In this follow-up interview hear how Eric Stevens continues to grow his business in the 403(b) market post Covid with virtual meetings, an integrated benefit analysis, and a passion for relating to teachers where they are at.
Ed Dressel 00:07
Welcome, everybody, back to another podcast with RetireReady Solutions. This is Ed Dressel and I have Eric Stephens with us again. I interviewed Eric three years ago when COVID was just settling in. And at that point, Eric, you were increasing your business. I'm excited to follow up with you. Eric, welcome. Good to have you here today.
Eric Stevens 00:24
Yeah, I'm glad to be here. Thank you for inviting me.
Ed Dressel 00:26
So for the listeners that didn't listen to your last podcast, why don't you just tell them a little bit about where you're at what you do, and the context of how that works?
Eric Stevens 00:35
Right. So I work for Clarity Financial based out of Bothell Mill Creek, Washington. It's a suburb just outside of Seattle. And we're a full service financial advisory firm. However, I strictly deal with mostly the 403b's within the business. And the great majority of that is teacher retirement, as we're the NEA retirement specialist for the NEA retirement program. So it's given us quite a bit of opportunity, having that backing of the NEA.
Ed Dressel 01:05
That's excellent. And I--you know--it was a stunning conversation three years ago. And I, I know a little bit about it--getting into our podcast--but when I was interviewing you, you talked about the growth that you saw during COVID, which is exactly the opposite of what I heard across the industry. It was like you stood out uniquely. And I've come to find out that you're a very innovative individual. I really got to know you a little bit. And it's like, "Wow, pretty impressive." Tell people what happened when COVID settled in and how you grew your business?
Eric Stevens 01:34
Yeah, well, so COVID hit and everybody was stuck inside, like you were and everybody else. And we were trying to figure this thing out. And from a business standpoint, we were looking at, okay, what can we do best to try to help service these people during this time that we're at, because the markets were uncertain. There were so many things going on that we just didn't know about. And so we'd always had the model where we would meet in the office or meet individually, one-on-one in person. And that was always the model. And that was always the standard model across the industry. With the pandemic happening, we had to shift real quickly. And so I never used Zoom before the pandemic. I've gotten quite used to it now. And we still have our office here, but we are doing basically about 99% of all our business virtually. So it gives us the opportunity to still be able to meet one-on-one in a fashion where it's comfortable. And we can kind of read body language, and all that kind of stuff. But it also, I think, helped us in a way where we're able to service more people because it's a lot easier to a day of work to just to jump on the computer than it is to drive to an office or stay up after class if you're a teacher. And so what we found was, just making that transition, it wasn't about what can we do to grow our business. It was what can we do to help those people out there that are worried during this time of uncertainty, which it was certainly a time of uncertainty for all of us.
Ed Dressel 03:09
So you grew your business. I remember you telling me that you got like 80% of people and group meetings to sign up for one-on-ones. That's great. COVID come COVID is gone. We're kind of getting back to a new normal, whatever that's going to be. We're still trying to figure that out. What are you seeing today, now that we're back to in person meetings? What are you doing for virtual meetings? How are you structuring your day?
Eric Stevens 03:30
Yeah, so it's, it's pretty much the same as we did from the pandemic. We have not switched away from that. Of course, anytime a client does want to come into the office or wants us to meet them, we're more than happy to do that. But what we found is, we get a lot more participation, if they can do it at their leisure, and not have to, so to speak, be formal about it, you know. We can talk about very important issues. But it doesn't have to be in a setting where we're sitting next to each other, when we can do it virtually. And actually, your software--the TRAK Software--is what I found--it's a lot easier to use that. We share it over the computer, because then we can show the different scenarios, aged 65 to 62. What does that look like? And it's because it's a very interactive software. So in that--and that's always been a kind of the foundation of where I've set my standard is, is through that TRAK Software, because I feel that that is something that all of those individuals that are in those professions that are able to have 403b's, they know what the retirement is, they know what to expect, and they don't have surprises. And that's across the board, whether they're my client, or they belong to somebody else that has taken care of them. If they need to know where they're at. And I think that--the--uncertainty creates more anxiety and more angst than the actual knowing. Okay, we might have a problem here. But really, we can solve it. It's better than the head in the sand mentality.
Ed Dressel 05:11
Well, I want the listeners to know I didn't set that question up for you. We didn't talk before and say, "How do you say TRAK Software?" You said that out of sincerity?
Eric Stevens 05:18
Ed Dressel 05:19
There's no way I would have done that. I appreciate that. I just want to follow up with a little bit of aspect of that, because I think of Zoom meetings and how much people are burnt out on them. And I seldom look forward to a Zoom meeting right now. And you sound like your teachers are wanting to go to a Zoom meeting with you?
Eric Stevens 05:38
Well, I don't think they necessarily want to do them. But it's, it's the necessity of keeping up with your finances. And it's just one of those things. And when you look at it, we've made it easier for them. Yeah, Zoom meetings do get tiresome, they do get kind of repetitive, but the pertinent information is still being communicated. And I think at the end of the day, that is the most important thing however, we get that communication out there. We just found that it just simply easier. And we can reach more people through this medium.
Ed Dressel 06:13
And the new normal that we're in allows for that, because we all live through way more Zoom meetings than we ever wanted to be in and it's like, settle down a little bit. So that's awesome. Zoom meetings and let you do so much with the teachers that you know, but how are you connecting with--if you're just using Zoom--how are you connecting to new teachers? How are you finding new customers for yourself?
Eric Stevens 06:34
Right, well, so that's where strategic planning comes into place. And so what we do is we spend a great amount of time listening to the needs of our current clients. What are the things coming up? And if there's a recurring theme, then we want to address that. And one of the recurring things--there's several recurring themes that we're starting to see. And it's--a lot of it doesn't have to do with the pandemic at all. One is, for example, we are working on a program to help set up those who are preparing to go on FMLA. Let's say they're having a child. So we'll walk them through that steps, because the great majority of our clients at some point, either do have children or are going to have children. And so we're giving them information, giving them access to information that they wouldn't normally have. And we do that, one because we think it's super important to our frontline heroes, the teachers, the police officers, nurses, firefighters. And so I think we tend to kind of take them for granted for what they, what they are. And I think, from the pandemic perspective, I think as a parent, with two children in public schools, I think we've gotten to understand a little bit more of that job. It's not as easy as we always thought it was. It's the old saying "it's no fun when the rabbits got the gun," right? We had to be the teachers. And it was like, wow, we had no idea that but it was so much work. And so we're really trying to now that we're post pandemic, and we're seeing some disconnect between some of those students that are doing really well and the ones that aren't doing well. That gap has grown. And so we see in the classrooms, that they're just being overloaded with all these things. So simply what they need when it comes to retirement is they want somebody that they know that they can trust, they can have open dialogue with, that will be there to answer their questions when they have them. And then they can let someone take it off my plate, let me deal with my students, let me deal with what's really important to me immediately, because I know somebody has my best interest on the backside. And that's kind of the approach that we've been taking as far as how we're reaching other people. And a lot of it is through these little seminars that we're doing that are completely different than any of the seminars that we've done in the past. We've always talked about just about retirement. Now, we're talking about full financial scope of everything, when it comes to college tuitions. And I mean, there's a lot of burden on families right now with inflation and the market uncertainties and all these kinds of things. And we just want to be that calming voice and to say, hey, everything's gonna be okay. It might not be perfect, but at least we know which direction we need to go in. And I think at the end of the day, that's the most important part. It's all about information and giving them the tools to be successful.
Ed Dressel 09:42
So let's talk about doing an FMLA presentation. Is that virtual or is that in person? How are you setting that up?
Eric Stevens 09:48
Yeah, so we're looking at two models. So we'll probably do a virtual one. Obviously, we'll do a virtual one because we know that there's going to be a lot of people who just can't make an in person meeting. And then we've reached out to the districts and union presidents because we have good relationships with them. And we're in talks right now of doing a live event, maybe right now in a restaurant or something like that, and let them have a little bit of downtime, but also get some information that's going to be well worth it as well. So we kind of we are, we are very full, economic picture when we look at things. We're not just like, one thing, one thing, one thing, because there's so many facets to it. If you're always worried about retirement, you got to enjoy today. And so there's always that in there. And I think that's where there's always that inner struggle with those who you're not closely following. Where am I at on my retirement? You have that angst of I just, I just don't know where I'm at, do I have enough? Do I not have enough? And that's really where we want to come in and just say, hey--and ideally, the best ones are, as we come in and go, you know, what you've been doing great. You're knocking them out of the park. The only thing I could do is answer questions, if you have any. And those are the best ones.
Ed Dressel 11:09
Let's say you do a virtual FMLA meeting. And how would you convert a contact in there to a prospect in the retirement plan? What do you say to them at the end of the meeting, that makes them go, I want to follow up with Eric later?
Eric Stevens 11:25
Well, first off, we've actually been in talks with people from the state who will come out and give a presentation on it, which is kind of neat, because they obviously we're not the subject matter experts in that. But we do believe it's relative information. But for example, and full disclosure, you didn't talk to me about this. But it goes back to that TRAK Software, when we go up to somebody and go, okay, you're 20 years into retirement. When are you going to be able to retire? If they can't tell me the answer, we need to build you a Gap Analysis report. We need to show you where you're at. And that's the baseline for everything, because that is the knowledge they need. We can give suggestions all day long but until we have at least a formula to work off of, we're kind of working as blind people. And really the TRAK Software allows us to kind of see in real time where we are today. And what are the ramifications of if I do this, or if I do this, or if I do that. So I think being able to get that one-on-one with me to be able to go down that and go, okay, we're gonna go through all this stuff. And I'm going to spend an hour and a half with you. I'm not going to charge you a penny for it because I think it's that important for you that have that information. Whether you take that information and take that report and go take it to Edward Jones. So it doesn't matter to me. It's--to me, it's about the knowledge. And now, obviously, I put a high priority on the integrity and the way I handle myself and handle my clients. So hopefully they would stay with me. But I think the most important part is to know that I'm looking out for them more so for their well being than I am anything about me. I could spend an hour and a half over and over all day long and be happy as a clam as long as these people are getting the information that they need.
Ed Dressel 13:20
And you've done well as a financial adviser. It's like there's that old adage, take care of the client. And don't worry about what happens down the road. It'll come full circle. And when you're passionate about helping people that comes across. I've heard the golden handcuffs like, "I'll give you the report if you sign up contract." But giving it to them and saying I'm going to trust you because I want you to trust me. There it is, living it out. So we talked about making new contacts, getting new contacts and moving into prospects and helping them out. With your current clients, the ongoing service, what are you doing for them?
Eric Stevens 13:56
Yeah, so annual updates is a big one for us. Once again, that's the backbone TRAK Software. Annual update always includes TRAK Software, because the more information we know, the more things that we can do with that. And so for us updating those on at least an annual basis. And then of course, you have lots of--every year the maxes go up. So that gives us an opportunity to go "Hey, the max has gone up, let's get your new Gap Analysis report. We can update your your current salary, we can see where your your DC account is at. So we're able to really look at the full picture of everything with our current clients. So they're informed and know the market may be down but this is the strategy we're going after. And it's a it's a proven strategy over time. And it's not one of those things. I need to look at it every month. No, you got 20 years until retirement. Relax. Deal with the acute stresses of your job and let us deal with this other stuff. And you can be as involved we're disconnected from the process as you want to be. Because some people want to be very, very much involved and some people just want to go, I want you to deal with it, because that's not my job. And I totally get that as well.
Ed Dressel 15:11
Just a couple of pieces of information I want to follow up there. I've been working with school districts a little bit closer and become familiar with the attraction and retention issue related to employees. Do you see educating individuals about their pension system, their state pension plan? Do you believe that's helping them retain their stay at their employment longer, and saying, "You know what, these are difficult times. I'm going to stick here though, because I know my retirements gonna be good."
Eric Stevens 15:39
Yes, that is what I would say is the number one theme that I've seen, in particular, probably since Christmas break until about now, I won't say a lot, but I'll say, probably at least a half dozen emails this year, saying I need to get out. My mental health, different issues. Because of--I think a lot, a lot of educators, they're so emotionally invested into their students, which I love, because that makes for great, great, great, educators. But there's almost also that downside to it too, because it takes a toll on them as well. And so when we go through the TRAK Software, and and I can look at and go, you know, I know, you really, really, really want to go right now and go do something else. But you're leaving so much on the table. If you can just grind it out another two years. And that's the stuff that we're really worried about, because we do see those really fantastic educators out there, ones that I've personally known for years, that I know that are top notch, and it's mostly the ones that are getting really close to retirement that are really starting to feel that burden. And so we're kind of just here as cheerleaders. They know the scenario of their retirement. But we're here to let them know, like, I know, two years seems like a long time. But if you can just stick it out, it's going to be so much well worth it. Because if you're going to leave, if you've got another job, you're not going to be able to make up that amount that you're leaving on the table. I've had two clients this year not even make it through the school year, and just decided that it was something that they could no longer do. And I did everything in my power to try to at least illustrate to them what the ramifications are. And then they can make that educated decision on their own. But it's really goes back to knowing where you're at, because we get that a lot to where they're 62. and they got 23 years of service, and they think they got to be there until they're 75. And then we go no, no, no, no. That's not how it works. And so there's a lot of misconceptions about the retirement system as well. And so I think it's always comes back to the educational pieces, those pieces that we give them through TRAK Software, and how to go through those processes, because it is a difficult time for them. I see it. Even the ones that always have the great attitude, I kind of see a little bit like "I can't wait for summer to come this year." And more. So I think that this this year has been probably even worse than the pandemic because behavior of the of the students are probably not--probably lost a little bit of our appropriate actions and classroom and stuff like that. So I see how that can take a toll on teachers over time and, but really trying to just show them, you have great benefits through your union and through the state. And you've been doing it for this long. You're so good at it. If you can just hold on, it's gonna it's gonna make life a lot better for you. And so we're really trying to be about easing fears and and pointing them in the right direction. Obviously, we can't make anybody do anything they don't want to do and nor would we. We could just show them the ramifications of what happens and what doesn't. I mean sometimes it does work out where they say they're done and go, you know what, you've been doing that 403b for the last 12 years, you can be done.
Ed Dressel 19:04
One of the things you mentioned earlier was that you find more information about them when you're running TRAK analysis for them. What's that additional information, you're finding out what actions can you take on it?
Eric Stevens 19:15
Right. So one, for example, is a salary increases. That's a big portion of where they're at. And we look at the totality of their financial circumstances. And we look at things like that. Okay, you're getting raises, but your expenses aren't going up. Yeah, we are seeing some inflation. Now how can we use that extra income to work for you, better than just letting it build up? And then we talk about things like, they'll show us what they have in their savings account. And we see all these information. And then if I see like, Okay, well, you went from having $30,000 in your savings, now you have $60,000, that's opportunity for investment. You might as well just keep it in a coffee can if you just leaving in this. So we're looking at all those different moving pieces--what it may be, to try to help maximize. Obviously, we don't want we don't want them eating, you know, hotdogs from Costco every day. So there's that balancing act of what is appropriate and what is inappropriate. And, that's an individual assessment that we make. So it's not a cookie cutter. And that's why the TRAK Software is so important. Not only with getting the initial report for the first time, and now finally understanding and knowing where you're at, but when you have already got and received one, or maybe a couple and you've been working with me to be able to update those. Because a lot of those things project out so that every year we get more known information, and more known information and stuff we don't have to guess on. And so the further we go, so a teacher who's three or four or five years out of retirement, that TRAK Software is going to get them bam, like almost on the dot. Where 20 years out, there's so many more factors that play in that we need to update it in order to be able to get the pertinent information to set them on the right course, because it's all about small correction. Once you once we get on that program of okay, we're going to be saving for retirement, we're going to be doing all these things, then it's just small corrections. And that's what the TRAK Software allows us to do by getting that additional information to make those small corrections as we go because we now we have more known information and less unknown information as we go along.
Ed Dressel 22:00
So with people getting close to retirement, what additional items do you bring to the table for them? Or what kind of engagement issues do you see as you talk to them?
Eric Stevens 22:12
In our firm, we got it set up pretty well for that. And I'm basically the accumulation phase guy, let's put it that way. I get them set up, I get them all broken through, we do an annual updates, do all that good stuff. They get out, let's say, seven, five years, three years. And then my colleague, who really is really good about at retirement. Because let's be honest. I mean, it is important to have an advisor during that accumulation phase. But the most important part is during retirement is the distribution of those funds, because there's so many tax ramifications and so many things that come up that that's when the value comes in more than anything. Because they need someone there who's going to be able to walk me through that steps because now you've accumulated all this money, it's not as easy as "Okay, I just got to pull it out." Next thing you know, you're on the hook for, you know, five, six, seven grand in taxes, because you took it from the wrong pile. So really, that's what we're doing. And so, matter of fact, this month, we're having a in person seminar at the EA headquarters. So this is kind of being spon on a little bit by the EA president, because he sees the value in this. So we're taking people that are about three to five years out of retirement. And we're going to walk them through the whole system. What it takes to file the paperwork, all the things that we need to do to distribute funds. Because this is another thing that people don't look at is, a lot of times they're in a position where they don't need to take that Social Security at 67. Maybe they can wait until 70 and get the 130%. And we really want to let those people know that we have resources available here for you, to show you when it's a good time to start taking your Social Security, when to start good time to start taking this. How do I fill that gap between when I retire and I can start clicking on Medicare? All those different things that go into retirement that you wouldn't think a financial adviser would necessarily do. But we do it because we look at the totality of the whole economic situation. We don't look at like you only have one account with me. I'm only worried about that one account. No, I'm worried about you as an individual. I'm worried about you as a person. And I'm worried about your economic status when you retire because you put in a lot of years of not easy work. You deserve to be able to get the full benefits of all your efforts that you put in.
Ed Dressel 24:48
I just heard that from a school employee that said the only thing my advisor looks at is the account that I have with him. They were pretty frustrated. I appreciate the holistic approach to take to helping people, handing them the report and saying, "Let me know if there's anything I can do for you." Eric, it's been a pleasure to sit with you. I appreciate you taking the time to interact with me and share with the audience about the passion you have for helping people. It's been great to hear about your success. I wish you the best. Thank you for your time.
Eric Stevens 25:19
Thanks, Ed. I appreciate being here. And thanks for giving me an opportunity to kind of share the things that I've learned over the last couple of years. It's definitely been a process but we're, you know, you gotta adapt.
Ed Dressel 25:32
Thank you much. Have a great day.
Eric Stevens 25:34