Don’t let retirement-plan market jargon intimidate you. Rick Unser, partner and managing director at Creative Planning, returned to the podcast to teach us how to speak 401(k) to capitalize on this growth opportunity.

Rick Unser is not affiliated with Hartford Funds

Hey, Julie, you know, today on the podcast, we’re going to talk about jargon. We’re going to talk about how to speak 401K with your clients. But when it comes to jargon, I’ll tell you, whenever my kids call me to go and stop at a coffee shop and order them a coffee, it’s not that simple. Right. I don’t drink coffee personally, but it’s like a whole nother language. Not only the type of coffee, but even the cup. You have to get it in. I’m like small, medium and large. That doesn’t exist anymore. It’s almost like I don’t even know how to communicate. I know you’re from the Seattle area, so you must be an expert.

I have had a little bit of practice in ordering Starbucks. Yes. And and don’t ever say small or medium large. It’s short, tall, ground and venti. Let’s get it right here. Come on, now. You’re the person in line in front of me. I might actually have you say, sirs, please step aside. Let me order for you. This is too painful. So I’m very excited if that, ever, about the actual jargon that we can learn.

I was going to say, if that ever happens, please ask me to step aside. But why don’t you share with everybody who our guest is today? Give me a little bit of Rick’s background.

Rick Unser is a partner and managing director in Creative Planning’s retirement practice. Creative Planning Team is a registered investment advisory firm that manages or advises on more than 225 billion in assets and serves clients in all 50 states. All opinions expressed by Rick are solely his own and do not represent the opinion of creative planning. Rick has over 20 years of experience working with retirement plans and has a unique depth of knowledge around plan investments, fees, design and employee outcomes. Rick is also the creator and host of the 401k Fridays podcast. He has released over 250 episodes featuring topical interviews with influential guests from around the retirement industry and multiple employers and plan sponsors. When not working or hosting his podcast, he is a proud husband and father of three who tries to squeeze in a round of golf whenever he can.

So Julie, let’s let everybody in on how Rick Unser taught you and I how to speak for one K with our clients. Hi, I’mJohn.

and I’m Julie.

We’re the hosts of the Hartford Funds Human Centric Investing Podcast.

Every other week, we’re talking with inspiring thought leaders to hear their best ideas for how you can transform your relationships with your clients.

Let’s go.

Thank you so much for joining us for the Human Centric Investing Podcast, Rick. Welcome.

Yeah. Thank you so much for having me.

Rick, thanks again for joining us. And you know, the title of our podcast today is How to Speak 401K with Your Clients. I was joking with Julie earlier that it’s kind of like sending me into a Starbucks to order a coffee where I feel like after learning an entirely new language and you know, sometimes when we start talking about fiduciary and funding arrangements and so on and so forth, it starts to get confusing. But where I wanted to start are just with some of the basic roles in the plan business. Like sometimes people will throw out the title

record keeper or TPA, sometimes a consultant. Can you kind of review some of these players and tell us what a record keeper actually does or a TPA actually does and and what resource they offer the financial professional?

Absolutely. And I’m with you on the jargon and in the language. And one of the features that I do on my podcast from Time for time is an episode where I get together with a friend and we we call it jumbled gibberish or jargon. And it’s, you know, there’s so many little words and so many in acronyms. It’s like, are they pulling my leg here? Or is that really something that exists in the world before? Okay. So if believe me, you’re not the only one that that season recognizes just the crazy dialect that’s out there in the world, the 401k plans. But more specifically, if you look at the let’s call it the ecosystem of who’s involved in 401k plans of the first one that most people tend to start with and is usually, you know, there’s brands and companies that you’ll recognize is that record keeper role. And as I like to try to explain it, the record keeper is really the participant facing resource or the employee facing resource in the world of 401k. So it’s some of the big names like the Fidelity’s The Vanguard, the Schwab’s T, Rowe Price, all the way down to a bunch of more local or regional firms that you’ve probably never heard of, but that doesn’t make them make them bad or inferior in any way. So again, that record keeper, they’re really doing that, all that participant level interaction. So you’re going to their website. They’re the one who’s they have a call center, they’re producing the statements somebody needs to change investments or take a loan or a distribution. They’re handling all of that work. And again, they’re the record keeper side of it. There’s a there’s some additional elements to it. But really that that core record keeping

this podcast that there could be the consultant or the broker, the advisor. There’s a lot of different words that that people will identify themselves as or will go by out in the marketplace, or, quite frankly, that the employee or what we refer to them as, a lot of it just depends on, you know, probably their experience or what they might be comfortable with. But that’s kind of the third leg in that retirement ecosystem is a financial professional that is working alongside of the of the client of the business and interacting in some way, shape or form with a record keeper or third party administrator, either on an annual or periodic basis based on where they want to add value in the in the given process.

Well, my my mind is spinning with all of that nomenclature. And I appreciate that education. I think it’s so, so helpful just in wrapping our minds around all of the different roles

and key players. For a financial professional that is really interested in this and just doesn’t feel proficient in speaking 401k as we’ve titled this podcast, what would be some initial resources or some areas that you would encourage a financial professional to tap into just to to begin to sort of practice and wrap their own mind around all of these moving parts.

Yeah. I mean, I’ll tell you what I did, and I think it probably still holds true today. And your your wholesalers out in the marketplace are just tremendous resources. And and it might not be you might not be able to figure this out in one phone call. But I think if you have a trusted wholesaler that you work with, I would talk to them, find out who they’re 401k expert or who they’re 401K or what we would call some sorry, some more in acronyms here. Defined contribution or D.C. specialists might be in your in your given market and really give them a call, get on the phone, get on a zoom, whatever it might be, and just start to kind of ask questions or pick their brain. Most people that I come across that they want to teach, they want to help people understand. They’re excited to help more people understand how the world of 401k or 403(b), how that how that works. How that functions. Also those those DC specialists, oftentimes they’re going to know people in your local market. So one of the one of the biggest things that helped me along the way was I found an amazing local third party administrator who just was willing to take me under her wing and just get on phone calls with me. Answer calls, texts, emails, all sorts of crazy questions that I had, some of them very rudimentary and basic, like, why do you have to do discrimination testing to, you know, much more complex topics around this company acquired another company and they have different matching scenarios and they want to integrate that. They want to keep it a separate as long as they can. What do we do? You know, so all sorts of these things are part and parcel to what those third party administrators are very well equipped to handle. And again, they’re very passionate. Most of them are very passionate business owners who want to teach and want to see people share in that passion. So I think if you are willing and interested getting into this business and or just having a bigger role in your clients, the way that they look at their their workplace retirement plans, find that D.C. specialist, find a local third party administrator. And believe me, they would be will be more than happy to help you, help teach you the ropes. And then

from there, it’ll kind of be what you make of it. And it might just be enough to have a kind of a passing knowledge of what’s going on so that you can be that proverbial fly on the wall and help in an advisory capacity to help your client make great decisions. Or maybe this is something where you you find a passion and you want to become a subject matter expert, and that takes you down a completely different path. So lots of resources out there, but it just starts with one or two phone calls and a willingness to learn.

Rick, when it comes more specific to the questions around investing, I know this is an area where we often find a lot of jargon. It seems like instead of letters, all of a sudden we’re getting numbers like 321 and but more recently, hearing things about clients wanting to hold Bitcoin are talking about the role of ESG or default investment options, things like that. How should I as an as a professional that yeah, I haven’t done a lot of plan business, but how do I think about these things as they come at me and the resources you mentioned? Are they the place to turn for these kind of answers or this kind of education?

I think so. When it comes to investing, I would really look at it probably three places. One would be, you know, whoever your own internal. Broker dealer or registered investment advisor might be depending upon their size or their scope of what they’re doing in the in that 401k space, there might be some white papers, there might be some other information that’s available that would have some topics or would address some of those topics that you were just asking about the second space, the DC specialist, as I mentioned. One of the key things that they bring to the to the market is not just that sort of knowledge that you can learn over a phone call or just a zoom call or by attending a webinar that they might have. But also they have a lot of people internally that are putting out position papers, white papers that are that are speaking or doing or providing other free educational input to help you understand, well, okay, can I have

Bitcoin in a 401k plan or would it make sense for a client to pursue an ESG strategy? And what does that look like? What does the DOL think about that? What how are some of the fiduciary worlds and lawsuits that are going on out there? How are they thinking about ESG or targeting ESG? Private equity for that matter, whatever it might be. There’s so much great information out there that, again, if you as I say, just ask the Google, they will. It’ll spit a lot of information out. But if you’re not quite sure what you’re looking at there, then your DC specialists, they can help you interpret. And then the third area I think is there are so many attorneys that specialize in the world of 401k plans and the specific an acronym for those attorneys are ERISA attorneys, ERISA. So that’s the body of laws, the federal body of laws that govern workplace retirement plans. And so many of these are ERISA attorneys you can find. They have they’re putting out great thought papers. They’re putting out great information into the marketplace, trying to help clients and committees and advisors and other people that are struggling with these very decisions. They’re trying to put out some of their thoughts into the universe on what what you should be thinking about as you’re considering some of these different investment investment topics, or you’re struggling with what to do in a particular a particular area.

You know, it’s interesting, right, because I hear you explain all of these pieces and parts and how they fit together. I’m curious, as a plan gets larger, what starts to change in terms of the structure or the key players? Or does it? I guess I’m being a novice at this and learning the language today. I’d be curious about your thoughts on what changes as plans grow.

Yeah, it’s sort of like sort of like watching kids get get bigger. Right. And they their their needs are going to change and evolve. And sometimes they’re predictable, sometimes they’re not. But what what we see is let’s just start with kind of a small plan. A lot of times just in this day and age and in this the way the market is today, a lot of times those small plans are going to have a record keeper. They’re going to have that third party local, third party administrator doing a lot of the the compliance work, the plan design work. And you’ll have a financial professional sort of attached to them. And then over time, as that plan grows, assets come in, maybe complexity increases, sometimes a lot grow those relationships and they might need a new record keeper.

They might move from an unbundled to a bundled service model, which means that they’re sort of combining that record keeper and third party administrator role. Once a plan gets to enough head count, about 120 employees or higher again. Kind of rough guidance there. They’ll need an audit. So you have to have an independent third party that comes in and audits the financials of the plan every year. As you kind of move, you continue to move upmarket. Then you’re going to start to see attorneys working a little more closely with plans just because the stakes get a little higher in terms of the risk, you know, as plan assets go from maybe a few hundred thousand to a few million to 50 million, 100 million and up. That’s really where you start to see some of the class action attorneys get a little more interested in retirement plans. And that’s where, again, you have a lot of those employers who are going to look for that guidance and support from an independent ERISA attorney also is depending upon the complexity of the company, there can be other consultants that are that are working that might not necessarily be directly advising the 401K, but you have compensation consultants or equity consultants or benefits consultants that are working with companies on broader, more holistic strategies that the 401k needs to fit into. So it definitely evolves and grows, but I wouldn’t let any of that really intimidate you. I would say that for the for the time being, just kind of find what area of the market you’re comfortable in. And as we talked about in the last episode, kind of where you feel like you can add value or solve problems. And over time, what you’ll what you’ll find is that you’ll kind of find that niche where you serve the best, and then you’ll be able to grow with that asset as the plans grow and as the needs of your client grow.

And Rick, that was the nature of my next question for you, which is, you know, we talked about jargon today, and it seems everybody speaks kind of the same jargon. And oftentimes I hear people say, look, when it comes to the plan business, don’t just go and do the same thing everybody else does. Right. Fees, funds and fiduciary. But question, Rick Unser is, given that that part of the business seems somewhat commoditized, where do you see the

opportunity as a financial advisor to differentiate yourself from the offerings that another advisor may be bringing? Where’s the opportunity?

Yeah, I really think it comes down to looking at your book of business, finding where you have some commonalities or nexus within that book of business. You know, my guess is that if you’ve got 20 clients, 100 clients, whatever it might be, there’s there’s probably some overlap there. You’ve probably found a group of people that you work well with and you speak well with, and they they understand what you’re saying. You understand what they’re saying. Hey, that’s probably why they hired you in the to be you’re there a financial advisor or planner or whatever the whatever the case may be. And then look at where there’s some nexus between them. Are they small business owners? Are they executives, whatever it is? And then I think try to ask them some questions about, hey, tell me a little bit more about your workplace retirement plan. You know, again, depending upon the level they’re at, you know, is it working for you? Is it working for your business? Would you. Are there things you would like to do or you’ve always wondered if you could do that by people to make an impact or might help you, whether it be with your own personal financial planning or might help you from a business level recruit or retain or grow your business.

So I think kind of finding some of those answers, I think will make you a very effective advisor and will give you a very good entry point. And also just kind of help you as you talk to some of those DC specialists or third party administrators. Hey, you know, I don’t do much 401K right now, but here’s a two or three. I’m hearing from my clients and I’m really trying to figure out how I can help them and how I can get better solutions for them. And I think if you do that, that’ll give you a much higher rate of success and much more traction with your client. And I mean, quite frankly, a lot of times you’re not going to succeed in all cases. But but for me, at least, I know with my clients, if I can add value and if I can help them find solutions, then I’m looked at as more of a trusted resource. They’re more likely to refer business to me. They’re more likely to stay with me over time. And I think that’s just you know, that’s a win win all around, whether you. Bring on kind of a new line of business or whether you are really just kind of enhancing your reputation as that trusted advisor that they can come to you with any and all questions that then might have a dollar sign next to it.

Rick, as you know, so many financial professionals are members of a team. Have you found that in a team construct, it’s best to have one person specialize in this area as opposed to have everyone on the team understand and speak the language, if you will. Or is there a best practice as it pertains to teams that you’ve come across in your experience?

I do think depending upon your your scope and how many plans you handle. Again, coming from my world, this is all I do. So so we’re very cross-functional. Everybody sort of understands 401K or 403(B) or whatever it might be. But when you if you’re a wealth manager or if you’re a financial planner and you’re trying to get into the space, I think for now, it’s probably all right, learn understand it on your own, kind of have those conversations start to have some success. And then as you have some traction and you’re looking for, okay, well, how do I go do more of this and continue to keep my clients happy? Probably start with somebody who’s dedicated to doing this and can understand and get in there and invest the time and the energy that you just had to invest to kind of get yourself to a level of confidence or excuse me, competence versus trying to say, all right, everybody’s going to get cross-trained on 401K now. I don’t know that I don’t know that that pays the dividends. You’re you probably want it to.

Well, Rick, we certainly have enjoyed our conversation about jargon. And now Julie and I have a little jargon of our own. We’re going to go through a series of questions which we call Lightning Round Questions, to help our audience understand a little bit better about who Rick Unser is. So what we’re looking for is that top answer, right off the top of your head to some fairly simple questions that we’re going to we’re going to fire at you. So you ready to go?

Let’s do it.

What’s something you could eat for a week straight?

I’ll go. Grapes. Grapes are grapes I can do.

Are you a city person or a country person?

It’s been an evolving question. I started as a city person, but as I as I get older and less tolerant of noise and other things, I’ve been I’ve been enjoying a little more seclusion, a little more a little more separation. So where I live, you’ve got neighbors literally three feet away from you in all directions. So it’s it’s fun to be there. But when you’re if I really had to choose my if I really have to choose where I want to be, it’s it’s a little farther away from the hubbub and a little more a little more out in the country.

Do you prefer to shop online or do you like to go to the store?

That’s a coin flip, but depends on the store. Now, I mean, I like a good walk around at Williams-Sonoma, but try to take me to a department store and I’ll shop online all day.

Rick, are you right handed or left handed?

Right handed.

Do you prefer a paper to do list or a digital one?

I do both. I get more done when I write it down and it’s right in front of me. The the digital to do list is just it’s too easy just to moving on to the next day.

Would your friends say you’re an introvert or an extrovert?

I, I think that answer has changed over the last few years. I feel like if the you know, if ten is an extrovert and one is an introvert, I probably was more of a six or seven a few years ago. Now I’m probably more of a 4 to 5. So slightly skewing, you know, slightly skewed towards introvert, but not somebody who likes to just sit by myself.

In your opinion, what’s the best age?

The best age is today, right? Today’s age. Get out there and enjoy it. Embrace it and appreciate it and make the most of it.

And I think we’ll leave you alone after that one. That was a great answer.

Rick, we can’t thank you enough for joining us today and sharing your insight on how to speak 401k with your clients. And for those of you listening, we’d like to hear more from Rick and other industry experts. Please check out his podcast at the 401k Fridays podcast. Thank you again, Rick, for being here with us on the Human Centric Investing Podcast.

Thanks for having me.

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Talk to you soon.

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