and get assets to move into cash because they know their spread on that money is going to make them more money or not? But that's immediately where my mind went when I started to see that. [6:10] Chad: You mean, you mean cash equivalents or, [6:12] JD: you know, I'm saying fixed stable values. [6:15] Chad: I thought you were going to say the reason why participants want to move to cash or the reason why they would have is because it's a zombie fucking apocalypse, bro. [6:26] JD: I'm saying why news, social, why these articles were being pushed out, not, hey, Chad Johansson, the participant moved to cash because we're seeing, we're seeing that a cash move is. And they're not quoting statistics or where they're getting the info from because they're Twitter feeds, they're 130 characters. And my mind immediately went to, It's a profitability thing. They know they're going to gain a greater margin on those dollars. [6:52] Chad: I like a lot of the points that, that Rick made, actually. When you started to talk about investments in the review of how the investments performed, I was, I was judging you, Rick, being like, oh, God, here we go again. Financial advisor, perspective advisors know about. Yeah, but you actually gave it a new light. Like, I like the way you positioned it in terms of, hey, let's see how it did in this volatility. Let's see how it did in this crazy world news. So I actually like what you said, but won't it also be very much like a trying to look at assessing the damage? Right? Like, okay, how many of our employees were furloughed? I'm talking almost outside the 401k a little bit. And were we able to bring them back? Were those 401 participants? Were they not 401 participants? Did we have Covid loans? Did we not have Covid loans? Did we have hardships? Did we not have hardships? And then yes, of course. Do we need to do some type of customized education to help these people understand, like what actually happened? Which is some of the points that you were making. But I think the moral of the story is originally the subject matter was how different will this meeting look now that we've gone through this than what it would have looked like. And I think clearly it's going to have some different bullet points on that agenda, right? [8:17] Rick Unser: Yeah, absolutely. And I think to your point, it's also somewhere in the meeting and maybe this doesn't make it into the fiduciary notes or whatever, but I think it's just taking stock of, hey, you know, here's, you know, here's what's happened within our business, J.D. to your point, you know, furloughs, terminations, whatever. Here's some plan changes that we've made and here's the impact on that. But I also think, and this is where I think things are going to start turning here quickly within companies. I don't know how quickly things are going to turn in the economy, but I had a conversation with a longtime client on Friday and just kind of checking in, hey, how you doing? How's it going? I know you've had to lay some people off. And he's like, hey, you know what? Yeah, we've made some tough decisions, but I'm not sitting here on my couch licking my wounds or bemoaning our current situation. I'm thinking about how do we come back bigger, better, stronger, how do we bring these people back that we've laid off? How do we stay in communication? How do we rethink our workforce going forward? So I think that's another thing that I think a lot of companies obviously aren't. They've had to make some really hard decisions. And I think people have made some of those really hard decisions over the last couple weeks and have done the best they can with the information they have. But I think most companies here are planning on surviving this, are planning on coming back bigger, better, stronger. So I think that's another part of this, that as partners on the retirement side of the world or whatever other business you might have with a particular client, how do you help them think through that? How do you be part of that recovery that growth, that new chapter maybe that this company is trying to open up in the history of their company.