Retirement Plan Business
Webinar on demand: Pursue growth and stability with retirement plans

CE credit: 1 hr., CFP* and CIMA



Renee Grimm: Welcome to the PracticeLab webinar series. I'm your host today, Renee Grimm, the Northeast retirement plan division manager here at Capital Group. I'd like to thank everyone for joining us today. We have an exciting program in store for you. Today's session is focused on how you can drive growth in your practice using qualified retirement plans. And we have two very special speakers joining us today, Sam Gumma and Brandon Kennedy. And they're going to share some insights. But before I formally introduce them, I do want to cover a couple of housekeeping items.

For those of you that have CFP and CIMA designations, today's session is going to be eligible for CE credit. In order to get that credit, you will need to stay on the webinar with us for at least 50 minutes. And stick around towards the end; there will be a quiz that's quite short. You'll need to complete that, and you'll be able to find that quiz in the resource sections of our panel. You'll also be able to find today's slides and the PracticeLab articles that will be covered in depth during our discussion today.

Now, if you're a regular attendee, you know that we love your questions and participation. And I'm sorry to say, we ran into some technical difficulties this morning. So, the chat function is not working. However, if you do have questions, or you'd like more information, we welcome you to please contact your sales team. They are more than happy to engage with you. So, with that being said, I'd like to introduce our speakers today.

Up first, Sam Gumma is a great friend of mine and a wealth management consultant here at Capital Group. He covers the metro Detroit and northeast Michigan area. And with 28 years of industry experience, Sam's brought that to Capital over the last nine-plus years as he's been working with advisors in the Michigan area. He holds a bachelor's degree in business from the University of Detroit Mercy, as well a chartered retirement planning counselor designation. And Sam is based in West Bloomfield, Michigan.

Our other special guest today is Brandon Kennedy. This is a first for us. Brandon is the president of financial or ... I'm sorry, Kennedy Financial Group, which is a retirement plan and wealth management firm that's associated with LPL Financial. Brandon has more than 20 years of investment experience and is based in Troy, Michigan. So, Sam and Brandon, welcome and thank you so much for joining us today. We're very happy to have you here.

Brandon Kennedy: Thanks for having us.

Sam Gumma: Thank you.

Brandon Kennedy: Can't wait.

Renee Grimm: Great. Well, I'd love to dig into things today. So the first topic is sticky plan assets. And I think, a jumping off point here, we really want to address what we're talking about when we say the stabilizing effect of retirement plans. What does that mean? In my experience, in my view, as well as within this industry, retirement plan assets are typically pretty sticky. Which to us means they tend to remain pretty consistent throughout various market cycles. And what we've seen over the years is that, regardless of market conditions, retirement plan participants really tend to continue their contributions into the 401(k) through those automatic payroll deductions.

And if you look at the slide on the screen, you'll actually see that very, very few people make withdrawals or even stop making contributions during a variety of different market cycles. Now, if we look at this carefully, you'll notice that 2009 is a bit of a notable exception. But even then, only 2.7% of participants took a withdrawal or stopped contributing. So, that for many of you may seem like a pretty stark contrast to what you see in your wealth management book of business. And you know, during periods of market volatility, you often shift into a financial therapist-type role.

Retirement plans can really help stabilize that effect and free up more time for you to spend with your wealth clients. So, since we have Sam here, I'd really love to hear from you, Sam. You meet with advisors and generalists all the time. What insights can you potentially offer for how plan assets are affected by market conditions?

Sam Gumma: Yeah. You know, interesting thing, Renee, is that when we do have volatility, as you mentioned, the market on the retail side, clients tend to panic, right? We as advisors turn our attention to easing client fears, retaining assets, and then educating the client on the importance of just staying the course. However, on the retirement plan side, inflows are consistent, right? That study's absolutely right now. Clients rarely change or even halt their contributions to the plan. So, I look at it as, you know, it's great inflow into your practice, regardless of market conditions. And I always say it's a gift that keeps on giving. You know, gives to your practice, but also pays off for the participants long term.

Renee Grimm: I would agree, Sam. And so, if I'm hearing you right, even in years like 2023 where we've seen a lot of volatility, these retirement plans and this type of business really can help stabilize the practice of the financial professional, regardless of what your specialty or niche might be. But you know what's interesting?

Sam Gumma: Absolutely.

Renee Grimm: The volatility, it's not the only reason that now is a great time to become more fluent in retirement plan business. I've been preaching this for years. I think there are tons of factors that are out there that can create tailwinds for advisors. And right now, the legislative landscape, as well as some industry trends, are creating a ton of opportunities. So, thinking about retirement plans as a driver of growth, I think one of the trends is pretty noticeable, and we're seeing it both in wirehouse firms as well as independents. And Sam and Brandon, I'm going to let you speak a little bit more to the independent side.

But we've seen that many of these broker-dealer firms are starting to prioritize plan business in significant ways. Mainly, they're asking wealth advisors to cross-sell more plans. And I think with this shift in priorities, when we're switching firms in the future, that might require fluency in both wealth management as well as plan business. And there's also some really compelling data that shows, at the broker-dealer level, the business is starting to show much more balance between wealth management and retirement plans. And we also know, as you'll see on the slide, that the highest growth practices are usually those that leverage retirement plans.

And what I mean by that is: Capital actually did a financial benchmark study and we found that, like, most advisors that did retirement plan business had 50% higher assets in their retirement plans, and they also had 25% more AUM. So what this data is essentially going to suggest is that wirehouses particularly are recognizing this trend, this opportunity, and that retirement plans can be a catalyst for growth. Now, Sam, I know that you don't call on a ton of wires. You've got a ton of exposure over cross-channel independents. What are you seeing in your market?

Sam Gumma: You know, it's not much different, Renee. The independent channel’s also emphasizing this. You mentioned the word generalist, meaning the advisor. So, for a long time, that generalist advisor has tended to shy away from this retirement plan business and kept it to the so-called retirement plan specialist. However, today, that's not the case. With the help of trusted partners and many firms, the independent side have added additional resources, such as an internal retirement plan specialist. And they're there to help the advisor get more of their fair share. So, firms are realizing that it can be a growth engine for the advisor, as well as the broker-dealer.

So, I can say that the most successful advisors that I work with on the wealth management side also do retirement plan business. They do not allow that business to walk over to their competitors. And I know it's not really that complex as one may think. And once you get one, maybe two plans under your belt, that third one’s easier. And a lot of broker-dealers are adding the resources to help their advisors win that business.

Renee Grimm: Great perspective. Now, Brandon, I had mentioned in the opening that your firm is affiliated with LPL. I'd love for you to, you know, maybe share some insights into LPL's attention to retirement plans and what that might look like.

Brandon Kennedy: It’s been a little over 15 years, and I would say, at the start of it, it almost, there was a sense of, "No, stay away from those things." And that, especially over the last five years, has evolved where I think it's almost a complete 180 of, they are providing additional resources, you know, on not just the actual mechanics of the plan and, access to different providers, but on the financial wellness side as well. So, very much, they've made a movement to embracing that advisors can work well in this space, even if they aren't completely focused on retirement plans. And they provide a ton of resources. So, it's definitely an area that they are moving all in on, not just keeping it away from us, but actually, yeah, giving us some resources to do a good job on that front.

Renee Grimm: I love that. And I think this is one of those situations, I'm probably going to kick myself for saying it later, but the trend is definitely our friend. So I love that. And I'm so happy to see that more and more dealers, both on the independent and on the wirehouse side, are starting to embrace that. So, that's one tailwind. Now, there may be a number of people that are still asking essentially, you know, "Why now? What do we do?" And there are a lot of different tailwinds, I think, that are out there in the marketplace for us. And we would be remiss if we didn't talk about Secure Act 2.0. We'll spend a little bit of time here.

But for those of you who maybe are still trying to wrap your arms around Secure Act 2.0, you know, this provision and this act passed with 92 different provisions that were really specifically intended not only to get more access to retirement plans, but to remove some of those barriers to entry. But most importantly, to close the savings gap. And we're going to talk a little bit more about that. So, Sam, you know, since you are meeting with so many wealth management advisors and, you know, the generalists if you will. They do so many different things. I'd love to touch a little bit on what you're talking about and how you're framing out Secure Act for those advisors.

Sam Gumma: You know, there's a lot here. A lot to unpack. But I'll do my best to kind of bundle this up really. Secure Act 2.0 has definitely opened up a huge opportunity. One: It's created a substantial new startup plan tax credit based on contributions the employer makes on behalf of the participants. And it's also expanded the existing startup tax credit on the employer out-of-pocket plan costs. So, together, it can be a significant benefit to the business owner or to the business that's starting the plan. So, first, the new employer contribution tax credit, this reimburses small businesses for a portion of the employer contributions. For smaller plans that are 50 and fewer employees, the tax credit starts at 100% of the contributions made for any employee earning less than 100,000, up to $1,000 tax credit.

There is a phase-down schedule on that. The first two years, it's 100%. The third year, it's 75%. Fourth year, it's 50%. And the fifth year, it's 25%. So, for larger plans though, for 51 to 100 employees, that tax credit also phases down in that same schedule, but it is subject to some additional reductions. Then, second, there's an existing plan cost credit that's been increased from 50% to now 100% of the eligible plan costs for the employer with 50 or fewer employees. So, there is a lot to take advantage of. If I were an advisor today, I think it'd be a great conversation, a value-add conversation to have with your business owner clients, but also your CPA relationships. I'm surprised that there are many CPAs that don't know about this, and as an advisor to bring that value-add to that CPA and their business owners would be a huge win.

Renee Grimm: I think that's a great point. And it's certainly a, you know, CPAs are such an incredible resource. But often an advisor can help them understand more about what's going on in the retirement plan space and deepen their relationships as well.

Renee Grimm: I do want to touch on a couple of additional provisions that are aimed at not only closing that savings gap, but also creating some employer incentives. So, a couple of unique things. So, starting technically in 2025, auto-enrollment and auto-escalation will be mandatory for certain startup plans. What's also notable about that is, really, any 401(k), well most new 401(k)s and 403(b)s that are established after December 29th of last year 2023, are going to be required to include the auto-enrollment and auto-escalation provisions, with the option, of course, that participants can opt out. And that would be effective for plan years beginning after December 31st, 2024.

So as I said, most plans, there are some exceptions that apply, including small businesses, so 10 or fewer employees, new businesses that have been established for less than three years, church, and governmental plans. And if you were trying to wiggle your pen and capture all of that, we have some really fantastic resources that lay out some of the most impactful provisions of SECURE Act.

But with respect to auto-enrollment, what you'll see on the screen is a really compelling study done by Vanguard in 2021 that actually found that the new higher participation rate was nearly triple. It was 91% under an auto-enrollment, compared to 28% for voluntary enrollment. And what I think about this is everyone wins. Your employees are actually saving, right? They're getting money set aside a little bit at a time, and we all know it's time, not timing. You as the financial professional on the plan, you win, because now you have more flows consistently coming into your book every two weeks. And the plan sponsor wins as well. Capital Group's conducted quite a bit of small-business research lately, and we have found that employers that offer qualified retirement plans tend to actually have happier employees, that have greater overall satisfaction, not just with the economy, but also with their place of employment, so tons of great incentives. Everyone wins.

Brandon, I'd love to come to you here. Can you talk a little bit about how you're helping plan sponsors make sense of the different provisions, or how to make good use of the SECURE Act?

Brandon Kennedy: Yeah, for sure. I think, as Sam was rattling off some of those, and I don't know what you said, 90-something provisions, it's a lot, and we're in the industry. So you look at, now, a plan sponsor, who this is not their business. It's our job in the marketplace to talk with plan sponsors and filter out the noise, make sense of all of that. One of our core values as a firm is make the complex simple, and that, boy, what an opportunity to do that. And on some of the other mandates that might be coming and things like that, have these conversations, whether it applies to them or now, with plan sponsors. Let them know, these are some things that are happening. These are some things that are down the road. It's a great conversation opener to talk through how can we future-proof your plan on where the industry's going? And it's just a great way to take all of this complex stuff and kind of distill it down to what might impact their actual plan, and it's just a great way to have some good conversations.

Renee Grimm: Great point, and I'm going to latch onto kind of where things are going. I think this is a great time to transition into state mandates, and how that can also create opportunities, no matter what state you live in, and in my opinion, no matter what the legislative effort, the mandated plan, or nothing at all is happening. So, to my right, you're actually going to see the state-sponsored plans here in the United States are in fact gaining traction. So I'll distill it for you.

Of the entire United States, 46 out of 50 different states have some sort of either plan in place, or, whether it's voluntary or mandatory, or they're considering legislation, they're doing the research. And, and so really, I think when we think about this, what that means, each program is unique, and 11 of the states require that employees either enroll in an automatic enrollment of the state-run payroll deduction IRA, or that the employer has to offer some sort of tax favor retirement plan to their workers.

Now, some states have more teeth than others. The penalties could be pretty substantial, depending on where you live. But regardless of what's happening in your specific state, and I think Brandon, with you being here, this is a, a great example. This does present an opportunity to talk to business owners about the options that they have, before they might get shuffled into the potentially undesirable state program. So Brandon, similar question. Are you talking about this with the employers? I know it's voluntary in the state of Michigan. But still, you know, there's choice here, so how are you having those conversations?

Brandon Kennedy: Yeah, I'm a big proponent of making these things automatic, right? This shouldn't be a … Yeah, I mean, you can opt out if you really want to, but getting people to have good outcomes for retirement requires contributions going in, going in from day one, taking advantage of matches, escalating. All of those things are great conversations to have, and plan sponsors, you know, the business owners are supportive of it, right? It makes sense. It benefits everybody, so it's not anything that you should avoid. If anything, you kind of just dive into those conversations.

Renee Grimm: I love that. And, and having a reason to engage with plan sponsors is key. Speaking of engagement, our producers have just let me know that technology is back on track, so if you do have a question, our Q&A is now working. As I said, we would love to hear from you, so engage with us. Let's make this a really rich and robust conversation. So Brandon, dovetailing off of your conversation or your comment, how do we engage with plan sponsors?

You know, in the past, we would usually talk about how plan sponsors would move for four main reasons. And we would say fees, funds, service, liability. And, and some of those are still the case. But I think another really interesting thing that's happening right now is that plan sponsors are intent on making moves. We have a Fidelity study, and it essentially shows that 47% of plan sponsors are considering a new advisor. And that's an all-time high, so, you know, I'm not a mathematician. I'm going to round up and basically say one of every two plan sponsors is looking for a new advisor, and there's a lot of reasons behind that. I think the other consideration that's really compelling about this is that 57% of these plan sponsors have implemented a financial wellness program in the last two years. Now, I'd said previously that employers that are offering a retirement plan tend to be a bit more in tune with their employees, and part of that is offering financial wellness. So, you know, Sam, I'm going to pivot to you. What are you hearing from advisors? And what does it seem like, in terms of plans in motion and plan sponsors looking for engagement?

Sam Gumma: Yeah, you would think, you know, one out of two advisors, or plan sponsors are looking to move. That's... I feel it. I see it. I am getting more calls from advisors than before. They are engaging with us more. I know when this happens, there's something afoot, right? Either-

Renee Grimm: Yeah.

Sam Gumma: ... they're looking to either protect the plan, maybe they're looking to start a plan, or they're looking to take over a plan. And so again, I think these plan sponsors are engaging with their advisors, and in turn, they're engaging with us. I get a call, "Hey, Sam. I have an opportunity. Can you help?" And absolutely, we can help. Or we'll direct you where it makes sense for that situation. But we are getting those calls.

Renee Grimm: I love that. And you know, we haven't really talked about it, but you know, that's... We'll get into a little bit more about coverage kind of towards the end of our program, but I think this is a great opportunity. You know, Sam, you meet with so many people. And I, once upon a time, had the great fortune of being your business partner, so I know how incredibly impactful you are with your clients. When we think about how an advisor demonstrates their value and, and as I had mentioned, we have fees, funds, service, liability. There's a lot of different openings in the retirement plan space. I think where we have an opportunity to kind of dig in now, and set the stage for the next kind of facet of our conversation, is how you can actually pursue this type of growth in your practice.

And so, we have lots of opportunities, lots of catalysts out there to start improving your retirement plan fluency, as we like to say. But I think on a more personal level, you know, retirement plans can add a lot of really intangible benefits, but very, very real value to your practice. And, when you work with retirement plans, you're reaching out to people that you might not have the opportunity to work with otherwise, and usually, these are people that need your help, and who may be able to help you too. And I think that can be one of the most rewarding parts of working on the retirement plan side.

So let's first dig into how you could build on your commitment, and I want to talk about a really simple strategy and one of the ways that retirement plans can help you reach more people, and that simply through the nature of growth. So, what you're going to see here is a strategy we've been talking about for years, and it's, we used to call it Small Steps, Big Business. And essentially, if you win two plans a year, you will, each year, every year, for 10 years, what you're essentially looking at are, a startup plan with about 30 participants, and then maybe a takeover plan. Two-and-a-half million, also with 30 participants. We're going to keep the math simple for me.

At the end of about a 10-year period, that's 600 new retirement plan participants that you can get in front of, help them prepare for retirement, possibly make them or friends and family wealth management clients. And in this particular hypothetical, it also has added $60 million in assets to the book. So when thinking about, you know, as a growth engine, this is a great way to do it. But you know, for any of our advisors on the line, I'm sure you're thinking, "Wholesalers always have great ideas, but in practice, what does this really look like?" So, Brandon, you had a chance to do this. You've been successful. Is this realistic?

Brandon Kennedy: Yeah, it's funny. I had to laugh when I saw this chart. It’s funny, you talk about wholesalers and their charts. This is exactly what has played out. We did it, actually, in about six or seven years. I wouldn't say we had a clear strategy behind doing it. We sort of jumped in, got a few plans, got some referrals, and, you know, like I said, we did it in six or seven years. I think what we're really excited for is the number of participants. I think that's something not to sleep on. You know, if you're, you're kicking the tires on, "Should I jump into this arena?" Now you're talking about 600 people, potentially, who have outside 401(k)s, who will retire or change jobs at some point. The reach that that can have over time is just incredible. We're just starting to scratch the surface of that, and to see some of that business that comes from building just a strategy. And it became a strategy over the last maybe four or five, to continually add new plans and new participants, and play the long game on what that can mean for a practice.

Renee Grimm: I love that, and I think your comments there fit so nicely into, essentially, the next place we can go, your commitment to retirement. And as I had mentioned previously, with SECURE Act, some of those 92 provisions were really intended to close the savings gap. And what we're looking at here is just how desperately people need the help of everybody here. Every single one of you that are on this webinar today, they need your help, and I will tell you, participants want to be led.

So what you're seeing here, you know, Americans are under-prepared for retirement. We know it we've been talking about it for years, but when you look at the numbers, it is awe-striking, really. So again, here a Vanguard study. Median 401(k) balance for a person age 65 and older in this country is $87,725. Well Kept Wallet produced a survey, and recommended that your balance by the time you're age 65, if you are earning the US median income, which is about $57,200, your balance should be $457,600. I am not a mathematician, but I know that that is an insurmountable gap, and something has to be done, so you can start helping to close that gap by working with retirement plans.

And, I'd love to just kind of take this moment. I have to get on my soapbox. Why I chose retirement plans is exactly this.

If you are in this business, you will have the opportunity to help people achieve a little piece of the American dream. No one wants to work until they die.

And at the end of every year, when I was a retirement plan counselor, I could look back at the body of work and know, in working with people like Brandon, that we affected a lot of people. And we're starting to do some good work to be able to close that gap.

And another way to close that gap is to connect with diverse prospects and help them reach their goal. So when we work with plans, it can help you as a financial professional get exposure to audiences that you might not have access to right now. And we've talked about that, hinted at it.

But I think, for instance, if you look at a retirement plan participant, they do tend to skew a little bit younger, giving you a really valuable opportunity to form relationships with the next generation of savers, young people who might think of you when they need financial advice. And you're there to be able to help them, and really value or help them see the value that you can bring.

You can also get access to participants across very diverse racial and ethnic backgrounds. And what we've also learned through our research is that the needs for different communities can vary greatly. And a one-size-fits-all approach just doesn't work, so the more opportunity and access they have to financial professionals, the more opportunity they have to close the gap for themselves. I think that's really important. We also know that there's a gap in participation rates between white, Black, and Hispanic/Latinos as well as heads of household, which you can help make those efforts to close that. And I think this is an area that's really rich, really ripe for discussion.

We could spend a whole webinar talking about diversity, equity and inclusion topics. And if this is something that you'd like to cover more in future webinars, please let us know. We have some great research and some great content out there to help you not only have these conversations, but also to leverage that in your practice.

So we've also mentioned how retirement plans can be a multiplier effect. And what we mean by that is it, it's a simple compounding result, continual contributions into a retirement plan. And in a similar way, any sort of continual effort will help you in building a business that can potentially multiply over time.

So a small example. If you work with one executive on a plan, they might introduce you to a couple of peers at other companies that could be very healthy prospects, both for wealth management, but might also be able to help you find your way into a corporate retirement plan for their corporation.

Similarly, the same principle can apply for business-to-business referrals. And we saw in the previous slide the number of participants can help you as well in reaching additional referrals. So retirement plans, as we've said, can become really just another way to multiply the scope of your business.

So Brandon, you mentioned that you grew your business through the retirement plans in about six to seven years. Can you tell us a little bit about how this has played out for you?

Brandon Kennedy: Yeah. I think there's a couple of areas that kind of come to mind for me. It's the, let's go to business-to-business potential referrals that come from that.

I was not an expert in that field. Right? That was not, I don't have any cutting-edge technology or some knowledge that the average advisor couldn't achieve by just doing some research and getting into the weeds of these plans.

But what I've found is, if you show up, you stay engaged, you do plan reviews, you just do what I would say is the bare minimum, it's what a lot of other advisors are not doing.

And to get referrals from existing plans that you're on, business owners talk to other business owners. Those C-suite-level people are all in the same groups. And you can get referrals from that.

So I think that's an easy way, just by servicing, doing a great job on the plans that you do have, or the ones that you do acquire. That could be a growth driver as well. So you're not, that's not even prospecting. That just doing your job and getting some business.

And then the other thing is plan participants. That's, like I said, we are just scratching the surface of that. But you know, when you engage, we do a lot of one-on-ones. We go out there. We connect with people. We'll give them 20 minutes to ask anything and everything that's on their mind.

And you start to build relationships with those plan participants, and good things come from that. Right? You might uncover old 401(k)s that they have just sitting there, if they're a newer employee. Who knows what the spouse has?

And you just build some relationships by showing up, doing the financial wellness and education. And that can help grow the retail, the wealth management end of the practice as well.

Renee Grimm: That is, that is fantastic, Brandon. So as you were speaking, three words came to mind. And for any of our attendees on this call today, if you were to write down three specific words and what this can do for you, and I think what Brandon was describing: cultivating, durable, loyalty.

It's something that we've talked about in the past. We haven't really used that in a while, but I think Brandon, that's exactly what you've described, whether it's on the plan sponsor or on the employee side.

So let's continue kind of with this path, and let's dig into more of that multiplier effect that we saw on a previous slide. So what is coming up here, you're going to see some stats here in just a moment around important financial resources. And there is a large body of work that went into this.

But what I'd like for people to know is that employees want to be led. When it comes to helping plan participants, it is important to know that employees want advice from a financial professional, whether they have a plan or not.

And I think also the access to financial professionals, as we see on the top of the bar graph here, those with a plan, 59% of the participants want access to a financial professional. And even when a plan is not in place, nearly half of the employees would like the same.

What's the simple solution to give participants and employees access to an advisor? It's to have a plan. So that's a great incentive right there.

So right now, we know that employees are really relying on their own network. The three key places that they go for information are friends, family and social media. And that can be pretty devastating (laughs), depending on who your friends, your family, or what you follow on social media can be.

It's important that they have access to prudent financial advice, and they would really rather hear from professionals such as yourselves. So like you, Brandon, you deeply service your clients, and I think that brings us to the highlight of our program.

We're going to dig in a little bit into your insights, your experience, and how you've been able to build the capacity, leverage resources, and what you've taken away. So, we're just going to have a conversation.

Sam, chime in if you hear something. I know you work so closely with Brandon. But Brandon, I'm going to start with the end in mind. What about your practice today are you most proud of?

Brandon Kennedy: Oh, yeah. It's been a long road kind of getting here. But I think the biggest thing for me on the retirement plan, shifting to that focus, is why I got into the business was to help people live their best financial life. It's literally our mission as a firm.

And I think what's really unique on the retirement plan side is there is a very large group of people who their only access to a financial advisor is going to be through their 401(k) plan. That may be their only place that they ever save, and they can still have very good outcomes with an aggressive contribution, getting some matches, and being diligent about what they're doing.

And to be able to plug into hundreds if not thousands of participants to be able to make that impact, that's a pretty special thing, and why we've really leaned into continuing to want to build the practice and grow on the retirement plan, because one new client can potentially be, for a plan, can potentially be hundreds of new participants that you can help in real outcomes and real life change. And that's pretty powerful.

Renee Grimm: I love that.

Sam Gumma: Really quickly, Renee, if I may. So Brandon's being too humble. I started working with Brandon maybe one year after he joined LPL. Is that right, Brandon?

Brandon Kennedy: I think that's right. Almost 15 years we've known each other.

Sam Gumma: 15 years. And I remember sitting in his office, he was a sole practitioner, and talking about clients. And he said to me, "I just want to do what's right by the client." And, so I remember that conversation.

And today, the last time I sat in your office, you told me you're looking for another advisor to help the participants, because you are at almost capacity. Right? So, pat yourself on the back. You've done a fabulous job by just doing the right thing for the participants and your clients.

And I know some clients have, or some advisors have minimums. I feel like you take care of any client that comes through your door that needs a little help. And I think that's where you set yourself apart.

Brandon Kennedy: I appreciate that, Sam. Yeah. No. We still have not instituted a minimum. We serve people at different levels. And then again, on the retirement plan standpoint, that's even better. Right?

They're people who just started, never saved a dollar in their life. We'll sit down with them on these one-on-ones and educate them, get them off to a right start.

I, that's why we got into this business, for the most part. Right? Compensation comes, and all those good things happen. But to provide education and resources and help people, have a plan to navigate this complex financial world, boy, that's a great calling to have.

Renee Grimm: It certainly is. Oh, I get so passionate. I think people, people that know me know I get, nobody gets more excited about 401(k)s than Renee Grimm. It's the oddest thing. OK. So Sam, I'm really glad you chimed in about that. Brandon, so aside from your relationship with Sam, obviously that helped open the door for all of us to work together. When I say all of us, I mean the whole American Funds team.

You mentioned resources, resources for employees. But before you can even get to the employees, you've got to get to the plan sponsor. So where did you start? What resources did you use as you embarked on this process of building out the plan business?

Brandon Kennedy: Yeah. I mean, we, I think this is the advice of most getting started. If you have a retail practice, you probably have a handful if not a lot of business owners. And I think it's a mistake to say, "Oh, I don't handle that. Let someone else, or do that on your own."

And that's how we got started, is there were enough business owners that we had that came to us, and instead of, I'm always fearful of saying, "Yeah. Go try it somewhere else." And then, now that advisor has their access to their information and how much they're saving and doing all of that for the business owner.

So for us, it was very much just organic that we worked with these people. They asked for some help, and that's our nature, is we jumped right in and said, "Let's figure this out."

Again, I was not an expert, so, had to do a deep dive into learning the language. It's very different, but it's, I don't claim to be the smartest person out there. If you put in the time and, for the right reasons you want to get into that space, you can learn these things, and you can add a ton of value to these plan sponsors that, again, we're in the industry and it's confusing. Imagine, put yourself in their shoes. Right? You run a tool and die shop. This is not your area of expertise.

And it's really our job to get out there and to educate and craft the right plan for them. So that's really what we went to work with and started to acquire some plans organically within our existing practice. Then we started doing a little bit more marketing and getting out there to prospect for these plans.

Renee Grimm: That's awesome. So, I'm going to come to a kind of multi-part question. I want to ask this one upfront in terms of getting into the business, what you learned. And then I'm going to ask you this question again in a couple of minutes, because I've got a plan for where this conversation's going to go.

So as you were growing, as you were trying to engage, what were some of the key takeaways? What'd you learn?

Brandon Kennedy: Yeah, you got to know your stuff, right? It is a complicated world, and you need to leverage resources. I was not told to do this, but American Funds has been a really good resource. They have great tools, really good partners to help you along the way. I think we're going to get into that a little bit later on, but that was huge, just soak up information. There are a lot of really good partners, whether it's your broker-dealer or outside companies, that offer plans. Meet with those folks and just dive into it and learn the material.

Once you start to get a couple of those, I think Sam had said that earlier, the third, the fourth, the fifth, they all start to have similarities where it's not as complex. The first one's the scariest, like anything. But once you do that, you're in good shape.

Then, from there we had to start building a team, because there's a lot, from the administration to the investments to the financial wellness. We've built a team that goes hand in hand with the wealth management side, but that has been a key as well. We learned we had to have increased staff to be able to serve those plans, to get out there and to have that high touch that we like to have for the plans, and that's been great. That's been really great.

Sam Gumma: Renee, the first couple, I remember, that Brandon was going after, he became a student of the business when it comes to retirement plan side. I remember having several conversations. I had a lot to learn myself. And I'd have to bring in my retirement plan counterpart to help me understand some things, so there was several conversations that Brandon would have with us before he actually went to the plan sponsor. He wanted to make sure that all his I's were dotted, his T's were crossed. Sometimes, you know, we revisit that plan all over again, and then he'd go out and make that presentation. And I believe we've probably been to a few of those presentations with you in the past.

So he, he dove in, you know, feet first, became a student of the business, and wanted all the ... said, "Hey, what else can ... should I be looking at? What else should I know? What else should I be reading?" So I got to give him credit for that.

Renee Grimm: I love that, and I think this is a great time to remind our audience: We would love your questions. We've got enough time to hear from you. So Brandon, some of your comments, I'm hearing padlock, right? Padlock to your business. I'm also hearing the importance of increasing that fluency. You've also shared, and we know that you've been successful in this part of the business.

So, similar type vein here, once you became more fluent in retirement plans, how did you also become more efficient with your time? And how did you essentially create the bandwidth to add more plan business?

Brandon Kennedy: Yeah. No, I don't want to paint the picture that it was easy, but what we learned is we need to focus on what we were really good at, and that is we can do a great job on the investment side, the lineup, helping the plan sponsors get the right lineup for their participants, and then we really do a ton on the financial wellness side.

That's our wheelhouse. That's what we do, taking our experience from the wealth management. We're really good at investments and education and financial wellness. So that, and then what we found is we had to know enough to have intelligent conversations on plan design and administration and notices and all that stuff that probably scares most people away from jumping into the business. And for us, we had to know enough, and thanks, Sam, for the nice comments. We did have to really step up our education on that, and then, again, I go back to our team. I would be useless without a really good team who helped segment some of those things and coordinate with our partners on the administrative side.

So you're not on an island by yourself, even if you're a solo practitioner. I started my first, you know, plans with me and Lauren, my longtime admin. We figured it out. As we grew, it made sense to be a little more narrowly focused in in those different areas, but still, my advice would be, lean into your wheelhouse and what you're good at, and then outsource and/or hire on the stuff that you really shouldn't become an expert on, and that's been really good for us.

Renee Grimm: Fantastic. So let's dig in a little bit now to resources. So, Brandon, obviously we can bifurcate this into winning plans, retaining plans, and thank you. We didn't discuss the plug. But I know firsthand you did use a number of the American Funds' resources in order to start developing this business and winning plans. So let's focus on that for a moment.

Let's kind of focus on win plans. So, we had talked about some of these resources. Tell us more about kind of what was important for you, maybe how you used these resources, and how it really ended up helping you win some meaningful business.

Brandon Kennedy: Sure. The retirement value proposition worksheet. You guys have had that forever. It was a simple, and I'm really simple into my presentations, and I don't go in with this big 45-minute presentation. It's a one-pager, and you're, you have a couple of headings, and that's followed by a couple of bullet points on what do you do as a retirement plan advisor. And I still use it today. Now, I've tweaked it and modified it a little bit as sort of the industry's changed, but it's still a one-pager. It's very simple. You send that out, either ahead of time as part of the initial agenda, can use it as a prospecting tool just to just distill it down to the simple stuff that plan sponsors are looking for, and that's an incredible tool.

When I first saw it, I was like, "OK, yeah, that's great. That’s too simple." It works. It works. We use that for the single largest plan that we brought on. It was a one-page value proposition, and like I said, I still use it today.

Second area that I would say we have leveraged American Funds directly is the, what you said, the strategy sessions. So, Renee, this was, I think, your, in your last month or so. When you were in the field here in metro Detroit, it was a pretty significant plan that we sat down, and I distinctly remember on this plan, because we had had, I don't know, maybe seven or eight plans at that point, nowhere near the size of this one, and I remember asking you, "Am I even worthy? Should I even be throwing my hat in the ring here on this plan?" And you said, "Absolutely. This is a plan you can get. You've got an existing relationship. Let's talk through how we're going to win the plan," and that was incredibly valuable.

That was, you know, and we didn't, we, you know. I don't know if I told you this or not (laughs), but we always go in with a couple of choices, so I didn't go in with American Funds only. But you guys took the time to really have a strategy session's the great way to put it, because that's what it was. Just let's brainstorm. What are their pain points? How do we approach this? How are we going to go in and win this plan? And that was incredibly helpful, and to give me the confidence I think that I didn't have, that we can win this plan and we can hit on the things that we need to.

So, those two things, from a really, really simple one-pager to a pretty complicated, little more drawn out, lots of moving parts of a plan to win the business, that works incredibly well.

Renee Grimm: I love that. Well, thank you, Brandon. I know there are more resources there we didn't even get to touch on, but you know, you mentioned the value proposition statement, so just for good measure, for all of our attendees on the webinar, if this is something that appeals to you, simplicity is the greatest form of elegance. And we've all heard the acronym KISS, right? Just keep it simple, and that's exactly what the value proposition statement does. It is available for qualified retirement plans. It is available for wealth management business. It is available for endowments. And, just for the audience, I'm not going to reveal too much about Brandon's business, but it was an eight-figure plan that he was able to win.

So, no matter which part of the market it is that you are looking to tackle, keeping it simple and communicating and being committed to your value I think is incredibly important.

So, it's about time for us to conclude our time together, and what I'd like to do before we really shut it down, I just want to make sure that everyone knows that we are here to help. We are here to help you win and retain the plans. It is truly a pleasure. We had Sam here because, in many of these cases, our wealth management consultants like Sam Gumma and his counterparts across the country are the tip of the spear. They're meeting with so many of the wealth management advisors, and they want to break into the business or maybe they just happen to have that one-off plan that's come to them.

Sam, his counterparts, they all work with retirement plan counselors in the territory, the true snipers, if you will, of the retirement plan industry. They're there to help discuss more of the resources that might be fitting for whatever specific need or prospect you have. Whether that's finding new opportunities, managing the ones that you have, or just helping you get comfortable in the space.

There are also some PracticeLab resources that we'd love for you to know about. So, as we kind of bring this to a close, I wanted you to know about these QR codes. If you have a cell phone handy, feel free to scan those, and if you do that, you'll get access to a one-pager on winning and retaining plans. Also, our one-meeting close. Essentially, this is what it is. It'll show you what the fee disclosures are, help us put together an incredibly compelling simple analysis of how much they're paying, how much they could be paying.

If you're interested in another advisor's path to finding success in this business, check out the podcast that's there. And lastly, we do have, tons of different wealth management resources, as well as the retirement plan business and other topics to really help you round out your business. And of course, don't forget about the CE credit for attending today.

I would like to thank you all for joining us today, and Sam, Brandon, thank you for the insights. Thank you for being here. We all appreciate your business, your time and your commitment to improving investors' outcomes. Thank you for attending PracticeLab. My name's Renee Grimm. I've been your host today, and we'll see you next time.


Are you leveraging the power of retirement plans?

In our Pathways to Growth: Advisor Benchmark Study, the highest growth practices were more likely to have employer-sponsored retirement plan assets under management. In this webinar, Capital Group retirement specialists Renee Grimm and Sam Gumma will share insights on why now can be a good time to get into or expand your retirement plan business. Plus, Brandon Kennedy will share how retirement plans have helped diversify his practice and drive consistent growth.

Register now for this CE credit event to learn how retirement plans can be a durable business multiplier for your practice.  

What you’ll get:

  • An overview of the changing retirement plan landscape and new opportunities for business in the wake of SECURE 2.0. 
  • Real-world strategies on how to start, grow and scale your retirement plan business from a successful plan advisor.
  • Insights on how to create a strong value proposition statement that can help open the door to new sales.

Who can benefit: Financial professionals seeking to start managing retirement plan assets or grow their retirement plan business.

Sam Gumma is a wealth management consultant at Capital Group, home of American Funds, covering metro Detroit and northeast Michigan. He has 28 years of investment industry experience and has been with Capital Group for nine years. Prior to joining Capital, Sam was a regional business consultant at John Hancock and a wholesaler at Munder Capital Management. He holds a bachelor’s degree in business from the University of Detroit Mercy. He also holds the Chartered Retirement Planning Counselor℠ designation. Sam is based in West Bloomfield, Michigan.

Renee Grimm is a division manager with 16 years of industry experience (as of 12/31/2023). She holds a bachelor’s degree from the University of Kentucky. She also holds the Certified Investment Management Analyst® designation.

Brandon Kennedy is president of Kennedy Financial Group in southeastern Michigan. He earned his bachelor's degree in finance from Oakland University. A lifelong Detroit Tigers fan, he is an active volunteer at his church.

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Sam Gumma
Wealth Management Consultant
Renee Grimm
Retirement Plan Division Manager
Brandon Kennedy
President, Kennedy Financial Group

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