The American Society of Pension Professionals and Actuaries yesterday named Michael J. Malone, an adviser at MJM401K, the winner of its 2011 401(k) Adviser Leadership Award.
Mr. Malone was chosen from 70 nominations and six semifinalists. His firm, with offices in Phoenix and Santa Monica, Calif., focuses on 401(k) plans for middle market firms with about 500 to 5,000 employees and manages $2 billion in plan assets.
Mr. Malone, along with finalists Joe Connell, senior benefits consultant with Financial Concepts Inc., and Jim O'Shaughnessy, managing principal at Sheridan Road Financial, spoke about what made their practices tick yesterday at ASPPA's annual 401(k) Summit in Las Vegas.
Despite the fact that the firms focused on serving plan clients, the key to their success was helping employers influence employees to maximize their retirement accounts.
“It's impossible for us to be in front of tens of thousands of participants,” said Mr. Malone. “We set out a communication and education plan focusing on three or four behaviors.” Employee behaviors to watch out for include participants who are contributing to the plan but not enough to get an employer match or employees under the age of 40 who have placed all of their money into a stable value fund option, he added.
For Mr. Connell, whose firm manages $1.2 billion in plan assets and who takes core responsibility for about 30 of his firm's 98 plan clients, success at the plan level has been all about getting in front of participants. His firm holds at least two sessions each year with employees, but rollover capture isn't the end game in this case. “We're trying to stay the straight and narrow,” Mr. Connell said.
Rather, the firm works with employers and providers to help achieve the best results for participants hosting “laptop labs” and getting employees more comfortable with looking directly at their retirement accounts online. “Many providers put a full-time computer in the break room,” Mr. Connell said. “If you give them that time, the provider wins because new money comes into the plan. We have a fixed level charge and our assets grow. And the participant wins — they get a better measurement of statistics on their retirement success.”
Running a dually registered practice that focuses on plans with assets between $25 million to $250 million, Mr. O'Shaugnessy had historically provided plan education for 401(k)s working on the brokerage side, while on the advisory side, he provides separately priced services.
On the advisory side, plan clients are seeking a better grasp of what service providers can do for them. That has required MJM401K to strengthen its relationships with service providers, step up communication with them and perform on-site due diligence to sniff out how exactly a service provider can help plan clients reach their goals.
“We find the wealth resources they have is never given the opportunity to be used by brokers and advisers; those resources may never make it to the plan sponsor,” Mr. O'Shaugnessy said.
In turn, that education gets passed on to the plan via group meetings.
“We push the plan sponsor to understand that this isn't something you just implement and forget; they have to understand their goals and focus on improving outcomes,” Mr. O'Shaugnessy said.
