Edward Dressel:   0:05
Welcome everybody to another podcast. Today I'm excited to have Jane Hagen from Michigan. Jane, welcome. Good to have you.

Jane Hagen:   0:13
Thanks, Ed. I appreciate it.

Edward Dressel:   0:14
She's a 401k advisor working in a bank. Tell me a little bit about your business and your role.

Jane Hagen:   0:20
Sure. Tri-Star, is a trusted investment bank. We're located in Mitch, Michigan. This November we're gonna celebrate our 20th anniversary, so we're excited for 2020 to celebrate 20--kind of fun. We strictly work with individuals, corporations and foundations and specializing in trust and investment work. We do not have the deposit side of the bank, so we don't offer any loans or deposit accounts. We started the bank 20 years ago with five individuals, and now we have over 43 staff members. We currently managed about 1.6 billion in assets and about a third of those are in retirement plans. And that's the area that I'm responsible for. And I've been here since the beginning of the bank. So in August of this year, it'll be 20 years that I left my prior institution. I have been doing retirement plans for about 25 years now. You know, I really think the retirement plan business was a perfect calling for me because I'm just so driven to assist one person and one participant at a time to help motivate them and change them--their behaviour, I should say--not change them, change their behavior--so that they increase what they're saving for retirement. My motto every day is "One step at a time, one year at a time, and one percent each time."

Edward Dressel:   1:36
Oh, I like that. So those 43 employees, how many work in the 401k side?

Jane Hagen:   1:42
Well, I currently just added to staff. Before it was really just four of us. I've just added an additional person because we're trying to make our footprint into the map environment. So I now have five.

Edward Dressel:   1:56
But when you think about engaging plan sponsors and participant towards retirement readiness, how do you do that?

Jane Hagen:   2:03
Well, we really worked closely with our plan sponsors. We want to make sure we schedule in person employee education meeting. We feel there are many, many online tools that participants can go out and determine if they're on track to retire. Maybe they have the right asset allocation and so on. But what we find most is that employees really relate to people in person for an expert for advice, counseling or education of any kind. So with our plan sponsors, we want to have at least one annual education meeting, if not two. And each year we bring different topics to the agenda. We want to focus on overall, financial well being and helping them find their purpose in retirement. Then I'll expand on that a little bit because, you know, we have so many baby boomers that have really positioned themselves--that their job, their positions-- that's what they identify themselves with. So when they don't have that job anymore and where they used to go every day, the office, they would go to the people they would associate with, what is he going to do? What's retirement gonna look like? Because that is a big part. They will go from, you know, working 7-8 hours a day to having 7-8 hours additional a day to doing what? So what is the next chapter of life gonna look like We expand on that a lot lately because sometimes I feel like I'm a counselor with retirees because they don't know what to do next. So we bring a lot of thought provoking questions to the table to help them really envision what retirement's gonna look like in the future for them.

Edward Dressel:   3:36
So you talk about a lot of tools online, and participants have access to a lot of them. They go the portal. What advantages are there to using the participant Gap Report you have for your business over using the portal?

Jane Hagen:   3:51
Well, the Gap Report really has had an incredible impact on our business. There is no doubt. The numbers year after year continue to increase, so we truly believe in it. You know, being in mid-Michigan, we work with a lot of manufacturing companies. So many of our participants never go online or never are going to plan for retirement themselves. Most of our participants use our model investment portfolios, so they know that we're taking care of that for them. And we have. We feel there's a large portion of the United States that doesn't plan for retirement on their own. So that's why we feel so strongly about preparing those individual Gap Analysis and using the software in giving those to each participant via paper. I know it's a lot of paper that we produce, but for most participants, that's the only piece of paper that they'll see that's really customized, that they don't have to do on their own. And it really has seen huge increases for us. When we prepare those Gap Analysis and present those to employees at a staff meeting, we usually see about a 60-70% of the participants that attend the meeting increased their contribution. And then we kind of take it one step further because we're real paternal with them. We want to make sure that they get to retirement. So we created a simple form that all the participants got to do is check the box of what percent they want to increase. Sign and date it. Very simple: name, check a box, sign and date it. But we've taken it one step further. We highlighted the line that says an annual increase of 2%. It's kind of amazing, with the power of suggestion of just that highlighting that lying 2%.  So many of them will look at us and say, "OK, I'll just do the two. Let's go with that." And so it's just that power of suggestion because I think if we didn't highlight that two, they would probably pick the first and just do 1%. So our goal each years to get as many of them to go up at least a percent, especially if the plan sponsor doesn't have auto increase. Even if they do have auto increase, we have some great success stories of still maybe not 60% of them going up a percent or two, but a good, you know, 25-30% going up when we do the Gap Analysis. And you know, we feel strongly about the paper, and I know the world is going away from paper. But what it really does is it encourages them. And we encourage them to take it home and share it with their spouse because planning for retirement really should be a household thing, not an individual thing. And I always say the same thing year after year in saying we want you to look at this in your thirties, forties and fifties. Please do not wait in your sixties and call us and say, "Hey, I have $10,000 and I want to retire next year." Because it's too late for us to change the scenario at that point. So we feel like doing the extra by supplying them the paper of the individualization. Our plan sponsors very, very much value that.

Edward Dressel:   6:43
What kind of response do you get from participants when you provide them the report and the education that that one page Gap Report gives them?

Jane Hagen:   6:52
I think it really starts to make them react and plan because it's individualized. It's not, you know, because at our employ meetings to we bring up a lot of other topics, and we have packets that we go through that may be talking about Roth versus regular or 529 plans or how long we're gonna live and planning for that. But when it gets to the part of where see their name on the paper, their salary, where they're at, what more they need to save, it really gets them to start to react. And you know, we've taken it one step further than that too, because we've created a one page document that the participant can give us additional information. The digital information is really--is their spouse bringing? Are they saving? Are they putting money into a 401k? Maybe, you know, they have a pension. Maybe they work somewhere and they could have, be a lucky person and have a pension someday. So we want that information. And so it's again, it's very simple for them to complete the one page with additional information. They fax it into us or email it to us. What we do then is we redo the Gap Analysis form with the additional information and then send it to them home completed. Again, sending it to them at home, maybe gets the spouse involved. And we want them involved. And they take a look at it and that creates the behavior to change, too-- to think, "Okay, I need to start increasing what I'm doing now versus later in life." So really, we get great, great response from employees because again it has their name on it and everybody you know--most people like to talk about themselves. So it goes the same way when it talks about the Gap Analysis. It's their information

Edward Dressel:   8:40
Are you finding outside assets getting rolled in the plan because of the engagement solutions you're bringing to the table?

Jane Hagen:   8:47
Oh, I would say yes. To make it simple again for participants because there's a lot of participants at employee meetings that will come up and say, "I have this money from my old company. I've never rolled it over. It's still sitting there." And so they still forget after the meeting to do something about it. So we created another one page that says, "Hey, this is what you need to do if it's at the other company or if it's in an IRA, wherever it may be. But here. Here's an email address. You have a phone number. Give us a call, we'll help you do it. And again, by creating that extra document, they take it with them. That's the reminder to pull out their old 401k information and give us a call. So I would say yes. Again you still got the procrastination of people out there that sometimes they just forget to do it or are procrastinating to do it. But I'd say absolutely. Absolutely. We talked to them about trying to bring things together, making a plan. Yes, personal assets for the trust side of the bank also. Absolutely.

Edward Dressel:   9:45
One of the biggest hurdles I hear from advisors about our solution is that getting the data's difficult. What is your process and what is your interaction with the plan sponsor for getting the data into the system?

Jane Hagen:   9:56
Well, first of all, our EB staff loved the new Batch Processing, and maybe it's been out there for awhile, but we've just started to use it within the last six months. And it's really, really streamlined the work that we've been doing. So our team works with our record keepers on a retirement plans together part of the information, such as the balances they have in the plan or current addresses. And then they reach out to our plan sponsors and look for, together, the current deferral percentages that each participant is doing, because we want it to be the most accurate when we produce these. And our plan, sponsors are really cooperative about it. They are aware of what we're doing. They've seen them in the past. They've seen how effective they've been, so they're more than willing to give us the data. And so, as we get the data from the plan sponsor and the record keeper, we import that into the system to generate the reports. It really creates a very smooth process. We have our happy machines stapling them with their addresses on them and, you know, very confidential information. So we always state that right off the bat when we're doing the meetings in person, that "If you don't want to know how old your neighbor is, don't share your information," to make a joke so that they know it's all confidential. And we always say at the end of the meeting, "Now go put this in your stuff to take home." So it's very easy--the importing. And again we have one person that's primarily responsible for doing all the Gaps. They got it down pat. Again, it's gotten easier over time and a really smooth process. We don't have any problem whatsoever.

Edward Dressel:   11:29
Do you ever have a plan sponsor saying that they're not gonna provide that data?

Jane Hagen:   11:34
I would say maybe once a year we'll get the person in payroll that says, "Oh, I don't have time to do that. " And so we kind of just go over to our main contact and say, "Hey, this is what we're looking for. You can just download the percentages," and sure enough, we get it. But it's pretty rare if we ever get a plan sponsor that is not cooperative,

Edward Dressel:   11:56
What does a successful participant meeting look like?

Jane Hagen:   12:00
Well, first of all, I think, and I feel successful employ meeting starts with the plan sponsor. We really encourage our plan sponsors to make the meetings mandatory. Well, that certainly doesn't happen if we don't encourage it, but we may not get mandatory attendance, but we'll get the majority of the staff to attend, and it's again, it's about getting the staff in the room. I mean, once we get them in the room, we can get them engaged, because again, we bring different topics every time. And we want meetings from year to year to be different. We bring different topics. We think different ways of presenting from. We may use video. We may use a quiz that we do all together. We may use a paper outline. It's all different formats because we feel everybody learns in different ways, and the biggest part is it really starts with the plan sponsor, and we want to make sure they're engaged in the meeting. So if they're tentative and they're asking questions, we know that they're learning something new every single year. Another thing that we do every year--and I've done it for 25 years now--is we bring candy to meetings. Each year we have a different candy bar. We wrap it with a different theme. Many plans we've serviced for many years now. A lot of the employees are so excited they come to the meeting because they know they're going to get candy for one, and they want to know what candy bar it is. And now it's gotten to the point of I have employees at companys suggesting, what our theme should be the next year. So it's kind of fun, But it's amazing what food will bring to meetings to get attendance. But at the end of the day, it really starts with the plan sponsor. Are they supporting the plan? Are they encouraging their employees to learn more and do they support the efforts in helping them get to retirement? And I would say 99.9% of all our plan sponsors are very supportive in getting the employees to meetings and allowing them to have the time to come to meetings and having a place that we can hold the meetings. So I just really like to see a successful employee meeting with having those employees engaged in. And again, using the Gap Analysis. When you have something that's got their name on it, they're engaged because it's talking about them talking, about their future, and what it might look like.

Edward Dressel:   14:14
Are you using that participant Gap Report every year then?

Jane Hagen:   14:17
We have been doing it every other year. But we--as my staff, has expanded--and so we are actually looking at possibly doing it every other year in person and then every other year directly, just sending them to their homes. But we're going to talk with each of the plan sponsors first to get their thoughts. If they would allow us to do them every year and feel it's okay, we will probably do it every year instead of sending them to their home on the off years.

Edward Dressel:   14:47
What's been your responses from your plan sponsors?

Jane Hagen:   14:51
Well, I think they absolutely love the Gap Reports, because again, number one that their individualized and that we do in via paper. And again, I hate to sound old school, via paper when the world's going paperless, but again working with a lot of manufacturers that--I always start the employee meeting and we'll say, "Okay, how many have you gone on the website and checked your account lately?" Sometimes we'll get half the room. Sometimes we'll get one person. We encourage them to go online. We encourage them to look at their account. We encourage them to learn and to read all the things out there via the websites and so forth. But again, many of them just will not do that. I mean, it's the old saying that people would rather plan a vacation than ever plan a retirement, to retire someday, and I truly believe that. So that's why our plan's sponsors really, really value it. And I think they're very paternal, and they want to make sure they're doing the best for their employees and preparing them for the future. And they're always welcome, and welcoming more education for the staff when it comes to those types of things. We're actually looking at--and we've done it for a couple companies is--and this is a whole separate issue--but doing some additional classes on education in just preparing people on various aspects of preparing for retirement. We really feel strongly about education here at Tri-Star because I think "One person at a time, one day at a time and one increase a year" will get them to where they need to be.

Edward Dressel:   16:18
Your comment about paper--I actually have a study on my desk--it's in a pile of studies that I have--but there is some research showing that millennials prefer paper over the web. So you're anecdotal information has been confirmed in an outside study. If I find, that I'll send that to you.

Jane Hagen:   16:35
That's great. I'm really glad to hear that. It's kind of interesting. I think millenials sometimes get a bad rap, and I have two of them. And mine are working really hard and very motivated. But millennials get a bad rap. And I think a lot of millennials--if someone pays attention to them, takes them under their arm and really works with them to get them where they need to be and on track--I think they could be extremely successful.

Edward Dressel:   17:01
Do you have a fun story of one year participants engaging with the solution?

Jane Hagen:   17:05
I do. It's kind of interesting. He's an engineer and he's in his middle to late forties, and so is his wife. And they both have great jobs. And we did--and he works at an engineering firm--and we did the Gap Analysis, and it was probably within a month later he sent us a form back with additional information, and again they had some outside assets, so they wanted to sit down and go through the gap. So I met with him and his wife and they found where they're at, where they were going. They were not on track. I knew they were not on track. But I said on the trust side of the bank, we have full financial planning, which really is very, very in depth. And I always say, "This is a mini financial plan. This is our first step. But if you're on track here, you're gonna be okay. But if you're not, we need to probably take some additional step." So this couple, they certainly were not on track. And so they actually became clients on the personal trust side. We rolled over some previous retirement money of his wife, and we just have done the financial plan in the last year. And our financial planning department really kind of like had to point it out like, "You're not gonna make it unless you change your spending behaviors. They had credit card debt. They had everything. It's kind of amazing. It was the start of it. Doing that gap, showing them "Okay, You're not on track at all, But you have some time. You have 15 years here. You can change the scenario." And so in the last year, they have paid down debt, they're saving more in the 401ks, they have really set themselves in strict parameters of their income and knowing that, "Okay, we need to be more prudent about this" because they have great income. They were just not using it appropriately and not, you know, not really planning.   And that seeing that Gap Analysis for the first time was like, "Wow, this means we need to change." So that was very successful. But I've had many, many, many. It's the first step in them realizing, "Am I doing okay or am I not doing okay?" Because you know, you have the book out there that says, "Oh, you need a $1,000,000 to retire."  Well, not everybody needs a $1,000,000. Some people will need a lot more than a $1,000,000. So I really, I always say about the Gap Report, it's your first step. It gets you going in the right direction. Now, if you give us additional information, we will make it even more personal for you. And so it's--it's kind of interesting, year after year after we've been doing this--and gosh, Ed, you'll know better than I do--how many years have we had the software? But it's been a long time. We continue to see more and more people asking to have the analysis done over with additional information of their spouses or additional information that they may have a pension they may be receiving. So it's just it's very, very, very rewarding for myself and my team to see what the results have been and how it encourages participants to change their behavior. One of the new staff members I have in the last couple months, he's just he's been to several employees meetings down now and he's like, "I cannot believe this. This is kind of incredible." So he's just all excited about what it's doing and how it's changing behaviors.

Edward Dressel:   20:12
Having fun at meetings, rather than trying to figure out how to engage people, is quite a different approach to how you go to meetings.

Jane Hagen:   20:19
Oh my gosh, absolutely. You know, Ed, as I said earlier, I've been doing this for 25 years--how employees meetings have changed! It's kind of interesting, I think. When I first started, I was talking about the mutual funds, and that's all I talked about the entire time. And now we really don't even touch that because we have our model portfolios that the participants can use. And they love that because they don't have to figure it out. You know, we're taking on that fiduciary responsibility. So boy, they have. They've changed and changed so much for the better.

Edward Dressel:   20:47
When your prospecting for a new plan sponsor using this Gap Report as differentiator for your business?

Jane Hagen:   20:53
Oh, absolutely. So when we are going through our presentation with a plan sponsor, ensuring them what we would do, we have a whole area that's just on employee communications, and we show them how our communications change from year to year. We do a theme from year to year and how the candy bar relates back to it. And then we show him the Gap Report. And I would say I've definitely won new business because of the Gap Report because they're just not a lot of advisors that will take the additional time to do it out there. And it's definitely a differentiator.

Edward Dressel:   21:26
Well, Jane, it's been a pleasure to have you today. And in the interesting world we live in, I wish you the absolute best. 

Jane Hagen:   21:32
Appreciate it. Thank you so much for your time. 

Edward Dressel:   21:35
Thank you.