Matt Monroe | LPL Financial

Ed Dressel  00:09
It's exciting to do another podcast today. Today I have Matt Monroe from Syracuse, New York, an LPL advisor. Exciting to have you! Thank you for joining me, Matt. Nice to have you.

Matt Monroe  00:18
Well, thank you. It's a pleasure to be here with you.

Ed Dressel  00:20
Tell the audience a little bit about what you do. 

Matt Monroe  00:23
Well, we are a independent 401(k), or retirement plan advisory shop. Most of our business is working with plan sponsors in the small and micro market of 401(k). space. And we'd like to work a lot with our participants, and then also to help the small business owner manage the 401(k) plan.

Ed Dressel  00:43
What's your role in the company?

Matt Monroe  00:45
Well, I'm the managing partner of the company. There's a small group, just a couple of advisors. And what I do is I, I am the primary point person, for the organization to work with our sponsors and our participants.

Ed Dressel  00:59
Why do you pick the 401(k) world? What attracts you to that? 

Matt Monroe  01:03
That's a good question. You know, when I first got into the business, I'd gotten two degrees in engineering. And I left engineering and got into this business. Somehow I walked in as an institutional stockbroker. I worked with a group of other institutional stockbrokers and I naturally just evolved into working with them and their clients, and then develop my own territories. And I was responsible for working with institutional investors, portfolio managers, asset managers, in the Benelux region of Europe: Belgium, Netherlands, and Luxembourg. And as I was in the business, I was still pretty young. I wound up getting married and having children. And over time, of course, your friends wind up being the, you know, the parents, of your children's friends. And I'd noticed at that time that not many people really knew about, at least, my friends didn't know anything about their 401(k), and what to do and how to do it. It was an area that kind of interested me. And then my branch manager came to me and said, "Hey, look, your world is changing, your industry is changing, you might want to think about going over into the retail space. We don't have anybody doing 401(k) in the office. Why don't you think about it?" And after a little while thinking about it, I started to learn more about it. I started to taking the Chartered Retirement Planning Specialist designation, just to learn about it. I say, "You know what, this is a pretty neat space." And then as I developed into meeting with plan sponsors, I really started to realize what I wanted to do. And that was not focused on the C-suite, but really focused on the everyday normal employee. Because in our world, we're always going after the C-suites, making sure that we get the big money. And that's, of course, the easy way for us. But what I found to be the most rewarding was working with the people that really didn't know much, whether that's middle management, all the way on down to the the janitor of the organization, if you will. And just really helping people reach their retirement goal. I was able to work with the plan sponsor as well, or those in the C-suite as well. But it was never really my focus. I really enjoyed working with normal people. Let's call it. And I heard you from the very beginning of meeting your friends of your kids and making them your friends and realizing they don't know much about retirement. You've got a passion for the participant level in it. But that's not as common. I don't know if I've ever heard somebody start that way. Well, yeah, that's, I guess you're right, because what I've always been told is that you can take a 401(k) revenue, and then you can generate about seven times that revenue dealing with the participants and employees. That of course opens you up for prohibited transactions and things like that. I never really wanted to get into that space. And I never really wanted to deal with or create a retail book of business. And what I've really found the most rewarding part of the job was helping those that didn't know to get to where they need to be because the biggest question you always get asked is, "How much should I be putting away? What should I be doing? How am I on track for retiring?" those in the C-suite, they've got those resources at their fingertips. But people in our world, we really don't reach out to the middle managers and reach out to the staff employees, because they're not, well, they don't have the big account balances. But these are the people that really need the most help and I've always gotten a lot of fun or had a lot of fun with working with them, and a lot of reward working with them helping them reach their goals.

Ed Dressel  04:36
So the typical objection I get from people who talk about working with participants is there's not a really good income there. You need to have the high net worth people to really develop an income. You seem to have a different point of view?

Matt Monroe  04:49
Well, my focus is still working with the plan sponsor, and working with the HR on the administration side of the 401(k) plan. In my opinion that that business is very, very sticky. And, you know, you're working with pretty big dollars when you're working with 401(k) plans. And yes, you can probably make more percentage on a high net worth investor. But they're hard to come by. And I've always been taught, or I've always, I've learned over my years that small streams make big rivers. You may have 100 participants with $100,000 each. First of all, the reward for helping them reach their retirement goal is a lot greater. But also, they need to help where the C-suite doesn't need the help as much. And the way I look at it is we can get a lot of small balances in the 401(k) plan, where this is their primary revenue--or I'm sorry, primary savings,. They need the help. Let's face it, they need the help more than the C-suite does. And I'll say it over and over and over again. I hate to do that, but that's what it is. 

Ed Dressel  05:57
So let's talk about your participant education. Are you meeting one on one with them?

Matt Monroe  06:01
I do. I like doing that a lot. What I'll do is I'll schedule meetings with the plan, sponsor, meet with them, go over the plan, and then just walk around the facility or have a signup schedule of people that want to meet with me, and I'll just meet with them one on one. Of course, people may say, well, that's not a very profitable way of doing business. Well, it all depends upon how you consider it. I mean, I know how much I need to make on a daily basis. So I'll schedule my time with that in mind. So if a client has a smaller 401(k) plan, basically will pay me for, say, three days, I'll meet with them three times a year. I'll always make myself available to participants by email, by phone by zoom, however, they would like to talk, but I'll make sure that I'm on site for that day, afford the plan sponsor, as well as all of the participants. And again, it's a matter of building and developing relationships. And truth be told, I don't look for the retail business. I don't look for that individual business. But it seems to find me. This year alone--for somebody who doesn't even try to get the retail business that brought in three to $5 million worth of assets--

Ed Dressel  07:11
Just so people know, we're in the month of May. And--

Matt Monroe  07:14
Yes

 Ed Dressel  07:15
That's $3-5 million in 2024 already. 

Matt Monroe  07:18
Yes. Yes. And I honestly, honestly, I don't even try. I really don't try. When people asked me what should I do with my rollover I talked to them about working with a financial advisor, I talked to him about opening an account with Vanguard or TD Ameritrade. But ultimately, what happens is, is that they always say, well, what about you? Can I work with you? I've been I've been working with you for years, can you help me out? And most of the time, I'll say, sure, I'll help you out. This is what it's going to cost. This is what we're going to do, and etc. And they're happy with that. And they do want to work with me on the long term as well, even when they're no longer either a) retired or they're no longer with the company to which they were originally employed, or where I originally met them.

Ed Dressel  08:02
When you do a participant education meeting? How long is it and what do you go over?

Matt Monroe  08:06
That's a good question. It all depends upon the organization. A lot of times I'll have group meetings. And so what we'll do is I'll talk about the topic of the day: Social Security, Medicare, the market, about Target Date Funds, about how to invest, about mutual funds, things like that. And those meetings are normally about a half hour to an hour long. And then what I'll do is I'll meet with individual people anywhere from--depending upon the sponsor, anywhere from 15 minutes to a half hour. And most of the meetings are very, very short. People just want to say, "How am I doing on my 401(k)? What does it look like? Should I do anything different?" And those are generally pretty quick conversations. But then I'll start drawing it out a little bit more. "Okay, let's start talking about retirement planning. Are you on track? Are you not on track?" And that's when I start talking to them about retirement planning. And most of them never even thought of the concept of planning for retirement--they were just hoping to get there someday. And what I do is I say, "Well, let me know what other 401(k)s you have. Let me know about what your spouse has. And let's take a look at what Social Security is going to provide. And let's do a retirement plan. That's when I'll use the TRAK Software and put together a retirement plan for them saying, okay, you can--based upon the way you're going you can retire here and you retire there and you got to save this much, you got to save that much. Things like that, it really ties things together for them, and helps them understand what they need to do in order to get to that retirement goal because that's really the basis of what we do. And honestly, it doesn't take that long. The data is easy to collect. I normally will collect it the days or weeks after the meeting, and then putting it into your software. And from there, you spit out the data and you email the report to them and you do a Zoom meeting with them. And like I mentioned, just this year alone we've raised a tremendous amount of assets just by that simple formula. And again, it's with me not even trying. Yes, I do the work, but I'm not soliciting their business because if I try to solicit their business--I mean, you have to walk a fine rope or fine line regarding prohibited transactions, because let's face it, I may be getting paid 25 bips on a plan and be getting paid 25 bips on that participants assets, but in the asset management, in the retirement planning side of it, we'll get paid one percent, or one and a quarter percent, depending upon the balance. And I have to make that perfectly clear and make sure that the participant knows about it. So you know, most of the time, it's not really worth it, for them to pay that much more when they really don't need it. But, again, most of the participant or most of the time, when I do these meetings with people, they roll their assets over to us and we help them out.

Ed Dressel  10:52
How long are you spending in the one on one participant meetings?

Matt Monroe  10:55
How long? Well, generally, like I mentioned, it's about anywhere from 15 minutes to a half hour at the facility. And then after that you're spending maybe a couple of hours, communicating with them by email, or by phone, gathering the data, putting the data into the spreadsheet, and then meeting with them again to discuss the results of the retirement plans.

Ed Dressel  11:17
What obstacles do you find in the 401(k) business?

Matt Monroe  11:21
The obstacles I find really deals with the lack of knowledge that plan sponsors have with the importance of the 401(k) plan to their employees, and how their employees utilize the 401(k). A lot of plan sponsors a lot of small business owners, they have money in the 401(k), of course, but they also have assets outside of the 401(k). And yes, they're depending upon the business to provide them with retirement assets. But they're not looking at what their participants need for most people. The 401(k) is their only source of retirement income. And I mean, that's a tremendous amount of pressure, tremendous amount of weight on that asset, if you will, because that asset has got to provide for them for the next or for the last 20-30 years. And so how can we as advisors, help the participants? That's the biggest obstacle because most of the time, the sponsors don't know that answer. And so when I prospect, I'm looking not just to win the business, but I also make sure that I've got a sponsor that wants me to work with their participants. I don't want to do four committee meetings a year. I want to do for committee meetings, plus four to six employee meetings a year with their group, depending on the assets. I want to meet with them with everybody. Because let's face it, if I don't get that support from the plan sponsor, I'm going to turn down the business. It's not, it's not a business that I want. 

Ed Dressel  13:02
So when you're prospecting, what differential do you bring to the table?

Matt Monroe  13:06
Well, I mean, when you prospect, you've got the primary, you know, fund fees, fiduciary, and that's great. Most of the industry can support that. But where I really dig into, where I really focus is, what is your current advisor doing for your participants? What do you want to provide to your participants, to your employees? And there's so many benefits to helping the employees meet their retirement goals, because let's face it, we're all lazy in so many different ways. Most employees don't want to leave their work. I mean, if other than if the boss, if the owner is really a piece of work, most people don't want to leave. But if they're offered just a little bit more, they'll really consider it. Why are they considering it? Because they don't know the future. They don't know what's going to happen in the future. They don't know if they're going to be able to achieve that financial security. But if I could show the participant that if they were to put away this, that by the time they're 60 or 65, that they'll have the ability and the option to retire at the lifestyle to which they become accustomed. That's huge. That truly is huge. And that's the key benefit that I provide or I highlight during my prospecting meetings.

Ed Dressel  14:25
And you find plan sponsors engaging that?

Matt Monroe  14:28
Most do. Especially in the small micro space. When you get into the larger plans is not as important. They just want to make sure there are no problems. And of course, I can help with that too. But most small and mid--let's call small micro plans--they really do want to help out their participants because they're part of the community. Small businesses are generally part of the community. And they want to make sure that they show that they are helping their employees meet their goals.

Ed Dressel  14:56
What are some of the key areas of success that you've had? 

Matt Monroe  14:59
Well, I like to tell you a little story about what I've had. And I, okay, this may sound like a sales pitch for you guys. But I ran through a Gap Analysis for participants of a nonprofit. And as I was going through their various facilities, they would actually bring their Gap Analysis to the meeting. And some of them will say, "Okay, well help me out. I guess I should do something. Why don't you help me out with it?" That's great. One woman actually brought her Gap Analysis report and she said, "Well, I guess I can never retire," because on the bottom, it says, "unable to calculate". I said, "Whoa, wait a second. Don't give up hope yet." And she was 64 years old, unable to calculate. So I said, "Let's talk about it. I mean, tell me, what do you have? What else do you have? What other assets?" (She said) "Well, I've got a small IRA here and Social Security's gonna pay me this. And I've got my 401(k) balance with my current company." And so I ran through the numbers with her. I met back up with her. The next time I went in, which was just a couple of weeks later, I showed her the new report. And in that new report, it showed that she could retire not at 65, but at 67, in the same lifestyle to which she's become accustomed. And I couldn't tell you how much joy that gave her. She nearly jumped across the desk to try to give me a kiss because that's how happy she was to know that she had retirement in her future, as opposed to working for the rest of her life. And that's the biggest reward I get out of it is--showing how normal people can retire. It's not a mystery. The numbers are out there. We as financial professionals, we know that it's out there, and it can be done, but the normal person doesn't. And again, by utilizing the Gap Analysis tools that you have, I'm able to give a lot of people that information and that knowledge to they can retire at a specific age. It's great when you're working with a 30 year old, the 35 year olds and say, okay, in 20 years you can retire, or in25 years you can retire. But the best joy is getting to those people in their 50s, who say, "I guess I'm never going to be able to retire. Boy, I wish I'd done this sooner." With all the regrets that's out there. And then showing them the past that they could retire. 

Ed Dressel  17:19
I've heard that story and in a podcast with Gerald Wernette. And he's he shared with me two weeks afterwards that the joy that that person had affected the whole office space. And the plan sponsor said, thank you. That's fun to see. And I don't remember her name, I'll call her Nancy. Nancy was just bubbly around it. And it's just--as an advisor, it's fun to make not only a difference for a person, but for the work environment. We can all use a morale improvement, a boost in any work environment, and it's fun to be a part of that--to help a plan sponsor. 

Matt Monroe  17:49
Right. I don't know how a lot of other people feel about this, but the plan sponsors that I speak to say one of the biggest challenges is retention, because everybody's trying to chase that next, that extra 50 cents an hour. And one of the things that you try to do or I try to do in my meetings, my education meetings, is show the people that they can retire at a later date, within reason--60s and 57 years old--they can retire in that timeframe. They don't have to keep chasing that next 50 cents an hour. They'll get, okay, a little raise here and a little raise there, but all totally it will all add up so that they will get to where they want to be. And let's face it, if you spent five years in a company or 10 years in a company, you're vested in the success of that business, you don't want to leave that business. And I can assure you that the business owners don't want to lose that employee as well. Because although they might be able to hire a 20 year old to do the same job, the amount of money that they'll lose along the way, in order, the time that they have to waste for that 20 year old or 25 year old to get up to the speed and the productivity that the 40 and 50 year old has achieved--the plan sponsors just gobble this stuff up because they know it's true. They know why their employees leave. And it's very frustrating when they can't do anything about it. And so one of the things I do in my committee meetings, if committee could be two people in the committee, the owner and the the vice, the first vice president, you know, something like that. When I get together with them, I asked them what are we doing to retain your employees? And sometimes they're at a loss and I talk about retirement planning. Their ears perk up, and they understand and they see the value. And honestly when I prospect I lead with that. So I lead with employee retention. 

Ed Dressel  19:45
Matt, I know you use the one page participant Gap Report that we create to do part of your participant education. What's the impact of that when you're working with individuals?

Matt Monroe  19:54
The impact is significant. And you'll have detractors say, well you never know how much they have because they have other 401(k)'s and things like that, but it's an information gathering source. It's something that you can do on an annual basis with all of the employees in the company. You can do it within a half an hour to an hour, or you can set an assistant to do this work for you, because it's that easy to do. And then either send the report to your plan sponsor to handout, or you can mail them out yourself. And some of my plan sponsors ask me to mail. So what do I do? I get their envelopes. I get my plan sponsors envelopes, because, will, they open up a letter from my company, not knowing who my company is a lot of time? They may know my name, and they may know who I am, but they don't recognize my company. But if they get a letter from their company, they're gonna open it up. And the best part about it is a lot of time the spouse opens it up. So guess what I've just done? I've created a conversation at the home. I've created a conversation between the two spouses about retirement planning and retirement savings. And that's how I get into my greatest conversations is because I mail those one pagers out. They're colorful, they pop, they are easy to read, and they create that conversation. Then often I get an email the next day saying, "Hey, can we talk about retirement planning? My wife and I were talking about it last night, and we need a little help." So if you want to really create a conversation, send out the one page Gap Analysis. You don't need to do the 20 page Gap Analysis for every employee. You'll do it for maybe one out of 10 employees, ultimately, but if you send out a one page Gap Analysis to all the employees, at least they have an idea. And you know what too? You may not realize this is part of our responsibility, part of the plan sponsor's responsibility is to educate the plan participants. And so no way along the way, will your plan sponsor ever get sued by someone saying you never did anything to help me get to retirement and I didn't know. Well, no, you did. I gave you this Gap Analysis this year, and the one year before that, and this one the year before that, and this one the year before that. How much more do you want us to tell you about your gap? Because the gap is clear on this and you could have made a decision, you could have made a choice. So the fiduciary protection that this one page report provides you as the advisor as well as your plan sponsor, or the trustee to the plan is immense. And that, to me is a phenomenal value add that you're going to provide that 95% of our colleagues--two plan Timmies--and even some of those people who claim to be retirement plan experts are not going to do for their participants and their plan sponsors.  I think there's a world of difference. And you alluded to it but didn't go into detail. When you educate 100% of participants, you send in a letter to every single participant in the plan, showing them a Gap Report verses relying on the 12% that will go to the portal. So everybody gets educated. What have you seen when everybody gets educated? What's some of the impact that you may not have expected from that?  Oh, my participation rate goes through the roof, because I'm sending it out to not only the participants, the ones who are are actively making deferrals each week, but I'm also sending them to those that put in zero. And a lot of times the ones that put in zero couldn't defer at that time, but now you've given them a reason to defer. So it jumps up the participation rate, and then the deferral rates go through the roof. I mean, I hate to be a a huge cheerleader, and to make this a commercial for TRAK Software, but I can honestly say without any doubt or without any hesitation, that the one page Gap Report has by far been the biggest, biggest driver for my business. Not only for getting business, but also being able to see the assets come into my business at a much faster rate than what they would have been previously.

Ed Dressel  23:59
Well, it's fun to be a part of that and to help you. I enjoy that part in our role--helping advisors like yourself. I appreciate you taking the time today, Matt. It's been fun to talk with you. And I hope we continue to help you be successful. And I tell my employees, we're in the poverty alleviation business. We happen to work through advisors like yourself.

Matt Monroe  24:19
Right. Well, it's been a pleasure getting to know your product and being able to utilize what you do, what you created to help so many people. And like I said, I work in the small and the micro space--a space that's often overlooked. But we're having a big impact in that area in our community, helping those sponsors. I work with about 70 different plan providers and continue to grow, continue to grow my business and continue to see how the assets in our plans continue to go up higher, and I believe they're growing at a higher rate than the industry average.

Ed Dressel  24:51
Really appreciate your time Matt. Thank you.