The top benefit advisers take their clients' needs very seriously. But Anthony (Tony) Madera, winner of this year's EBA Retirement Plan Adviser of the Year award, seems to take them personally.

Madera, a senior benefit consultant with Gallagher Retirement Services in Clarks Summit, Pa., truly worries about whether his clients' employees will be able to retire, whether his clients are getting the most bang for their retirement plan dollar and if they are fulfilling their fiduciary obligations appropriately. And then he gets down to work.

Madera relishes playing the role of teacher as a fiduciary process educator for plan sponsor clients and imagines he might have found that job equally rewarding had his career unfolded differently.

 

Invaluable experience

For Gregg Fischer, a national marketing manager for Gallagher Retirement Services who nominated Madera for the award, "it's a matter of attitude and making sure that every client is treated as our best client, no matter how big or small they are."

Madera is "very attuned to what our plan sponsor clients need. He has proved it year after year," Fischer says.

Madera joined Gallagher in 2007, after spending nearly 15 years with Prudential Retirement Services. During his last five years with Prudential, Madera served as a senior relationship manager. "I've been on both sides of the fence," he says. The experience makes him more valuable to clients, he believes. Over the years Madera has accumulated not only all of the requisite securities and insurance licenses, but also credentials that reflect his commitment to client service excellence, including Accredited Investment Fiduciary and Certified Retirement Counselor.

Madera's passion for client service is grounded in an understanding that "we're not just servicing a program, but selling a process."

That process involves helping clients establish a comprehensive set of policies and procedures to ensure that they are receiving the retirement plan services that best meet their needs, and that the plan is managed effectively, economically and consistently with fiduciaries' obligations to plan participants.

Indeed, helping clients to become fully aware of their obligations as plan fiduciaries often is one of Madera's most urgent priorities. "A lot of clients are asking, 'As a fiduciary, what should I do?' It's a huge issue for many of them," he says.

 

Coaching fiduciaries

"At Gallagher," Madera adds, "we have a great process put in place for clients geared around fiduciary responsibility, what they need to know, what they really need to do in terms of making sure their programs are solid."

The question of who is a fiduciary - both within the sponsor organization and among advisers to the plan - is sometimes a mystery to Madera's new clients. He carefully walks them through that subject - a topic that is particularly timely with the Labor Department's latest postponement of the effective date, until next April, of the long-simmering 408(b)(2) fee transparency regulations.

However, for Madera's clients, the detailed new disclosure requirements under those rules will not produce any big revelations. That's because a cornerstone of his (and his Gallagher colleagues') value proposition to retirement plan clients has been helping them understand the fees, both direct and indirect, they are paying and to have some market context in which to evaluate those costs. "We've been doing this for many, many years," he says. "A lot of what we do is centered around benchmarking programs and making sure that fees are appropriate for the size of the plan."

Uncovering and shining the spotlight on various plan vendors' administrative fees, investment management charges and revenue-sharing arrangements has enabled Madera to help many of his clients to achieve substantial cost savings.

 

Identifying savings opportunities

Many employers don't realize that, depending on the size of their retirement plan, they may have access to institutional mutual fund share classes, enabling them to "lower the expenses of the plan for participants and for the plan itself," Madera says.

He made a big push last year to ensure that all of his clients who could take advantage of that opportunity do so. And that didn't necessarily require a change of vendors, he says. Often, Madera was able to renegotiate a more favorable fee structure for clients, and thereby spare them the disruption of changing vendors.

(Some cost-saving examples that caught the attention of the judges on this year's Retirement Plan Adviser of the Year committee are identified in the sidebar below.)

Madera and his clients understand that there is more to having a successful retirement plan than simply keeping administrative costs in check. As noted, Madera takes particular interest how his clients' employees are tracking on the path to a solvent retirement. "It's my biggest concern," he says.

 

Creating a campaign

"What gets me excited is to be able to go in and educate" clients on the fundamentals of retirement plans, investing and fiduciary responsibility, he says. But he doesn't just plunge in and start lecturing. It's important, he says, for the client to be equally excited about the prospect of their employees becoming retirement-saving savvy. "We try to work with our clients in developing an educational campaign," Madera says.

"So what we'll do is set up a calendar, set the goals and objectives, just as we would in picking the investments for the plan."

 

Plan design conversation

Madera works closely with clients to help them understand the role that plan design, including employer matching contributions formulas, can play in the plan's overall effectiveness.

He also helps participants understand that matching formulas aren't necessarily designed to signal their optimum deferral rate. One of his client's match stops when the employee's deferral amount hits 5%, and some employees have interpreted that to mean if they defer that amount, they'll be set, "not realizing that 5% is probably just not going to do it," Madera says.

A related common topic of discussion between Madera and his plan sponsors today: Whether the plan should auto-enroll employees. Often plan sponsors shy away from auto-enrollment because they don't want to appear heavy-handed pushing employees to act. Or plan sponsors are reluctant to incur the incremental cost making matching contributions on behalf of employees who might not otherwise become plan participants, Madera says.

However, he believes any incremental employer cost may be offset by the goodwill ultimately engendered in employees who, over time, come to appreciate having been pushed into joining the plan.

Whether employers finally agree with all his recommendations, they generally are eager to talk to someone who comes to them with ideas - particularly ideas about saving money. And that is why Madera is bullish about the retirement plan market. "There are a huge number of plans that don't have advisers, and therefore haven't benchmarked their fees," he says.

Similarly, Madera also sees opportunities to help employers, particularly educational institutions employing multiple investment providers, to achieve economies by consolidating vendors.

It is not surprising that the winner of this year's Retirement Plan Adviser of the Year is someone who combines love for his work with optimism about its future.

 

Stolz, former editor of Employee Benefit News, is a freelance writer and publishing consultant based in Rockville, Md.

 


 

Helping plan sponsors keep retirement plan costs in check

The following are three recent illustrations of Tony Madera's service to his retirement plan clients:

Community hospital # 1, a $65 million 403(b)/ 401(a) plan:

* Reduced initial annual investment management fees for participants by more than $40,000 by negotiating a lower share class for three of the plans investment options.

* Through managed participant education, plan enrollment increased by more than 5%, and an equal increase was experienced over a 12-month period in enrollment into more suitable asset allocation funds.

Community hospital # 2, a $50 million 403(b) plan:

* Achieved a $25,000 reduction in initial annual investment fees for participants by negotiating a lower share class for all of the plans mutual funds.

* Negotiated a 15-basis point increase in the yield on the plan's fixed income account, increasing participants' interest earned on this fund by more than $45,000 annually.

Advocacy organization, with a separate 401(k), 457 and 403(b) plans, and collective assets of $8 million:

* Conducted a full-scale RFP to consolidate from three vendors to one vendor for all three plans.

* Conversion to single vendor resulted in savings exceeding $25,000, and the addition of best-in-class investment line-up increased educational presence and more streamlined plan administration.

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