Steve Wylam, CFP®, AIF®, is one of the founding partners of Shepherd Financial. He has worked exclusively in the financial services profession throughout his career, serving both wealth management clients and corporate retirement plan trustees and participants. A majority of Shepherd Financials $2 billion in assets is from corporate retirement plans, serving around 32,000 participants.
With ten years of using TRAK to produce reports and engage participants, it has become a cornerstone of the services they provide. He shares some of their processes of working with participants, plan sponsors, and how it makes a difference in how they are received by potential prospects.
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Edward Dressel: 0:02
Welcome to another podcast to RetireReady Solutions. I've got on the phone with us Steve. Wylam, out of Indianapolis. Steve, it's a pleasure to have you today.
Steve Wylam: 0:11
Thanks for having me, Ed. I appreciate you reaching out to us.
Edward Dressel: 0:15
I'm looking forward to the next few minutes that we talk. You're in the 401(k) world, and that gives us a little bit of a heads up. But before we get started and jump into the details of that, why don't you tell us a little bit about your business?
Steve Wylam: 0:27
Our business is, as you mentioned primarily retirement plans and individual wealth management. It's about 75% corporate retirement plans, where we have 200 retirement planning clients, either 401(k)s or 403(b)s. We have over $2 billion in assets and right around 32,000 participants in all of our plans today.
Edward Dressel: 0:54
How's business going for you?
Steve Wylam: 0:57
Business has been great. We've probably added upwards of almost 100 clients over the last five years. One of the things that we do in our business is, you know, besides focusing on fees, funds and fiduciaries, we place a heavy emphasis on financial wellness. So that's where the retirement readiness analysis really comes into play for us,
Edward Dressel: 1:19
And we'll jump into that in a little bit. So before we get down that road, tell me a little about your role with the company.
Steve Wylam: 1:26
So, having done this for nearly 30 years now, going back to 1996 with my first retirement plan but being in the business before that, I used to focus 100% of my time on business development and client service. And as we've grown a firm of almost 25 employees today, actually about 75% of my time is spent on operations and the other 25% is on the client service market.
Edward Dressel: 1:56
Why did you choose to be a financial adviser?
Steve Wylam: 1:59
I actually have a degree from Purdue University in financial counseling and planning, and Purdue was actually one of the first universities in the country to offer financial planning. And so I've always enjoyed working with money and helping people, and that has led to creating this firm. As I said, with 30 some thousand participants, and we actually have probably around 750 individual clients also.
Edward Dressel: 2:29
What obstacles do you find in the financial planning world that you work in?
Steve Wylam: 2:34
One of the biggest obstacles we face is to be a constant innovator for client service--trying to find new and different solutions to help solve our client's problems. And then on top of that is then for our clients and prospects to see the value that we're adding when we're providing these types of services to them.
Edward Dressel: 2:57
So tell me a little bit about that innovation that you're using. What do you use to innovate, to bring to the table to say, "Hey, we're different than the other ones," rather than fighting for "Hey, who's got the lowest fee?" but we're differentiating ourselves in other ways.
Steve Wylam: 3:10
Well, being a student of the industry and specifically the 401(k) retirement plan marketplace, there's a lot of great quality firms across the country. And by going to industry meetings and meeting people and seeing what other successful advisers are doing, if it looks very promising and successful, we like to put our own take on that and put our own spin on adding these innovative services such as a fiduciary vault, fiduciary training or also in financial wellness with the retirement readiness calculations.
Edward Dressel: 3:50
So with a fiduciary vault and the participant readiness helping you differentiate yourself, how do your current customers or prospective customers respond to the differentials you bring to the table?
Steve Wylam: 4:03
Specifically regarding the retirement readiness calculation, we produce an annual retirement calculation for all participants. Then we hold group meetings and one on one meetings with the participants. And before we hold a meeting, we go out and get all of the plan data. And then, after the plan meeting, we gather that same data to understand if we're moving the needle--how many people are increasing their contributions, what percentage are they increasing them by and just continuing to monitor "Are these participants on track for successful retirement?" So, as I mentioned earlier about fees funds and fiduciary, that's what a lot of the blocking and tackling the basic you have to cover as a retirement plan adviser. But we feel where the rubber really meets the road is on financial wellness, and the retirement analysis is just one tool that we use that helps us be different from the other advisers out there that may not have focused as much on this as we do.
Edward Dressel: 5:14
Probably the biggest objection I get in my world when I'm trying to tell somebody, "Hey, we can provide retirement readiness proactively to the participants versus having the portal." They say, "Well, there's a portal there. We'll use that," versus using something like we provide. What advantages do you see that we bring to the table with our retirement readiness participant reports versus using a portal?
Steve Wylam: 5:37
Well, first off with having 200 different plan clients, our clients are on about 20 different platforms all the way from Fidelity, John Hancock and Principal to lots of others, paychecks or ADP. So every retirement calculation that is on a website is unique and different to that plan for that record keeper. So we would actually have to know 20 different ways of doing this calculation and producing that. By only producing the retirement ready analysis through retirement ready (TRAK), we only have to know one software. So our presentations are all very similar for every client, and it makes us more efficient to be able to deliver more reports rather than having to know 20 different software packages. The other part of that is when you have planned reviews, most participants, only about 15% of the participants out there, utilize their website regularly. And then only about half of those run through the calculations. So when 93% of the people do not know if they're on track for a successful retirement or not, we think that system is broke because they're having to input the information themselves and pull that information from the website. Whereas with using the RetireReady software (TRAK), we can actually push them whether they're on track for success, retirement. And if they're not, what changes can they make to improve their situation.
Edward Dressel: 7:21
So being proactive in the retirement readiness space is the way you differentiate yourself with plan sponsors.
Steve Wylam: 7:28
We continually push the information to them rather than being reactive, where they have to pull the information.
Edward Dressel: 7:37
Sure. Do you have any stories of how it's made a difference with one of your clients or a prospective client?
Steve Wylam: 7:45
I've been looking through some of the reports and we have been doing this as late--as early as 2010. That's some of the first stuff that I could find out where we were starting to produce these reports. And you know, a successful retirement, people can look at what the participation rate is, what the contribution rate is, but in real simplistic terms, it's how many more people are on track for a successful retirement. And so we can run reports having gone through this many years to show that when we first started working with a client, they had 40 some percent on track, and today we have 65%. So it's not 100% but we have increased it to where we're making a significant difference in a lot of participants lives.
Edward Dressel: 8:39
Any specific stories that you go, "That was fun."
Steve Wylam: 8:43
Well, as I think about, you know, being a little bit older than most advisers out there, and we're talking to people in their twenties and thirties and I'm in my fifties, the impact that I'm going to make on a 20 and 30 year old, I'm probably never gonna be able to see the fruits of our labor. But just knowing that we've made a difference in getting somebody to learn, "Hey, if I only put in 8% instead of I was doing 5%" what that means to them 40 years from now--? We get stories like that all the time in that, "Hey, I wish I would have known this earlier to make this change, but I didn't know the information." So by using this software we're actually able to help them be prepared for retirement.
Edward Dressel: 9:39
One of the biggest hurdles we hear from advisers like yourself is getting the data into our solution. What's your process? You've got a lot of back ends, it sounds like-- a lot of different plan sponsors.
Steve Wylam: 9:51
Well, one of the things is it's a very simple excel spreadsheet. There's only about 11 or 12 columns, gross wages and deductions, etc. I'm not even sure because I don't even look at that anymore. But we have one specific individual in this office that runs all of the reports, and so they're well versed in sending out the data to the HR department, getting the correct information. Then we run some sample reports just to make sure the data is accurate, and it's going to give us the output that we're looking for. And then we run all of the programs--run all the participants through the program. We're doing these for as many as six or 800 participants at a time. Before we run that 800 and print all those reports, we need to make sure that it's accurate. So we again, we're very efficient with our time and making sure that the data is correct.
Edward Dressel: 10:55
You've used this for a while now since it sounds like 2010. What difference has being proactive with the retirement readiness reports made in the participant meetings?
Steve Wylam: 11:07
I mean, it is part of our capabilities overview. It is one of the cornerstones of what we provide. I mentioned fees, funds and fiduciaries, and a lot of people can do that. The way that you can really differentiate how you are different than the other adviser down the street is by showing that we can help them have their participants on a path for successful retirement. This is the simplest one page report that really quickly and simply, visually can demonstrate to a participant if they are on this path for successful retirement.
Edward Dressel: 11:51
What's your responses been from participants?
Steve Wylam: 11:54
The participants have been great but also the plan sponsors are really appreciative because they know we care. We create a group presentation that goes over each section of the report, and there's only four. We talk about the assumptions. We talk about the graph. We talk about what it means to their paycheck. And so then, from that we have one on one meetings to sign up, to talk to a participant and help them determine whether they can make that change that is suggested on the report. But maybe there's some issues, such as budgeting or credit card debt that we have to address before they can make this change to start deferring more. So that's where our other financial wellness programs come in. And we help them find that money by maybe suggesting that they refinance their house or something like that, to find those dollars to then be able to start saving more for retirement.
Edward Dressel: 12:59
When you're prospecting with new plan sponsors, do you bring up the retirement readiness solutions that you bring to the table, and what difference does that make?
Steve Wylam: 13:07
As I said, it's part of our capabilities overview. It's a slide on our presentation deck, and it's something that's unique and different than what somebody else is projecting. Because if you're going to utilize the tool that is provided at the record keeper, if you're totally independent, you really don't know who that record keeper is until you get hired. And then you do your due diligence and find the best record keeper for that plan sponsor. So you can't show a tool. Whereas when we go in, we've already got the solution for retirement readiness calculations. We show it to them, and then we also have the slides that are able to demonstrate. We had a client in Illinois that we did these many meetings, and this was the result from that retirement readiness project. And so it really can show that we are making a difference, whereas other advisers are maybe just going through the motions and just hopefully getting the the client because of a relationship.
Edward Dressel: 14:14
Any comments in closing?
Steve Wylam: 14:16
The only thing I can say is having worked with this again for a decade, is there are a few things in our industry that can make a vast difference in how you are received by a potential prospect and how you're unique and different.This is one of the biggest tools that my partners and I implemented, again over 10 years ago, that has really made not only a change in how we do things, but a change in how we are received by potential prospects, by our existing clients. We have an excellent client retention rate. A lot has to do with doing this retirement calculation for our participants on an annual basis. It's just a cornerstone of our practice and, you know, makes us look a little bit different than other advisers out there.
Edward Dressel: 15:18
Well, Steve, I appreciate you taking the time today to go through the interview. I appreciate your answers. I'm excited to hear the comments back from people as they listen to this. And it's nice to hear what a difference retirement readiness is making for your business. And for me, we like to hear about participants doing better and middle America getting ready for retirement a lot better.
Steve Wylam: 15:36
I can't thank you enough, Ed, for allowing us to even utilize your software. In our estimation, it is one of the best single page retirement calculations out there, and I'm glad that I could spend some time with you today telling you. Thank you for helping us be better with our clients.
Edward Dressel: 15:56
Well, I wish you the best in 2020.