Expert Interview: What a Good 401(k) Plan Looks Like
July 27, 2021

Expert Interview: Long Term Care Insurance
November 10, 2020

Adam Torres: Hey, I'd like to welcome you to another episode of Mission Matters. My name is
Adam Torres. You can follow me on Instagram @AskAdamTorres. And to apply to
be a guest on the show, just head on over to and click on,
Be Our Guest, to apply.
All right. So today I have Trey Fairman on the line [00:00:30] and he's Founder
and Senior Consultant over at Waypoint Retirement Advisors. Trey, welcome to
the show.Trey Fairman: Thanks a lot, Adam. Glad to be here.
Adam Torres: All right. Trey, so it's kind of fun for me today. Got two suits on the show and I'm
excited to talk about today's topic, so we'll get into the nuances really of
retirement plans, retirement planning. Specifically, I know there's a lot of
business owners, entrepreneurs and executives out there. They're either in
retirement plans and they're thinking, " [00:01:00] Am I in the correct retirement
plan? Am I offering the right plan for my employees?" And then some people,
they just haven't done a review in a long, long time and now things change and
they maybe are a little bit out of connection there. Or there's other people that
are just saying, "Hey, I'm at that point. I need to set up a retirement plan for my
company." We'll go into a lot of different scenarios there and we'll talk about
some other things and I'm going to have a lot of fun.
The people that have been watching the show for a long time, know my
background as a financial advisor [00:01:30] in the past. I'm excited to go down
memory lane with you today, but just to get us kicked off, I'd like to start with
our, our signature question, if you will. So Trey, we at Mission Matters, we
amplify stories for executives and experts, so that's our mission here. Trey, what
mission matters to you?Trey Fairman: Would say if I really had to kind of peg it, a big concept with us is to be
intentional about [00:02:00] choices. I would say that I'm on a mission to help
employers and their employees, make well informed, proactive, intentional
decisions about their 401k's.Adam Torres: Man. That's awesome. Love bringing these mission-based entrepreneurs and
businesses on the line and introducing them to my audience. Let's just dive right
How'd you get started on this path into financial services and into what you do?
Trey Fairman: I sort of come at retirement [00:02:30] planning from a different angle and you
really got to kind of rewind, I guess. When I graduated from college, I was a
finance major. I always thought I would end up working at a bank. My best job
out of college was a insurance brokerage office. I was the inside salesperson, if
you will. That was back in Philadelphia in 1993. I was basically in charge of
making outbound sales calls. It was the insurance industry, but we were sort of a
nichey company [00:03:00] and we would work a lot with accountants,
attorneys, tax advisors, and sort of approach insurance planning for more of a
tax angle.
My boss got promoted from Philadelphia to run the office in San Diego. He
offered me a job, so moved out to San Diego with my girlfriend at the time, now
my wife. So this was January 95 and you know, I never thought I'd be in the
insurance business.
So, started looking around, went to law school in the evenings, [00:03:30] in San
Diego. Graduated from law school. Passed the bar and that was in 2000. Went
back to law school to get my graduate degree and I was actually at a firm at that
time when we partnered with most of the very large Wall Street firms, private
banks and trust companies, doing more high net worth estate tax planning. If
you kind of think about the world, especially in San Diego, in the turn of the
century in early 2000s, a [00:04:00] lot of wealth was moving there. State taxes
were very archaic, so there was a lot of evolution there. I got lucky, if you will, I
guess. Timed it well and I had a pretty good run with that.
Up until geez, about 2016, I guess, that was my job. I, again, partnered with
advisors working with very high net worth clients, to help them with
sophisticated estate tax planning strategies [00:04:30] and it all really changed
for me in the spring of 2016.
I had just finished speaking at the National Conference for the American Medical
Association, to a bunch of doctors in Orlando, Florida. I was out in the lobby
grabbing some coffee and in rapid fire, about 10 or so doctors came up to me
and every single one of them had a what's called Safe Harbor 401k plan. So
again, I've always thought of myself as a tax [00:05:00] planner. I had dabbled
and done a little bit of that stuff in the past and as I just said, over that 15, 20
years before, I had sold my business to a publicly traded firms and worked with a
lot of again, tax attorneys for that, worked with a lot of business owners, and by
partnering with advisors, accountants, I understood that plain vanilla probably
doesn't work all the time.
So here I had all these doctors. They each owned a dialysis center [00:05:30] or
surgery center. They were making 700,000, a million dollars a year, and they all
had a Safe Harbor 401k plan, which means in plain English, they could save about
$59,000. II said to every one of them, I said, "Hey, if you could save more, would
you?" Right. So the back of the envelope, rule of thumb, as you need to save
about 10% of your pre-tax income. They all said, "Geez. Straight, yeah. I would
love to but my investment advisor says, I can't. My accountant says I'm not able
And I said, " [00:06:00] Well, no, actually you can." And I remember vividly their
faces, as I said, "Look, if we do this properly, you can put away about $240,000 a
year, maybe double that." So that was kind of a big experience. I call that a eye-
opening watershed event for me where it was very puzzling to me. I said, "Wow,
these are educated people. They're paying for financial advice and they're really
not getting the complete [00:06:30] picture."
So again, this was in the spring of 2016. When I got back from that trip, like I do, I
have which we'll touch on later, but I have a side hustle I call, up being a expert
witness in financial litigation matters, which means I'm really good at reading a
bunch of stuff and researching ideas.
So anyway, jumped right into that and basically what I learned is that most
advisors and most clients are just offered the same generic cookie cutter plan.
[00:07:00] Heck, if it's anything outside of the box, people are like, "I don't know
what to do." It was again curious, because what I was talking about, which is a
pretty standard 401k profit sharing cash balance, what we call a combo plan,
works much like a cascading waterfall, if you will. So you fill one bucket up. You
go to the profit sharing bucket. You fill that up. Then you go to the cash balance
bucket. You fill that up. Those plans had been around for a long time.
I know you and I joked [00:07:30] before, the Pension Protection Act of 2006,
changed a lot of that and it was not a secret what was going on. But so again, I
jumped into that, did all the research, I could talk to as many contacts as I had in
the investment industry, and basically kind of confirmed what I saw, which is
there was just a big need in that area.
So, at the same time, state tax laws were getting [00:08:00] better, meaning
more and more liberal, so less and less people needed state tax planning and I
had found myself doing more and more income tax planning. As a result, I just
kind of started focusing more on this, ramped it up and had great timing.
Launched in January 2020, Waypoint, so full time 401k advisor during the
shutdown but things have been good.
I [00:08:30] would say quickly here, I just try to focus on, because this was my
experience, what a good plan looks like, because it was always very interesting
to me and I actually have a book that I'm going to be putting out here next few
weeks, that looks at the six key components of a good 401k plan because it's
again, not rocket science but when I was doing the research, I asked, "What does
a good plan look like?" And you get some fluffy answers [00:09:00] but you're
like, that's not very actionable for me.
Again, I kind of came at this from a different angle, more of a sort of fiduciary
oversight plan governance concept and mutual funds are the easiest part of this
conversation. We would say there's actually six key components, but the
industry as a whole, just had said, "Yeah, I'm a investment advisor, so I know a
heck of a lot about 401k plans too," or business owners just [00:09:30] assumed
that was the case.Adam Torres: That's a great... It's a great story and one thing for everybody watching to know,
so when it comes to financial services, it's complex. I was in the business almost
14 years and I had the privilege of working on both sides of the business. There's
the institutional side and then there's the retail side.
The retail side is your everyday advisor that's working face-to-face with the
client. The institutional side is a little bit more complex. It has to [00:10:00] do
with retirement plans, retirement plan construction, and it's just a little bit more
complex. You're dealing with bigger numbers. You're dealing with a different set
of clients. So, one of the big challenges in the industry and what Trey is
explained, is that he has these group of doctors that were working with their
advisor. Doesn't mean they had a bad advisor, to be very clear. Their advisor
means well. They're doing their best work.
But if they're not experienced with a little bit more of a complex retirement
planning [00:10:30] philosophy, which for Trey is easy. He says, it's easy. Oh, it's
just, it's common. It's this type of plan and this is what you do and you fill up
different buckets. That's great. But if you'd only been on the retail side of the
business, working with clients face-to-face, you wouldn't know that because it's
very complex and the paperwork and the documentation and everything. It's not
hard when you're working with somebody like Trey or his firm, because they're
doing it day in and day out, but they are specialists, so that's the point, so there
are different options out there, and there's even options above that, which Trey
I'm [00:11:00] sure is aware of in terms of even more complex planning
strategies that have to do with other things that are probably a little bit more in
depth than this conversation will go today. That being said, don't worry at the
end, I'll give Trey the opportunity to leave the contact information and that stuff,
if you want to follow up. So, don't worry about that.
That's the main thing. It's more systemic. It has more to do with how the
industry is set up overall. It doesn't mean that the firm is trying to do a bad job,
or the advisor is trying [00:11:30] to do a bad job, or anything like that, or vice
versa. It's just that there's so many products, so many different routes a person
can go, that there's not even a clear, concise, like unified answer on even what a
financial advisor is, or what their scope of being a financial advisor is. So, you
have to think about the US and the financial system as a whole, really as an
evolution. What a financial advisor did in the seventies or sixties, guess what?
There was no such thing the term wasn't made up yet. [00:12:00] That just gives
you an idea of the evolution of it and of wealth management and what even
wealth management is.
These are just different things that I'm giving you so that as you kind of progress
through your financial career or your financial situation, you really consider the
different types of people that you're bringing into your life and that you're
getting your advice from because there is a difference and these can make
substantial differences.
So for example, that doctor example that Trey used, they [00:12:30] were doing
what 56,000 or so in there, so they were saving or deferring depending on how
things are set up, 20 some thousand in taxes, depending again, on how they're
set up and I'm rounding here. So, go. You have to consult your own financial
advisor to be clear in your own compliance in this. I'm not putting words into
Trey's mouth. I'm just giving you some simple math to consider.
Well, if he's got them in a type of plan where they can put away 260,000, or in
that area or range, now they're saving or deferring [00:13:00] upwards of
100,000 versus 25,000. Again, I'm rounding and I'm doing some very simple
math, so don't anybody watching this start commenting on the videos, "Oh,
Adam, it's this. It's this." I know. Okay. It's fine. I just want you to start thinking
that in general, there's a big difference from deferring 25,000 to 100,000. That's
a big difference in a tax bill, anyway, you split it, so just throwing that out there.
Trey Fairman: Then if I can jump in a quick second. Then the other thing I get, sort of the
pushback is, "Well, I have [00:13:30] to put money aside for my employees." And
the answer is yes, you do. But again, with the rule of thumbs, so I'm a big
believer in what I call the back of the envelope. The rule of thumb is six to 8%
your employees annual income. So, to go to from 59,000 to 260 or 300, it's going
to cost you, depending on your employees, an extra 40,000 a year. That may
make tons of sense. It may make no sense, so back to kind [00:14:00] of what we
said in the beginning. Let's try to focus on making well informed, intentional
decisions and it is definitely not right for everybody but it fits.
Again, I mean, really the other kind of tagline, if you will, that I use all the time is
look, the retirement plan industry has evolved from a casual investment
conversation to a much more regulated fiduciary oversight process and that
doesn't mean you need to be scared of anything, but it's just changing.
[00:14:30] So just like you said, Adam, I think that's a great point that, Hey, just
like we do a lot of things in life, let's just check on it, make sure things are going
well, and maybe you're all set up. We can do better sometimes too.
Adam Torres: Let's go further into Waypoint Retirement Advisor. So have to ask you the
question. Why start another retirement planning firm for, for employers for
complex or even retirement plans? What's your vision?Trey Fairman: Well, again, I would say that, so kind of two things. [00:15:00] So again, I was
working with Wall Street firms in the investment advisors for these 20 some odd
years. I was very familiar with how those conversations went. I then had that
personal experience and then on top of that, and this will probably hit home
with you also, all I kind of heard was 401k plans are all about what are called
funds and fees, these two things.
Again, as I [00:15:30] just alluded to, the reality is the world's changing and that's
good. So really here, what's next for us, as I mentioned is I'm just kind of putting
the final touches on a book here. We would say that a good plan has six key
We've talked about funds and fees. We would call that the investment options
and then the plan costs. But then there are kind of four other areas too, which
would be fiduciary oversight, plan design and tax [00:16:00] strategy, which we
chatted about. Plan operations and then educational programs. I think kind of
what's next, we call that our six or Retirement Six Process. Just to name a made
up. It's not again, rocket science or anything genius, but just helping people
understand what a good plan looks like and then helping them kind of start on
the path, because I think long, long gone are the, call me when you need me
retirement [00:16:30] plan advisors. Who again, that is not their focus. They are
well meaning and they step in to help when they're asked.
But again, because of a lot of different factors, structuring these, these ERISA
plans, 401k clearly, and we see that bleeding over to other areas, It's called
4O3(b) space, just again, making well inform intentional decisions or choices
about what you have and sometimes not changing it all is [00:17:00] the best
decision to make.Adam Torres: Let's talk a little bit more about your user experience, if you will, and what it's
like to work with you and your firm, like what it looks like. Because a lot of times
people, they accept the status quo of either what they're already doing, just
because they're used to. It's comfortable and they're like, do I really... It was
hard enough setting this thing up in the first place I had to deal with this many
meetings and this and this. I'll think about it later. I'll get to it later. That's, in my
opinion, what keeps most employers, myself [00:17:30] included, even though
now I'm on the other side of the coin, like I should be reviewing things, from
doing it. You're just busy and you're thinking about like, do I have time to do this,
this and this? I mean, what does that look like to you?Trey Fairman: Yeah. So again, that was another kind of interesting thing. When I got started
talking to employers, becoming part of the RFP process, going out to bid which a
plan should be doing every two to three years. So again, [00:18:00] story. This
was actually my first 403(b) plan. Again, a 403(b) is just like a 401k, but for non-
profit organizations.
I was kind of late into this conversation. I, in fact, was the fourth advisor. I had
been referred to the business manager at this private school. We were just
talking like we were. This again is really all about goals and kind of what's broken
or where do you want to get to. [00:18:30] She said to me, "Well, look, Trey, we
don't want to move platforms." Which would be called the record keeper. So
when it comes to a 401k plan, the easiest, most visible party is the company that
has the website, sends out the statements. That's called the record people.
I said to her and I chuckled and I said, "What are you talking about? No one's
saying you need to leave the record keeper. I can help you. I can [00:19:00] get
in. If you sign a form or two, I can become the advisor on the plan and then do
what I call, fix the plan from the inside out." Because most plans have access to
good investment, have access to low fees, have access to what they need.
Maybe not to become a really good plan, but to dramatically improve.
So, what I kind of ran across was, which is what I used to say to my boys, don't
create chaos. [00:19:30] If we're going to try to help you and fix this, I have no
idea why I would come in and the first thing that I'm trying to get you to do is
massively disruptive and chaotic. It's let's not do that. Let me get in under the
hood. Let me get out in front of your employees, make sure they understand
what a great thing you, the employer are doing, so kind of put the employer in
the best light. It'll take me 30, 45 days to kind of get out of the hood and figure
out what's going [00:20:00] on. Then come back to the employer and say, "Hey,
if I was you, I would do this, this and this." That's usually not complicated. It's not
difficult and you can do it at the record keeper.
So we've strongly discouraged again, create the chaos. Now, interestingly, and
I've got two of them now. They'll push back really hard. I want to get out of here
and one of them we were just chatting with last week was at a record keeper
that was a very large insurance company, which [00:20:30] is a lot of those
insurance companies are kind of old school technology. That insurance company
had just sold their whole retirement, their whole retirement plan business to a
new cloud based record keeping, so their problem actually already got fixed and
they were trying to convince me they wanted to change as of January 1st coming
up 2022.
I said, "I'm a little bit at a disadvantage because I don't know your company and I
don't understand [00:21:00] what your goals are." This is only the second
conversation. I said, "But I got to tell you, I think most of your problems already
got fixed." And then contrast that to their current advisor and the other advisor
they had talked to were like, you got to switch.
And I said, "Look, I'm not going to tell you that switching won't help you, but if I
met you on the sidewalk and you said, what's the best record keeper for a 401k
plan, the answer I would've given you is where you are now."
So [00:21:30] again, just kind of thinking about, again, the other phrase that we
use a lot is, pause and hit rewind, where you see a lot of people and this is true
in many areas in the world. People jumping in. They want to talk about
themselves, their accolades and whatever product they're selling. We would say,
and I firmly believe that it's not about me and I'm happy to tell you all about my
background, but that's not important. What's important is to listen [00:22:00]
and we actually use cards.
We actually, so that six key component list that I read to you, we actually have
six cards that if we're doing a Zoom call or we're sitting in front of a CFO, for
instance, we actually put those on the desk and we have them kind of order
them or we talk about each one and it kind of helps walk through the process of
what their good plan looks like. Because for me to show up and jump right in and
say, "Oh, this [00:22:30] is what I think you should do or just because you're
unhappy, you need to create chaos," I don't think serves anyone well and
definitely doesn't serve at the employees well.
So again, trying to create the win-win, it's pause. Hit rewind and let me just listen
because I'm not the oldest guy in the world, but my crystal ball broke a long, long
time ago and I'm not going to assume that what I think makes... [00:23:00] Even
if I maybe, like you two Adam, when you do this long enough, you kind of know
what the best solution is, but more times than not when I keep my mouth shut,
I'm wrong and that's okay. I mean, that's really, I think the other eye-opener, if
you will, is just kind of, let's just pause here and just talk about it and then figure
Now COVID and the pandemic and a lot of other things in the world, sometimes
[00:23:30] that's hard to do. [inaudible 00:23:33] But that really goes a very long
way when you're thinking about again what a good plan looks like.
Adam Torres: No, that's great and a great point you bring up about the record keeper, not
having to change it. So that means and that'd be a big thing. Some people are
like, "Oh, but I love my Vanguard. I love my Charles Schwab. I love my Fidelity."
What it means is that you can keep your company and Trey can, and his team
can many times be a record keeper, or be an advisor [00:24:00] on the plan so
you don't have to necessarily move it. I mean, that's a great, great point that you
make because I think that's another big, big deal for many employers when
they're thinking about whether they're going to work with different companies
or if they're going to get their plan reevaluated.
Tell me a little bit more about like the employee education side because that's
another part that I just feel is so crucial to just that overall relationship. And by
the way, I don't mean just the relationship between the plan and the advisor. I
mean between [00:24:30] kind of taking off some of the weight off the shoulders
of the employer and the employee, because that can be a lot. You don't want
your employee going to you for every question. I mean that's more time and
more things that you have to, nor even on to your HR department, if need be.
You want to have that correct relationship to where their needs are getting met
and it's taking the weight off of your shoulders.Trey Fairman: Right. So we're going to talk about education programs. Before I jump into that,
I'll say that almost gets there's there's a lot [00:25:00] of overlap here. That gets
to plan design too, because really the goal becomes matching the demographics
of the company with the plan design and the record keeper.
If you have a bunch of 25 year old young employees, we're going where you
should ultimately be a record keeper that has a great mobile platform.Adam Torres: Yep.
Trey Fairman: Again, sort of like what I was talking about earlier. That's typically not aninsurance company.Adam Torres: Yeah.
Trey Fairman: So, that's one. But when it comes to actual education, [00:25:30] we actually
have two tracks. We do employee education, which pretty much record keepers
do that as a generic offering, which has some technical reason why. We don't
manage individual money, so it's not like I'm trying to solicit them for their
outside money.
But that goal becomes understanding basic investment concepts, investment
education, how the plan [00:26:00] works. As you mentioned, what mutual funds
are good, how to analyze the funds, what a target date fund is, which is a newer
thing in the world. So, that's that.
Then we go above and beyond for the employees in what's called a Financial
Wellness Offering, if that employer would like. We have solutions that aren't tied
to any record keeping platform. So again, typically employee education is
provided by the record keeping platform. [00:26:30] Advisors sometimes do it,
but it's often the record keeper
So if the record keeper has a generic program, which many of them do just
because they're not in that education business, there are third parties out there
that we can plug and play into that. What's great about that is, as we all know,
when you're in a group of your peers and you have a question maybe concerned
about asking this stupid question, so you don't really ask. Even one-on-one with
employees, [00:27:00] like I said, I can't always pause and listen and really get to
the meat of the matter. What's good about these financial wellness programs
are a lot of them have tens and tens of hours of online videos. They've got self-
paced education programs. They have a toll-free number that you can call and
they really, mean the better ones, actually integrate with the company's
employee benefits package.
So when enrollment comes up, just like you were saying, [00:27:30] as opposed
to those employees having to call the HR director or in his or her office, which of
course they're very happy to help their employees.Adam Torres: Of course.
Trey Fairman: This is another way that on Saturday, we've all been there. Or Friday night, in
your PJ's on the couch, you're like, "Oh, this question just popped into my head.
How do I find this out?" So, that would be employee track.
Then we do a employer track, which kind of helps them again, also understand
[00:28:00] what a good plan looks like. They're participating in the plan, so
they're going to get all that same employee education too, but really
understanding, again, this sounds basic sometimes, but I still see it. What the
difference is between the record keeper and the administrator. Sometimes the
record keeping company, Vanguard, Fidelity, whoever they may also be acting as
the administrator. So we sort of talk about that. There are advantages [00:28:30]
to do that. Sometimes we unbundle it, it's called, and we put that with a third
party to do that.
Then we just talk about, Hey, most, and this, I guess is one of the pet peeves of
mine. You have a lot of advisors that start out that play the fear card, I call it. I
got a quick [inaudible 00:28:51] on that in just a second. But they're calling
employers saying you don't have a ERISA bot. Well, the reality of that is it's a $
[00:29:00] 50 fix. It's not a problem. Let's fix it. But of course they're not there to
help them fix the problem. They're there to scare them to get in, to create the
chaos, to move the plant to a different record keeper.
We help employers understand what a good plan looks like. The fact that at least
one of them is a fiduciary, meaning they've got some specific, not burdensome,
but specific tasks. And again, as I said in the beginning, don't be scared of your
own shadow. [00:29:30] There are ways that we can do that. And then, we
would say, so whenever we're working with a plan, we're engaging as what's
called a 3(21) fiduciary, which is the ERISA code section. But we, I would say the
way I explain it is I sit next to that employer on the same side of the table as
them, helping them understand what a good plan looks like and making sure
everything is on track. And again, that conversation is a newer type of
conversation because again, as a [00:30:00] old school, casual investment
conversation, call me when you need me, to a much more regulated, fiduciary
oversight process and employers like that. And frankly, successful ones are going
to find out sooner or later because when they get a hundred employees in their
plan, it's going to get audited and all the things.
I just had that experience too, where an employer was trying to stay under that,
so the old CFO had, I think it was three plans to keep the count under a hundred
of each [00:30:30] plan and then new CFO comes in and of course says, "Well,
this isn't going to work." They aggregate it and low and behold, they had not
done just a lot of the basic fiduciary oversight tasks that they needed to be
doing, not just from yesterday, but from years and years ago.
Now, was it a huge problem? No, not at all. So again, that's where that whole
fear card gets played a lot and just a quick example on that. One of our clients
that [00:31:00] most plans have what are called target date funds, which are do
it for me type of fund. We don't need to go into the details, but they're very
common. They're not perfect by any stretch.Adam Torres: Sure.
Trey Fairman: Most plans aren't either, but that's okay. It's not okay, but that's okay. So we're
watching it. We're going to help them. Just happened to be on the phone with
this employer who was pretty upset because they just got a cold call basically
from an advisor that said, "Your target [00:31:30] date fund family is part of this
lawsuit." That's obviously bad news. It had just been filed like the day before, so
of course they were on our list to call too. But the reality of that situation is, that
lawsuit like many ERISA lawsuits over the past 15 years, every single target date,
fund family was named in the lawsuit.
It's not just the bad apple. It was again, somebody calling, playing the fear card,
[00:32:00] rattling ages, creating chaos and saying, "Oh, hold on a second."
Nobody likes that news. I get it. Here's how we already monitor that and so
benchmarking and we probably going to chat on that a little bit, but you know,
we're constantly watching these things and that's what a advisor helps with
these days, understanding what a good plan looks like.And if that fund family
doesn't work because it's named in the lawsuit and we got to switch, great. But
the top 10 fund families, they were all named.
Adam Torres: That's [00:32:30] a lot of money. Trillions of dollars.
Trey Fairman: Right. Yeah. And it's not going away.
Adam Torres: No.
Trey Fairman: Is it perfect? No, absolutely not. It's not perfect. But it's like, I don't know where
you'd like to go. We can not have a target date fund family offering, but again, all
the big plans have them and I think it's a good idea.
Again, that's the well informed, intentional choices that we help employers with.
Adam Torres: So, tell me what it looks like because I know there's some people watching
[00:33:00] this right now that they're like, maybe they haven't been doing
exactly what they need to be doing in terms of the compliance end of reviewing
their plan. Maybe they haven't. They're not even familiar with things like
benchmarking, per se, or they're like getting bigger and a bigger plan and they're
kind of like, okay, they need to start paying more attention to this, so to speak.
Do you offer, like what do you offer? What does it look like to start the process
of seeing if it makes sense to work with you? Do you offer like an audit? Do you
offer like a review? What's your terminology [00:33:30] for how you help a plan
evaluate what they're doing, in order to maybe see if it makes sense to work
with you and your team?Trey Fairman: Yeah. I would say again, we're a little bit unique in this, so we come at this from
the different angle. The first conversation is very much usually a 20 or 30 minute
chat, which is kind of what's going on in the industry, our beliefs which is what
we talked about. There are really six key components yeah. Of what a good plan
looks like. [00:34:00] And then, we would then sort of go to the next part of that
conversation, which is what's important to you. That's the pause rewind. Some
people are like, "Yeah, yeah, yeah, yeah. I just need someone to check my plan."
I would say, "Okay." We do have that and I would call that benchmarking light,
which is a, again, just looking at the funds and fees. I mean, we actually, we are
constantly benchmarking our plans and we actually [00:34:30] have four
different levels of benchmarking.
The initial one is the benchmarking light, kind of the quick look. Show me what
your funds are doing performance wise, relative to their peers because that's
important and what are the costs relative to... So, it's not just, is it expensive or
not expensive? You have to always consider costs, are they reasonable, which is,
what's the benefit for that cost? So, that would be one option that [00:35:00]
kind of quick benchmarking light.
And then again, employers should put that in their file because they really
should be benchmarking every, we would say every two or three years. But our
model then for onboarding is we do quarterly video statements, which is a
benchmarking of the funds as a performance for the whole plan and then we
have, what's called a plan analysis and review or what we call PAR Report every
12 months, which is a more detailed [00:35:30] benchmarking, looking at
participation rates, bells and whistles, if you will. Plugins to what the modern
trends are. What you should be thinking about, like target date funds was an
example and those came out, that's a really good thing.
Then every two years, so still got the quick hit. We've got the quarterly. Got the
PAR every year. And then every two to three years, so 24 to 36 month,s we're
doing what's called a live bid [00:36:00] benchmarking, which we're actually
taking that specific plan, their specific data, and we're going out into the market
and we're not only rebidding it at their current record keeper, which [inaudible
00:36:14] earth shattering. Why would people really do it? Well of course I'm
going back to them cause they need to know.Adam Torres: Of course.
Trey Fairman: I'm talking to five or six other ones. Then we're doing that too. I would say that
as a general rule of thumb, the person in charge [00:36:30] of a plan needs to be
following what's called a prudent process. What does that mean? And I walk
through that in my book.
But what that means is you just need to be acting reasonably. So the answer to
that question is every two to three years, you need to take a look under the
hood and see what's going on.Adam Torres: Yeah.
Trey Fairman: Is a good plan check in a lot more than that? Absolutely. Like I said, we're doing it
quarterly. We do it annually. And then, then we're doing the live bid, real deal,
every [00:37:00] 20 to 36 months.Adam Torres: This is awesome, Trey. Well, I have to tell you, I can talk retirement planning all
day long. It's one of my favorite things. I'm just a retirement plan nerd. It's fun to
me. Everybody watching this already knows, I get a retirement planner on here,
it's going to be game time.
So Trey, that being said, though, if somebody's watching this right now, they're
an employer, they want to review, they want to think about if some of those
benchmarking concepts you mentioned, if they're not doing those, if a lot of the
things that we talked about just kind [00:37:30] of have sparked their interest,
what's the best way for people to follow up and to connect with you and your
team.Trey Fairman: I would say two ways and the second one's probably more helpful. So first is
LinkedIn. I'm on LinkedIn. Try to be as active as I can be there. So articles,
postings there. You can read more about my background ,sort of who I am, what
I'm trying to do here.
Then the other one would [00:38:00] be go to the website. So, G-
O-O-D-P-L-A-N, all one word, info, which is a site that I have where I share
monthly best practices about, again what a good plan looks like. That's a place
you can sign up. Two, maybe three times a month, sometimes one time a month,
there'll be a article that I think interesting. I typically write all [00:38:30] of the
Adam Torres: Awesome.
Trey Fairman: If everything I've said today sounds like I'm a total knucklehead, then you
probably don't want to sign up for that. If it's interesting, then yeah, you can do
that for sure. That would be probably the other site and generally that's what we
would do with most people that we run into. So look, sign up for that. Hopefully
that helps. I mean look, plans really change statistically, only about 8% of plans
change every year, so it's not a lot of them. [00:39:00] There's good reasons for
that and bad reasons for that.
So really my concept and my thought at this is I've got, as we've sort of talked
about, a lot of diversified, broad experiences over the years, working with banks,
trust companies, investment advisors. So that kind of puts me, I think, in a
somewhat unique spot, to kind of share themes and trends that I've seen along
the way. And I've again, because I like to write and I kind of research because I'm
a geek that way too, [00:39:30] I've sort of collected all those. So that website is where you can see all that stuff.Adam Torres: Fantastic. Well, Trey, I have to say, it's definitely been a pleasure having you on
the show today and really enjoyed our conversation and you bringing your
expertise to my audience and really giving us an overview of the entire
retirement plan landscape and what employers should be thinking about as they
watch this.
And to the audience, as always, thank you for tuning in. Hope you got a lot of
value [00:40:00] out of this. Hope you learned a lot. If you did, don't forget,
especially if you're a first time listener or viewer, hit that subscribe button. We
definitely want you to be a return visitor and a return guest. And Trey, thanks
again. It's really been a pleasure.Trey Fairman: Thank you. I've had a ton of fun. It's been great. Thanks.