The Triple Threat to Employer Sponsored Retirement Plans

One of the most dominating eras in sports history was the Chicago Bulls basketball team from 1991 to 1998. Notably, the ’96, ’97 and ’98 seasons were extraordinary as the Chicago “Triple Threat” was in full effect.

Michael Jordan, Scottie Pippen and Dennis Rodman brought a unique blend of talent that was hard to replicate by any other team. Jordan’s ability to score at a high percentage and Pippen and Rodman’s ability to extend plays (rebounds) and create opportunities (assists) to win came together nicely with three straight NBA championships.

Each player had a particular strength and particular role on the team. Their ability to complement each other in terms of their strengths was ultimately what led to their inevitable dynasty.

This isn’t meant to be a lesson on Chicago basketball history, but more about building good teams or strategic partnerships. I happen to work in the retirement plan industry, where our mission is to help Americans save for retirement. If we unpack that statement a little bit more, you will find that there are a lot of moving parts involved in fulfilling that mission.

There are plan advisors who serve as the independent professionals who help plan sponsors choose service providers, assist plan sponsors with fiduciary governance and educate participants on how to best save and invest for the future.

You also have financial institutions who put together an array of investment vehicles and products like target-date mutual funds, separately managed accounts (SMAs), collective investment trusts (CITs), and insurance products to act as the conduits for participant investment choices.

There are also service providers like third party administrators (TPAs), recordkeepers, fiduciary service providers (i.e. 3(21), 3(38), 3(16) providers), independent plan auditors and payroll providers who make sure the plan operates smoothly, stays in compliance with Department of Labor and Internal Revenue Service regulations and ensures participant assets are properly accounted for.

Lastly, you have industry associations like the Plan Sponsor Council of America, the American Society of Pension Professionals and Actuaries, Center for Fiduciary Excellence and the National Association of Plan Advisors who all serve as thought leaders on best practices, lobbyists for our industry on Capitol Hill, and provide educational resources for professionals who are looking to make a career in our industry.

For those advisors who serve as fee-only fiduciaries to their private wealth clients, there is a unique opportunity to spread your value proposition to more Americans who need a financial ally to guide them to a successful retirement via advising employer sponsored plans. There are values inherent in your practice that has already distinguished you from the vast majority of financial professionals:

  1. Clients’ best interests always comes first and foremost
  2. 100% transparency in terms of process and fees
  3. Process rooted in academic evidence and best practices
  4. Independence in terms of who you choose to work with
  5. We are in the business of serving others

As a values-based business, beginning to build your team starts with identifying those who share in those same values. Which financial institutions see eye-to-eye with serving clients and building solutions based on evidence? Which service providers believe in 100% fee transparency, independence, and serving the client’s best interest, not their own?

This is where we have the potential to replicate the Chicago “Triple Threat” in our industry:

  • Fee-Only Fiduciary Advisor (Jordan)
  • Evidence-Based Investment Approach like DFA and Vanguard (Pippen)
  • Independent Service Providers like RPC (Rodman)

By being organizations that share the same values, the strengths that each organization brings to the table can effectively deliver on the ultimate goal….winning 3 straight NBA championships (you get what I’m saying).