Proactive vs. Reactive, it's two words that once you hear them you immediately realize you want to be proactive. Let's face it, there are no movies about the kid that was reactively waiting for the prom queen to ask him to the big dance, or books about the famous Greek king who instead of going on an Odyssey stayed home and twiddled his thumbs. The problem with being proactive is that it means that there is a lot of work to do, and I think that is where you start to see the difference between those that live the values of being Proactive, and those that don't.
As most of you know who have worked with me throughout the years, I take great pride in being proactive. Whether it be by providing great service to a client, helping develop a team or a department, or working on providing tools to improve a process, I wanted to make sure we weren't waiting around for the next opportunity, we were creating it. I wanted to be Proactive so much that when I was being managed into being reactive, the next thought I had was that there was a business model out there for those that wanted to be proactive in the retirement plan business. Below I have identified some of the items our firm does to be Proactive, just a few of the items where I know that other TPAs have become Reactive.
Now I know most advisors and plan sponsors are thinking every TPA did (or offered to do) plan design when the plan was first sold, but this is an important area that should be looked at regularly. This is particularly the case when it comes to small plans where the time investment actually can reap the largest rewards with a properly designed plan that favors the owners of the plan. Instead, I have frequently found this is a reactionary pitfall where the client assumed this was already being looked at, but actually the TPA was waiting for a design request so they could bill the client. One of the worst examples was last year when I took over as a Relationship Manager for a large bock of business, and immediately started identifying various opportunities for my clients. In the various opportunities I came across one plan that was failing both ADP/ACP discrimination tests, along with being Top Heavy since the plan had joined the firm. In looking at the plan they were already doing a match generous enough be Safe Harbor, it was just missing the 100% vesting, and sure enough if you read through the 20+ page packet our firm sent out, there was a check box next to "call us to discuss your options". The problem was no one had taken the time to make sure the client understood the benefits and opportunities they were missing out on. As you can imagine the client was grateful to find out with some small changes he could put in more money than he had been able to previously, but he left me with a question I couldn't answer, "Why hadn't anyone reached out to me sooner?". Now there are great TPAs in our field at all levels of size, but in working with various Administrators & Advisors throughout the years there are many that have fallen into reactionary behavior where as long as the client isn't calling, it's a happy client. This is a huge disservice to the client who is relying on all of the professionals supporting their retirement plan to find the best fit for them. I have always enjoyed speaking with a client because normally in the course of the conversation there was a question or two that wouldn't have been asked otherwise, and those were the real opportunities to add value.
Now I know no one likes to make less money, but no one likes getting "nickled and dimed" either. A great example of this actually took me by shock, as one of the first questions I am normally asked since starting our firm was "do you credit back revenue sharing to the plans?" It actually caught me by surprise the first time I was asked because I had never considered not crediting back fees to our clients. What normally followed was an even bigger surprise when the person asking the question said their current firm didn't. First, what are you still doing with them, but this goes back to being reactionary as this was the way the industry operated for so long. This might have been true at one point, but with technology streamlining so much there are opportunities to provide more value while crediting back fees from revenue sharing. The best proof I can think of is the dated websites many Administrators currently have. Now I know ours is still developing some of the content and features (www.lifeincrs.com), but considering the resources we put into it compared to more established firms I think we are doing pretty well for week three. A fun tool I used too was archive.org/web/ on some of the TPA companies I knew of, and then you can really see how long it has been since they addressed some of their technology solutions. Maybe at the very least some of the TPAs that don't credit back revenue sharing will at least spend some of the money updating their websites if they aren't going to credit them back to the clients they should be going to.
Now while our company of three weeks isn't some overnight success story that you'll see on the homepage of the Wall Street Journal, the feedback has been very positive, and I attribute that too to being Proactive. We have already had advisors thanking us for things that their current TPA won't do, or by providing quality work that the other firm think should be billable, or outside of their services all together. While there are many long days ahead for us, most proactive personalities know to expect them anyway. Best of all if it helps someone else realize the opportunity they are missing we will be glad to have them. .