Fiduciary duties and a meticulous approach are paramount in financial services, legal affairs, and trust management. For Derek Fiorenza, retirement plan specialist at Summit Group Retirement Planners, this shapes his approach to client relations – ensuring their financial future is handled with utmost care and professionalism.
“We strive to adhere to best fiduciary practices based on ERISA and case law," he says. “Our starting point is the CEFEX certification, which reviews and audits our entire process to ensure we conform to over 90 different precepts. We can take the retirement plan offered by our clients to their employees through the same certification process. This process is designed to ensure everything from good due diligence to adequate fiduciary liability insurance is in place."
Fiorenza goes on to highlight the importance of a fiduciary acknowledgment letter – saying that this is often overlooked.
"It's something that's missed a lot,” he explains. “It provides an extra layer of support, ensuring the company isn't holding the investment committee members liable if a lawsuit arises. I'm not an attorney – but these are some best practices I’ve learned from various ERISA attorneys. Striving to adopt and build best practices, going beyond compliance requirements, is one of the goals of pursuing and achieving the CEFEX certification.”
With 13 years in the industry, Fiorenza has seen how client expectations and industry trends have shifted firms’ core focus. Looking specifically at retirement planning with participants, when it comes to strategies, Fiorenza always begins with a thoughtful conversation around an individual’s goals and objectives. This typically leads to a conversation that is part of financial wellness on the importance of establishing and maintaining a budget, as well as understanding how consumer debt affects one’s ability to save today and invest for the future.
“In the course of a meeting, it is commonly shared that the individual has a budget, but when you dig a little deeper, often times it is not being followed, the information is out of date, or the data is not accurate.” he tells IN. “Starting with a budget and understanding your debt situation is crucial. It’s important to review one’s financial position holistically when deciding as to when the appropriate time is to begin saving for retirement. No situation is the same, and just like in life, saving and investing is full of nuances which requires the creation of thoughtful and intentional strategies."
Consumer debt is also a defining factor in retirement planning in 2024 – however, Fiorenza is quick to point out that not all debt is necessarily bad.
“Mortgage debt is much different to credit card debt – with some credit card debt being at 15-20% or possibly higher. What that tells me as an investor, is that I’d have to earn that much money at least to break even. And it's very hard. Obviously, you can't guarantee results on any type of investment so [again] my starting point becomes building a budget.[It’s about] understanding that we have a job as advisors to educate, because participants might not be receiving financial guidance anywhere else.”
As for the future, Fiorenza advocates for a balanced approach to debt repayment and retirement savings.
“Every practitioner might have a different take, but my guidance would be to develop a plan for the short and long term. What is the process for paying off consumer debt such as credit cards, and building an emergency savings account? What is the process to save and invest for retirement? Taking the time to thoughtfully navigate those waters holistically and intentionally helps to stay on track for the goals one creates and strives towards achieving. As a retirement plan specialist, we have witness a shift in the needs of the employees we serve.
“Saving for retirement and investing for the future is a goal to pursue, but we must remain vigilant and mindful of the fact that every person is in a different position and each induvial stands to benefit from personalized guidance and solutions that considers both the quantitative data and the qualitative information being presented. We see most small businesses really care about making sure that the employee experience is positive and engaging. We are also seeing this thoughtful approach be welcomed as employees appear to be deriving a lot of additional value, at least anecdotally from a robust educational offering.”
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