Adam San Juan is the Regional Sales Director at Ameritas for the greater Detroit area. With over 20 years of experience helping financial advisors and TPA’s to establish 401(k) retirement plans for their small business clients and prospects.
Kristen Abell is a Regional Client/Relationship Manager at Ameritas with over fifteen years of professional experience in the Financial Services industry, focusing on retirement planning and client relationship management.
In this podcast hear pro-tips on navigating obstacles for success, getting hired, and differentiating yourself in the 401(k) market.
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Edward Dressel: 0:08
Welcome, again, everybody to another podcast with RetiredReady Solutions. I'm excited today to have Kristin Abell and Adam San Juan, both with Ameritas. Pleasure to have both of you here today!
Kristin Abell: 0:20
Thanks for having us.
Edward Dressel: 0:21
Kristin, why don't you start off everybody--a little bit about your business with Ameritas.
Kristin Abell: 0:25
Sure, so Ameritas is in the retirement plan business. We're a record keeper. Currently, we have around $10.4 billion in plan assets that we manage. That covers roughly 6,000 401k, 403b, 457 plans, servicing around 100 and 82,000 participants. Ameritas is a company or a mutually owned organization. We've been in the retirement plan business for over 60 years, and our headquarters was out of Lincoln, Nebraska. I actually come from a team of 15. We're situated all over the country, and my home office is out of Louisville, Kentucky.
Edward Dressel: 1:03
And what do you do for Ameritas?
Kristin Abell: 1:05
So my role with Ameritas is a regional client/relationship manager, so I encompass all of the ongoing servicing of our 401k. I plans partner closely with our advisors, tpa's and plan sponsors. We deliver planner views, which may encompass investment reviews, fiduciary reviews, plan design reviews, and we also work with the advisor to deliver a customized participant enrollment and ongoing educational campaign.
Edward Dressel: 1:35
Adam. Tell us a little bit about your role with Ameritas, what you do,
Adam San Juan: 1:38
Sure, Ed. Thanks for having me. So my role at Ameritas is a wholesaler. I think they call us regional vice presidents or something along those lines. But my primary job is to make sure that I waive that Ameritas banner nice and high and help advisors either get hired or stay hired. Our target market is somewhere between the small and midsized market, and we focus in on not just advisors that have a bunch of plans, but advisors that have five or six plans looking to grow that to 10 to 15, and we're equipped to do that. So that's my job. I've been doing it for over 20 years, and I'd say that I have 20 years of experience, not one year of experience 20 times, and that has helped me exist properly in in my territory, which is the Chicago land area and all of Michigan.
Edward Dressel: 2:29
Define midsize for the audience.
Adam San Juan: 2:31
That's interesting, because when you take a look at what Morningstar calls midsize and how the rankings generally go, some would argue that a startup is called micro. And that small goes up to $10 million. Midsize could be somewhere between $10 million dollars and 50 million, and then from there it gets larger. We do have a handful of plants that are in that midsize range, but if you were to ask me, where do we hit the ball the hardest? I'd say somewhere between one and three million dollars is where we see the most of our activity.
Edward Dressel: 3:04
And Adam, what about wholesaling do you enjoy?
Adam San Juan: 3:07
Well, a lot of things. It's not an easy job, and at the same time it's a necessary position because sometimes people don't know what a wholesaler is or what they do. We have a good message. And if you focus in on what I mentioned earlier, which is how do you help an advisor to get hired and stay hired, if we have a decent product and the right resources that go in that direction, it's kind of exciting. I think as a wholesaler and probably as a coach, if anything, and some would say that what we do is have psychologists. We try to make sure that our advisors are rounded with the right tools to help them win. And if we could help them win, then we win. And good advisors don't forget that. I think the shape of wholesaling has changed a little bit. So where that when I was wholesaling back in the early to mid 2000s, you could work with everybody. But everybody does have good products now, and all the wholesalers are good. So it's now not just a matter of yes, I work with everybody, but it's who do you dig the wells the most with? And the best wholesalers have their fan base and nine times out of ten, a 10% increase in those guys is better than a 50% increase in the people that who don't even know you. So the exciting thing about wholesaling for me is helping advisors win. And if I can find different ways to do that and not smell like a wholesaler and smell more like a partner, then I'll be doing it right.
Edward Dressel: 4:31
I like that. Kristin, tell me about your role as a relationship manager--what you enjoy about that.
Kristin Abell: 4:36
So I would say my favorite thing about being on the service side of the business, is the opportunity for me to help support those small and midsized business owners who would typically not coin themselves a 401k expert in any sense of the word. It's nice to be able to go out and truly make a difference for them and their plan participants, give insights and support in areas that are the holes are left among our competitors in the industry. Not a lot of attention is typically paid to these small and midsize companies. And one other thing I was going to say is that, even though these companies are small, it seems that the Department of Labor and the IRS regulations seemed to require them to be 401k experts. So these are the people that need our type of support the most.
Edward Dressel: 5:21
So Kristin, what obstacles do you find in your business?
Kristin Abell: 5:24
Well, I would say that dealing with people who are not 401k experts, These are small companies that don't necessarily have a dedicated HR department. So getting them even to take the time to sit down and go through the 401k, help design a custom participant education plan, can be difficult. And then, from a participant standpoint, there's a lot of obstacles that I see in a daily basis. There's employees that are getting bad information from a coworker. That's one of the biggest problems. Maybe they're using Google to do all of their financial research, and they're going by really outdated information or information that doesn't apply to them, given our situation. We also have a lot of employees that are setting their 401k deferral rate when they first began employment, and they never go back to make any adjustments to that. They may work for the company 25-30 years, and they're still with the 3% deferral rate that they chose when they first came on board. By the time they realize that they've made this kind of error, that they haven't saved enough, it's too late and it's a devastating picture for them. It's really sad. So gaining that participant engagement, finding ways to really deliver the information so that the participant is engaged with it, it makes sense to them and that they have the confidence to go in and make the proper adjustments to their 401k account to save the proper amount is key.
Edward Dressel: 6:53
How are you getting them to change their deferrals more proactively?
Kristin Abell: 6:57
I would say the best way is to study the demographics of the employees that are at the company. There's typically a mixture of education level savviness when it comes to investing. So you need to be direct in your approach with those employees. Give them several different pathways to to gather that information. There are some companies where the participants respond very well to going through an online Wizard to set up their account, and there are others that really need more hands on support. But where we see the most success is where we're able to make the information personal. So if we can capture that participant's referral rate, their compensation, we can show them a projected retirement account savings balance that they're going to have a shortfall at age 68--that participant is more apt to make a change in that situation then just telling them to go out to our website, do the information, do the research themselves and figure out where they need to be.
Edward Dressel: 8:02
So, Adam, you look at the business a little bit different than Kristin.What perspectives do you have on the obstacles you find?
Adam San Juan: 8:09
Well, I think the obstacles that my advisors face is just finding a way to get hired. I think it is a very competitive situation out there. You can't take any relationship for granted or say that, "Yeah, I went to high school with this guy. He's only going to do business with me." Everybody's got good stuff. And at the end of the day, competency has to show itself. So the way I look at it and why I like RetireReady is it is because it helps revisit something that is going right back to the basics, which is how do you even know if your employees, Mr Business Owner, are using the plan right? The 401k is a wonderful tool if it's used properly. If it's not used properly or not used at all, then why do you have it and results may vary. So the obstacles that I see advisors going through, is this whole idea of how do you not smell like another advisor? How do you differentiate yourself and you can't just talk about the fees? You can't just talk about any particular feature--it has to come down to what makes you different. And sometimes what makes you different is just going back to old school. The litmus test of any 401k plan is going to be whether or not people are using it properly. And that means two things. Are you deferring the right--firstly, are you participating at all? And then secondly, are you deferring the right amount? I've been in situations, I know Kristin has been in situations too where we ask, "How many people are participating the plan?" And they raise their hands and then we sit down with them and ask them "How much are you putting away?" They put away 1% of their check. Are you really participating if 1% is what you're deferring? Or better yet, do you even have an idea about what that means to you at retirement? Or do you have an idea about what kind of gap that's creating? And if we can find a way to solve that, the better. And I think that the obstacles that advisor's face today is just that how do I help them get hired? How do I help them stay hired? And I think that just by visiting a basic of employee engagement--and Kristin said it best--customized engagement, not clinical engagement. And not only that, but engagement that is actually brought to them, as opposed to, "Just got to the website. It's all on the website." We've seen how many people actually use the website, and when they do use it--first off, the usage is amazingly low--and when they do use, it is either in a query mode to find out how much my account balance is. And then it might be transactional in terms of changing where their money is allocated. It's not often that we see--I think there was a T. Rowe Price study that showed that people change how much they're deferring their 401k plans four times in their lifetime. That's a mistake. So I think if you can visit participant education and participant purposeful, useful use of the 401k, I think that would be the differential. That's what's going to help advisors get hired. We see people who focus on fees way too much, and we can bring the lowest priced product to the market, but it doesn't mean people are gonna use it properly. So that's how I see--those of the obstacles that I typically see--advisor differentiation they just don't visit the basics like they should.
Kristin Abell: 11:37
I would like to elaborate on that--on advisor differentiation--because I think that that's going to be something that we see more prominent as a competitive advantage that these advisors are going to need in the future. I think this tool can really be a game changer for the advisors as the next generation of savers emerges.
Edward Dressel: 11:55
Kristin I just want to be sure when you say this tool, what tool you're referring to, and then go ahead and talk about the advisor differentiating there.
Kristin Abell: 12:02
So RetireReady has been a game changer for advisors as the next generation of savers emerges, so they're going to be required to exhibit their value proposition in new ways. A lot of studies are showing that millennials are saving, but they have been hesitant to use financial advisors. This generation is very technologically savvy. They're researching their own investments. And when I say researching, I mean they're going out and doing a quick internet search of those investments. They digest the information quickly and think, "Ive got a handle on this. I don't need any more help." That can really be short sighted. And they can be a little bit overly optimistic about how quickly and easily that they're going to be able to to achieve those retirement goals. So this is where this tool can really come in handy. I think it can serve as their wake up call and combine this type of retirement gap analysis with realistic examples of large expenses that they're going to incur throughout their lifetimes--things like purchasing a home, paying their children's college tuition and showing them the direct effect that that's going to have on their savings and the future portfolio value is going to be key.
Edward Dressel: 13:10
And I want to go back to a point that you made about advisor differentiating and being proactive in bringing the Gap Reports to the participant rather than being passive. I call it passive saying, "Go out to the website and figure it out." How have you seen that when you're working with plan sponsors, showing them what you can do that you can bring that to the participant? What difference does that make when you talk to plan sponsors?
Adam San Juan: 13:34
Well before we even get to that, I guess it's important to find that what is important to the plan sponsors and when you're working with a dentist or a doctor or a lawyer-- nothing against them, but they have, they're very different in there and how paternal they are to their employees, as opposed to a manufacturing firm in ah manufacturing group in Macomb, Michigan. So it all starts with a plan sponsor. If it's important to them that their employees are taken care of, we see this Gap Analysis being huge, and we have to sort that out and feel for whether that that is an issue. But if I'm sitting in front of a business owner and I feel that that is that important to them, that's when the question comes out. "Hey, how do you know if your employees are using your 401k right? It's a great benefit. You're manufacturing shop in Warren, Michigan. You got a bunch of tools in your back office. Have you ever seen any of your employees use a tool wrong? And if they do, what could happen? Well, results may vary. You might lose a hand. In the 401k, it's not too different. How do you know if they're using the tool right? Meaning that, how do you know if they're deferring the right amount away for the way they want to live when they retire? And then even ask something a little bit more pointed like, "How does your current financial advisor answer that question? What tools does he use to address that?" And in a very doctor type of way, we can ask, "How long has it been that your plan has been this way?" We'll see, we'll run into plans that have--we'll have one of the plans that have low participation rates and review their past 55 hundreds and find out that they chronically have low participation rates. And if it in fact is rare for their industry, we'd like to ask them "How long has your leg been hurt? And have you thought about fixing this? Or have you thought about different ways of fixing this? And then we show them the report and they look at it like it's the next best thing since sliced bread. But it's a basic. And sometimes I think we've gotten away from the basics. We've whipped around the word fiduciary, which is a very legitimate word. We've ripped around--we've ripped around words like high fees and investment due diligence. But like I said earlier, it doesn't matter if--none of that matters if nobody uses the plan right, and that's where I think the Gap Analysis helps the advisor get hired.
Edward Dressel: 16:00
So, Adam, what difference has the Gap Analysis made bringing that report to the plan sponsors? What difference has it made in your business?
Adam San Juan: 16:09
Well, in 2019 I was very blessed to finish on top of the leaderboard at Ameritas. Kristin has been a big part of that. As Kristin mentioned only, one of the many plans that I sold last year actually took advantage of using the report specific to all of their employees. But I will tell you every single plan that I've won, every single finals presentation that I've been to, this always comes up and they always love seeing that. Now, will they actually pull the trigger and get this for their plan? We could certainly have a conversation about that. I think it could be done a little bit easier. But if you're asking me how important the RetireReady report is to my presentation, it's in every single presentation. And what's interesting--I'll bring up a $5 million presentation that we were at recently in Midland, Michigan. It was a differentiator where principal and some of our other competitors were talking about fees--that's fine. We show them this! And they said, "No one is coming at it from this approach." And I said, "The health of your 401k is predicated by how many people actually use that, and this is why we talk about it. This is why we bring this up." And so I would tell you that regardless of how many plan sponsors pull the trigger and say "Yes, let's go ahead and install this," we get chosen as a result of having this available, So that's how I use it in my practice. Today, I still do the exact same thing. I'm on various plans at various different sizes. 12 months, our planet, eight months. Our plan a 15 month our Plan $200,000 plan. This is meaningful to them. It should also be noted, too, that the advisers that Kristin and I do business with they aren't ones. In Tuesday, As a matter of fact, ah, the advisors that we work with are under third or fourth or fifth plan and some 7th 8th and ninth plans with us. They've seen this. They expected to be a part of the conversation, and we let them know that it's available. So it isn't just the singular finalist presentation that this is displayed. It's just what our top advisers expect us to talk about.
Kristin Abell: 18:29
I would totally agree with everything that Adam said when it comes to the ongoing meetings that we have with advisors and plan sponsors, even if they decide not to pull the trigger by getting us the data that we need to run these retirement Gap Analysis report, they love satisfying their maternal and paternal instincts, to help their employees reach financial security. They really see the value in that. And I would say that both participants enrollment and deferral rates of our existing participants that we have used the toll, this they have increased drastically. It's more than doubled. And the scenario where we have actually been able to bring these reports differ relation.
Adam San Juan: 19:09
So I had one of the things that I position when I talked to advisors. When I'm trying to get them higher, are trying to help them stay hired, I tell them. Look, I also don't care if you use this report, but if you don't have a way to address this, you should really use this report. So let's role play. I'm a participant. I'm putting away $5 a month in my 401k. What does that picture look like for me when I retire? Because I'm 45. Is that enough? And when I posed that question to financial visors and asking, how do they address that? Not many of them. Kris, and help me out here, but I don't see many of them have on adequate response to that.
Kristin Abell: 19:49
They do not, and that is a tough situation. Whenever they are asked that very pointed question and the trustee meeting. You have a board of trustees all kind of staring at the advisor. Well, he's trying to scramble to explain the values that he brings to the plan because they're looking at the amount of money that he was just paid over the last year. And they have to quantify that and support it from a fiduciary standpoint as to why these plan participants are paying for their service is
Edward Dressel: 20:15
I like to explain it in the world of concrete and abstract of the abstract world would say you're gonna fall short and it's gonna be really short, and I don't know how much, but the concrete world says your money's gonna last you six months, you're gonna be out $5 a month, just doesn't cut it. And there's a world of difference explaining that to the participant based on Hey, I've got a report that specifically about your situation, not academic. Those were good stories. I appreciate that.
Kristin Abell: 20:42
Okay, I cannot address some obstacles that I kind of overlooked.
Edward Dressel: 20:46
Absolutely go ahead.
Kristin Abell: 20:47
So I just wanted to mention that I do my best and my educational meetings to explain a drastic impact that just miscalculating by one or 2% points within your deferral right can have on their overall projected retirement account balance. And a lot of times I'll compare that to the turbulence and wind and how that can cause airplanes to go off course constantly throughout a flight and with the help of air traffic control on the planes internal guidance system, the pilot's able to make informed and continuous corrections so that the plane never really goes too far off course. Now, when these situations are addressed immediately than those course, corrections aren't difficult to manage. But when you see that those corrections don't happen regularly than catastrophe can result. There have been a few instances where planes of crashing into mountains because of low visibility and just overall miscalculations by the pilot. And it's really sad to see when you're sitting down with an employee who has encountered the situation where they've made a miscalculation of, you know, 34% that they should have been saving over their lifetime, and now they're ready to retire, and they're facing the hard truth that the money just doesn't there. And it's honestly too late to correct such an egregious error at this point, So without an adviser and tools to help guide them, it's really unlikely that airs like that can be completely avoided. So using, retire, ready, having an adviser that really cares and is engaged with participant education is enormously beneficial.
Edward Dressel: 22:23
Adam, what does a successful participant meeting look like?
Adam San Juan: 22:27
When I stand in front of a group of employees? And this was actually one of my first jobs in the industry. I thought that a good meeting is when you had light bulbs go off throughout the meeting and many of the times we're gonna be in front of employees and this is there. 6 10 however many enrollment meeting, how do you make it fresh for them? And so, ah, good employee meeting looks like one where the light bulbs are just starting to pop up and I'm standing in front of a group of employees. I kind of visualize lipo, and it could show itself in different ways. A couple of nods, eye contact. And now that happens when you're reading out of enrollment kit. It never does. But when you make it personal, it does. And so, yes, everybody will get a traditional enrollment kit. It'll go over the plan highlights, and that's all fine and dandy. But in your enrollment kit will be an envelope with your name on it. You open up that envelope, there will be a report specific to you showing you what will happen if you keep doing what you're doing. If you keep using for one K plan as you are currently using it. And this report is designed to help you understand, if you're using it right, and if it makes sense, leads you to a conversation with your financial advisor In what I just said, how many words you did I use their 456 Now it's personal, and I think that that's what makes a really good enrollment movie. When I talked to business owners and we had one recently where we took it over from another financial advisor and the trust, he basically said, Yeah, he comes in. Nobody really listens to him. Which means he's probably saying the same thing. And she confirmed, Yeah, he basically said it. Does anybody have any questions? And he sits in a room, waits for people to visit him. Nobody visits him. He leaves and checked it off his listen, there you go. That's not meaningful to anybody. So I think that a report like this brings a level of freshness to the advisor might spark them to do things a little bit differently. But if it sparks a participant to say, Huh? I've been using it wrong this entire time. Kristin knows I'm a big fan of analogies. And for some reason, I've been drawn to this YouTube channel of magic tricks revealed. I don't know why, but with interesting about that is when you reveal that somebody Oh, my gosh. You mean I've been using the 41? Oh, this is how you use it for one day? Yes. Now they're involved. Here's what ends up happening. They get kind of good being a participant in the floor, one k in today's market that once you get it, aren't freaking out there looking at, huh? I wonder how much more money I could put it. The plan or I know Kristin talks about this in our meetings, but the power of dollar cost averaging. No need to freak out. This is later. Later money. I'm just buying more shares. So how do I see? And Roman meetings go really, really well when light bulbs go off. But light bulbs on Lee go off if there's customization, not clinical ization. And that's what this report does.
Kristin Abell: 25:43
I totally agree. I would say employee engagement is your key indicator. And when we walk around the room and we can pass out personalized custom reports, you can physically see those employees perk up and they're paying more attention. They're asking more questions after the meeting. They're asking for individual of meetings with this adviser because they trust that advisor tohave the right information and look at their complete financial picture and give them guidance. Overall,
Adam San Juan: 26:12
What I wanted to say is that there has to be a match between the financial advisor and the company. If there wasn't a match, then the financial advisor is going to get hired, which then asked this question. What financial advisor is this tool? Good for? You got to be into it. You have to genuinely care on whether not employees are using the plan properly. And if you don't, then this becomes another marketing piece that we can show you. And do you like it? Okay. No, I don't. What about this one. You'll like this one. No, I don't like blue. How about this one? This is blue. What kind of sales? Persons that you're a glorified shoe clerk, if that's what you're bringing to the table. But if you can customize it now you're a partner, and now you become irreplaceable as a financial advisor. So that leads to everything that Kris and I were talking about. If you are customizing the experience and personalizing it, there's a pretty strong likelihood that you either we'll get hired or you'll stay hard.
Edward Dressel: 27:14
Kristin, what's been your response from plan sponsors? After using this report, you had one of them that you used it with. What was the interaction of the plan sponsor level?
Kristin Abell: 27:23
Don't say that. It seemed like they had a sense of relief, because when you are in a role of a business owner, especially one of the smaller businesses, they're like a family, and they really have that maternal and paternal instinct to protect their employees and do right by them. So they feel the sense of responsibility toe, educate them, provide them all the tools and guidance that they can that put them in a place of financial security. So when we deliver those reports, we went back and brand a report about two weeks later to capture the results of Did we have increases in deferral rate? How many new enrollments did we have? And the results were very positive. Better than we expected. They were just a static. And we're just so thankful and grateful that we were able to provide that service.
Adam San Juan: 28:11
And I'm gonna take a different approach of that because there was another plan that we installed this up in Saginaw. It was a mattress company, and they weren't relieved. I think in Kristin's experience they were relieved because you had a good adviser that was very involved. That made sure people were using the plan, right. And the report affirmed that, but not in any anecdote away, as you mentioned in a very concrete way. The plan in Saginaw, Not so much. They got the report and some of them were surprised. And nobody likes surprises, especially when it comes to 401 k plans. It shouldn't be a surprise that putting away $5 a month is going to yield you an amazing gap. And so the result of the one we did in Saginaw there wasn't released. There were some people whose hearts were broken and realised that while we were this far behind eight ball now the advisor handled it with grace. But sometimes it's not that pretty, and that's okay because it's important. You don't want a surprise policy when you get to retirement that wow, Kristin never told me $5 a month wasn't going to get me there. No, regularly, we show that to you. And at the end of the day, this is the map that I think Kristin and I follow. What gets measured, gets improved. What gets improved, gets results. And by showing them this, we will get results. Why? Because we're measuring measurement was improvement. Improvement gets results.
Edward Dressel: 29:36
Kristin Abell: 29:36
think that was a great answer. But I think that my answer may have been must understood, because what I meant was that once we provided the report, we were able to make a difference in the amount that participants were going out and differing into their plans. So it caused a response from participants and they we had new enrollments. We had people increasing wonderful rates. So once we were in an additional report to show. Here's all the positive changes that occurred is a direct result of our latest educational program. That's when they felt the sense of relief that Oh wow, I'm doing the right thing. What we're doing is really impactful and making a difference in these people's love
Edward Dressel: 30:18
what I've seen from other advisors and I get both perspectives, I think they're both riel. But I've seen from other advisers here two year, three year, four you've got you know, you're starting from way behind for some of these people. And then as you build up in future years, the appreciation only deepens in the relationship and you're making a difference long term, not just a one off, and I'm done with it. No, this is something that could be used in an annual basis for engaging them, increasing deferrals and moving them towards retirement success.
Adam San Juan: 30:49
And I wanted to add that one of the beautiful things about the report is that it just doesn't say increase what you're putting away by X and you'll be on the right track. Obviously, we could even show them well, if you can't make that hop from 3% to 7%. What is it in? What is the 1% increase mean to your check? That's that's a meaningful number, but showing them other ways to solve this. It talks about what happens if you wait a year. What happens if you put in one lump sum right now? Or why don't you wait to retirement and then put in one lump sum? Those numbers get pretty crazy, but at least it puts it in perspective, and all real roads ultimately lead to change what you're putting away now. It'll be much easier than coming up with $80,000 today, or $610,000 when you retire.
Edward Dressel: 31:43
Well, Adam and Kristin, it has been great to have you today. I appreciate you sharing both your perspectives. How it's working for you. The Participant Gap report on your work in the 401k industry. I really appreciate you both taking the time today to do this podcast. They wish you the best in a pretty crazy market in 2020. Thanks so much, and it's been a pleasure. Thank you