Geoff Huber

Happy New (401k) Plan Year!

Where did the time go? It’s 2017 already – are you ready for the New Year?

Clients tell us that competition for top employee talent in the marketplace is intense. Congrats on offering a 401k Retirement Savings Plan to your team! Do you know how it “stacks-up”? Consider making a New Years Resolution to get answers to these questions:

  1. How is your performance?

Did you know the S&P 500 was up +12.0% for the calendar 2016? (Or that +5.0% of this was following the US Presidential Election on November 8…) BUT if you missed the 3 best percentage gains days in 2016, the +12.0% gain falls to +4.4%. WOW! Further, the S&P 500 has been “up” the past 8 consecutive years, 13 out of the last 14 years, and 40 of the past 50.1

  1. Do you know how much your 401k plan costs?

If not, don’t panic, you’re not alone. 401k providers can mask various plan costs. Record-keeping. Administration. Custody. Mutual fund costs + other investment expenses. Trading fees. Broker commissions or plan consultant fees. Perhaps an even more relevant question to ask is “How muchshould my plan cost?

  1. Do your employees give a hoot?

How engaged (or not) are your employees in saving for their retirement? Do they “get” how much you are contributing on their behalf in matching or profit sharing? Do they get answers to top questions, like How much should I be saving? Am I on-track? Should I use Pre-tax or Roth after-tax dollars? Remember the adage, “You can’t manage what you can’t measure.”

  1. Do you expect to be audited?

Did you know 1 in 3 plan sponsors experienced a retirement plan audit by a government agency in the past 2 years.2(Not surprising, since the Obama administration beefed-up US Department of Labor staff.) Bottom line is BE PREPARED. Demand regular plan reviews from your advisor. Keep notes – or take Minutes. Know how much your plan costs. Remit employee deferrals timely. Have a written Investment Policy Statement – and follow it!

  1. Has your 401k advisor told you about the DOL’s Fiduciary Rule?

This sweeping reform is causing brokerage firms, insurance agencies and banks to decide how – or even “if” – they will permit their reps to continue to sell and service 401k Plans. Just recently, giants like Merrill Lynch & Edward Jones announced significantchanges to their policies. For example, Merrill says it will no longer allow its reps to be paid a commission on retirement plan accounts3. The rule is scheduled to kick-in on April 10, 20174 and will likely impact you. You deserve to know how.

 

—Geoff Huber, CFP®, ChFC, CLU, CKA® leads Triune’s Corporate Retirement Plans practice. His partners and clients think of him as a “401k Geek” – and he’s proud of it! Triune Financial Partners, LLC is an independent financial advisory firm serving retirement plans, family businesses, professional practices and partnerships. We are your Partner in Conversation. Learn more about 401k Benchmarking here.

SOURCES:

  1. BTN Research; January 2, 2017.
  2. Willis, Towers, Watson; September 2016.
  3. Wall Street Journal; October 6, 2016.
  4. Fact Sheet, U.S. Department of Labor. https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/dol-final-rule-to-address-conflicts-of-interest.

Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against loss in a declining market. Investing involves risks including potential loss of principal and fluctuating value. This content is provided for informational purposes, and it is not to be construed as tax or legal advice, nor as an offer, solicitation, recommendation or endorsement of any particular security, products, or services. Triune Financial Partners, LLC is an investment advisor registered with the Securities and Exchange Commission. Copyright 2017, Triune Financial Partners, LLC. We are likely to allow you to reproduce – please just ask us first. Thank you.

A Real Pro Retires from Triune

It’s been my treat for over 10 years now to call J. Emerson Hartzler my client, then colleague, and finally friend (for life). He is one of the most principled and disciplined men I’ve ever met. He invested in me deeply — and for this I doubt I’ll ever be able to re-pay him.

My dear friend Cindy introduced me to Emerson in late 2004. At the time, Emerson was COO of the largest cardiology group in Kansas City; indeed, among the 20 largest similar practices in America. Apparently, one of their Physicians had come to him questioning investment performance and expenses of their retirement plan — he had enlisted Cindy to help him address the issues. Cindy solicited my assistance, for which I will be forever grateful.

Emerson and I hit it off immediately: I found him to be thoughtful, considerate, intelligent and worldly (I imagine he found me to be immature). Initially, we had a marriage of convenience — we both had something each other needed. I was able to answer technical questions and provide less expensive, better performing options; Emerson offered access to one of the more sought-after physician groups in Kansas City. It was classic “You scratch my back, I,ll scratch yours.”

But Emerson was far more interested in me, and my development as a professional, than I could have ever dreamt at the time. He taught me how to organize and lead a Committee meeting (stay calm). No multiple-page handouts: one-pagers, no more! “If you can’t get it on one page, you don’t know it.” He reminded me that my vision didn’t always matter. I remember explaining in painstaking detail how we would come on-site to his firm to conduct wonderful workshops for his employees. He gently reminded me, “Geoff, that’s great, but just so you know, even if the Pope rolls through town, we don’t stop seeing patients.” And ultimately, “You will know you have succeeded when they know your name.”

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Turns out Emerson and my partner Jim Mullinix had met at church 30 years prior. And when they re-connected in 2005, Emerson shared with Jim his vision for the next chapter of his career. You see, he did not believe that retirement meant an easy chair and daily golf, but additionally he was driven to help regular folks make better financial decisions. This meant revolutionary notions like living within your means, spending less than you earn, saving money systematically, setting goals, giving generously and tracking your progress. He believed Triune should believe this, too.

Emerson, Mr. Principled & Disciplined, had already thought this out. He wanted to help others, with literally no regard for himself or his own personal gain. Thus, Triune’s pro-bono practice was born. As a result of Emerson’s influence, we have and will continue to serve clients without regard to their ability to pay us. Thanks to Emerson, we recognize we have no choice but do so — it’s the right thing to do. As Emerson departs, we’re committed to this important part of our company.

Emerson Hartzler, don’t be a stranger. We will miss you too much — and so we may be forced to let the air out of your bicycle tires.

If you’d like to send Emerson warm wishes on his retirement, you’re welcome to send them tothe Triune office. He’ll always be part of the Triune family.

Thanks to You, and by God’s Grace, We Celebrate Ten Years.

The 2005 Triune Team

The 2005 Triune Team

When Triune was formed, we were driven by ideals like collaboration, partnership and becoming a real firm. We did NOT want to be simply a collection of individual practitioners in an office-sharing arrangement. We wanted our clients to be served by more than one advisor, a TEAM of professionals. We also wanted to leave no stone unturned when researching issues for our clients, so that our advice would be rooted in academic research and facts, not in good salesmanship or groundless speculation about the impact of current events on the capital markets.

Our industry is rife with solo-practitioner shops who do a good job — but can only see things through a single lens (their own). And when that solo advisor is busy attending to important relationships in his or her family, church, kids’ schools, etc., who is there to serve the client?

Ten years has gone by fast! The future is bright.

For ten years, we have worked together collectively and collaboratively on behalf of our clients, as an independent advisory firm and as a real partnership. Adopting a ‘two are better than one’ mantra (Ecclesiastes 4:9-12) inspired us to provide uninterrupted service and advice to clients. We’ve developed a reputation as an anti-Wall Street firm by not being beholden to any bank, brokerage firm, insurance company or mutual fund manager — but rather by serving you. It is our highest calling to do so with diligence, independence, competency, experience and integrity.

We realize what a substantial commitment of time, energy, capacity and trust it is to invest in a relationship with us. So we want you to know that we take this responsibility very seriously.

Thank you so much for your support. It is our honor and privilege to be your Partners in Conversation. We are looking forward to the next ten years, together!

What does CARFAX mean for your 401(k)?

Do you remember CARFAX being around when you bought your first used car as a teenager? Probably not, since the company didn’t exist until 1984 — and only served automobile dealers (not the general public) until December 1996. Today, it would be unthinkable to consider a used car purchase without first requesting the CARFAX report, which contains important data about the car you are considering — like its title history, whether it’s been wrecked, flooded or salvaged, odometer readings, and certain accident and service records.

“Let the sleeping dog lie.” “The squeaky wheel gets the oil.” “If it ain’t broke, don’t fix it.”

Some call this conventional wisdom — but that’s not smart when it comes to your 401(k). Because in the world of 401(k) plans, what you don’t know really can hurt you. And for the overwhelming majority of Americans, their 401(k) plan balance will grow to become the largest single asset — and by far their most significant retirement account. So, inspired by CARFAX, Triune now offers its 401(k) Accountability Report.

We offer this report as a FREE service, to help you benchmark four key areas of your 401(k) plan:

Expenses: Do you know how much your 401(k) REALLY costs? Not just the investments — but ALSO the expenses for plan record-keeping, administration, brokerage fees, commissions, etc.? How does this all-in cost compare with what that cost SHOULD BE in today’s marketplace?

Employee Advising: How many people on your team are on-track to retire with dignity someday? Does each of them know if they are on-track? Do you know?

Performance: How do your funds stack up? Are high fund fees unnecessarily dragging down plan balances? Is everyone on your team in a diversified mix of funds that is right for them?

Plan Design & Service: Do you get mileage from your plan’s Roth provision? Do you review your written Investment Policy Statement at least annually? If your plan were audited, could you document that you’ve had regular, meaningful plan reviews?

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Inertia is a powerful force in the 401(k) universe, so continuing with a poor performing or costly 401(k) may lead to very disappointing outcomes. Our vision is to come alongside you, to help you be intentional about benchmarking the four elements of your 401(k) that matter the most. To learn more, contact me, Geoff Huber, today at finishstrong@triunefp.comor 913-825-6100.

Don’t Just Do Something, Sit There!

In many areas of life, intense activity and constant monitoring of results represent the path to success. However in investments and retirement planning, that approach gets turned on its head.  Academic research shows that the busier we are with our 401(k) investment mix and the more we tinker, the less likely we are to get good results.

That doesn’t mean that we should do nothing whatsoever. But it does mean that the world’s culture of busyness and chasing returns promoted by much of the financial services industry and media can work against our interests. The consequences are that most investors earn poor long-term returns and don’t accumulate enough for retirement.

We can’t control movements in the market. We can’t control news. We have no say over the headlines that threaten to distract us.  But each of us CAN control how much we contribute to our 401(k), whether we make Traditional (pre-tax) or Roth (post-tax) contributions, and how much risk we take in our investments.

The 401(k) plan sponsor can positively impact his or her employees’ retirement planning experience by helping them learn about and control the variables that matter.

For example, offering professionally-managed portfolios in your 401(k) plan can help immensely.  This is borne out annually in an analysis of investor behavior by research group Dalbar. In the 20 years, leading up to 2012, Dalbar found the average U.S. mutual fund investor underperformed the S&P 500 by nearly 4 percentage points a year.1  This documented difference between market returns and what investors receive is often due to individual behavior:  being insufficiently diversified, chasing returns, making bad timing decisions, and by investing in high-cost, actively managed funds in an ill-advised attempt to beat the market.

To combat this, it is estimated that 55% of all 401(k) participants will be entirely invested in a professionally-managed investment option by 2017.2  Triune believes there is real value in having competent, credentialed, and caring financial planners that will come alongside your team to help them make informed decisions.

For more information, please contact me: ghuber@triunefp.com, 913-825-6100.

  1. Quantitative Analysis of Investor Behavior, Dalbar, 2013.
  2. How America Saves 2013, The Vanguard Group, Inc., 2013.