Dr. Greg Kasten graduated from medical school in 1980. By 1992, he became a full-time financial adviser, opening his first trust company shortly thereafter. What could lead to such a change in course?

The now 58-year-old Midwest native found himself dissatisfied with the available financial planning processes almost immediately into his first job as an anesthesiologist. "I was in private practice and just learning to take care of my own retirement plan. I found that financial advice from planners and stock brokers was very biased and I realized I needed to learn to take care of it myself," says Kasten, who resides on a farm outside of Lexington, Ky., with his wife of 34 years.

As he learned more about the business, he found himself giving advice to colleagues around the hospital. After a little while, he got a bit of a reputation for his dabbling, and found that different surgeons and doctors were seeking him out in the halls to ask questions and get answers. Very quickly Kasten saw the procrastination of his fellow doctors when it came to enacting the advice he would provide. Eventually he told them, "Let me do this for you."

Kasten didn't charge anyone anything at first, but when he found enjoyment in the process, alongside actual success for these friends-turned-clients, he says, "I realized, maybe these guys will pay me."

That's when he got the idea to go into the financial industry. "They needed someone they trusted and so I started a little business. I actually did that and practiced medicine full time for another seven years," he recalls.

By 1992, Kasten had built up a $70 million portfolio - and this was before electronic statements so he was doing everything himself, by hand. "I remember when [my clients] would call me, I never had to ask them for an account number," he says. "People really liked it because it gave a personal approach."

By the time he opened up his business he had about 100-125 accounts, all built throughout his anesthesiology career.

 

 

Making the switch

"My transition was very gradual," Kasten reflects. "Business got bigger and bigger and medicine was steady, but then slowly the [financial planning] business gradually became more profitable."

At that point, changing industries was easy for him. Although, he notes, it was a change to have the esteem of the hospital environment swept away. "It's different when you're running your own business," he says.

Kasten's co-worker remembers that time quite well. "I interviewed in his basement before he had an office," says Michele Hardesty, now chief operating officer of Kasten's current operation, Unified Trust Company, in Lexington. "It's been an interesting ride ... He was a doctor, I was a fresh-out-of-college biology major ... We hooked up with a political science person and a math person and none of us knew how this business worked. He just built it the way he thought it should work," she continues. "And stuff that he was doing for years, you're now starting to see the industry start to do, so you know what he was thinking, and what he's thinking every day, is the right thing because it's the way the industry's starting to go - kicking and screaming."

It is that bravery and desire to do things the right way to which Kasten owes his success, he says. He thought about becoming a fiduciary in 1993 after about a year of working full time in the business. "I knew my clients would be better off in a trust environment," he explains, noting that he originated the First Lexington Trust Company before being a fiduciary was the "hot" thing to do. "I always have had discretion," he says.

Then in 2000, after getting bigger and bigger once again, Kasten converted the company to a state charter with federal oversight by the Office of the Comptroller of the Currency - and from there, the multi-state Unified Trust Company was born. Today, the company has grown to 95 employees with total fiduciary assets of about $3.4 billion.

Kasten's recent product venture, the Unified Plan, takes a unique approach to retirement, which he says might help solve the retirement crisis that we have in the U.S. once and for all - or get us on the path, anyway. "We solve the retirement problem by making changes for people," he says, explaining that employees don't want to hear the education that employers are trying to throw at them about handling retirement on their own. "We've been able to help more people by using fiduciary status to control their situation. The way we fix this is that we move the enrollment meeting away from asking questions to providing the answer," he says.

Kasten's team will customize a plan for each participant, telling them, for example, that if they make $6,000 a month, then they need to put a certain amount away if they want to retire by a certain date. "We tell them, 'All you have to do is check the box,'" he says about the preparation and work Unified Trust does on the back end on behalf of participants. "People love that and the proof's in the pudding," he says.

Unified Plan has 32,000 participants today. Eighty-three percent of employees who are given the Unified Plan option by their employer choose to opt in.

Kasten measures the success of this product, and his company for that matter, by who is on track for an adequate retirement, which he defines as replacing 70% of an employee's paycheck. To that end, Unified Plan has 70% of its population on track for adequate retirement savings, versus the 25% national average. "For most of us, your retirement purchase is the largest financial transaction you'll ever make in your entire life," he continues. "It's two to three times what you pay for your home. We put so much into our homes but we spend 15 minutes making the retirement decision."

And that, he says, is why taking the control away from the employee as a fiduciary adviser, and telling them what to do instead of giving them options, is the only way to fix things.

 

How he got here

Kasten's colleague Hardesty describes him as "incredibly driven" and says "he's always coming up with new ideas." The idea for Unified Plan, and his way of retirement thinking, is based on his philosophy about how people behave. Kasten says there are five key behaviors that advisers have to understand in order to work with people on retirement vehicles:

1) Inertia: People tend to stay on the path they get started on. "The rock just rolls down the hill, so you start in the right or wrong direction and that's how you stay," Kasten explains.

2) Procrastination: "This is that sense that, 'I'll do what you told me to do tomorrow,'" Kasten says, "And it's always tomorrow, and tomorrow never comes."

3) Choice overload: All of the choices about retirement - beneficiary, portfolio, amounts, etc. - are usually made at the time of an employee's hiring when they're also thinking about health insurance, life insurance, voluntary insurance products and so on. "And so the safest choice turns out to be nothing," Kasten says.

4) Endorsement: Vendors usually say, "We don't endorse anything," but that is how we tend to behave as humans. "Someone puts something down in front of us and we have this basic human nature to believe that what's there is good for us," he says. As such, auto-enrollment by employers at 3% and with a particular target date tends to be what people stay with. Even though they say vendors don't endorse things, they do with these practices and of course, they are not always the right choice for each individual employee.

5) Framing: You get the answer to your question depending on how you ask it. Kasten reminds advisers that while this may sound silly, it's important to be mindful of it in all that you do.

In addition to his creative thinking, Kasten has also relied on strong client relationships over the years. "Of the original 10 clients I had in my early days in 1985, nine of them are still accounts," Kasten explains. Dr. Richard Smith is one of those clients. "Because I had the personal one-on-one attention, I knew him as an M.D., I trusted him and think he's bright," Smith reflects. "I think he's done well or better than most other options."

"He is the most ethical man I've ever met," Hardesty adds. "He always wants to do the right thing. All the work he's done and the systems we've built and the reports and the way we handle retirement plans, it's all participant-centric; it's all what's best for the participant. And that's not just lip service; he lives and breathes that."

She adds that it isn't just the success he's seen that proves it. It's also the way he handles setbacks. "When we initially developed Unified Plan, he had specs in mind and he got hit with the real world examples and he was the first person to say, 'Maybe I was wrong,'" she says. "He's the first person to take feedback and then make things better. Something will go wrong and he'll disappear for a day and he'll have been at the law library researching ERISA codes."

 

Onward

As this year's Retirement Adviser of the Year, EBA asked Kasten about his change from the medical industry to the financial one and how they compare. "I'm still making a contribution in terms of improving where people are, there's still a sense of doing good," he says. "Next to your health, the most important thing is your financial stability."

He says he was never unhappy as a doctor and in fact, two of his three children have gone on to become doctors themselves. And even though he hasn't practiced in more than 20 years, Kasten still maintains his medical license and is board-certified. "I went through all that and I learned it, I feel like I should keep it somewhere in my brain," he says.

There are three parallels between the medical and financial planning industries that Kasten draws:

1) Doing good: A doctor above all should want to do good, and financial planners should want to help people.

2) Hippocratic Oath: "That message in medicine - 'first, do no harm' - and being a fiduciary are similar in a way," he says. There's so much advice out there in the financial planning world, it's hard to know if it's the right advice. That's what fiduciaries are there to distinguish, he postulates.

3) Evidence-based: When financial planning, like medicine, is rooted in an evidence-based approach to prudent decision making, Kasten says, it's the best way.

"Now what I wouldn't have liked is to go in and sell some stupid, bad investment," he says. But instead, with the creation of his own company, own products, based on his own unique philosophies about how people act and save, Kasten has become a role model for successful retirement planners.

"It's 'try to do the right thing' in all situations he encounters," Hardesty reflects on why he's perfect for the Retirement Adviser of the Year award. "When he can get a plan sponsor that understands our story, he's unstoppable because it's the right way to do things."

Kasten truly has found his life's mission, and he says he tries to instill his core values throughout his entire company, from the people at the front desk back to himself.

He says more advisers should go through the steps of thinking about how people behave and how to create retirement solutions that work with those behaviors, rather than against the grain. If that happens, then the industry as a whole could make a "huge difference in the number of people who are prepared for an adequate retirement," he says.

 

MORE ABOUT THE WINNER

Dr. Greg Kasten started as an anesthesiologist, worked on the side as a financial planner for his friends and colleagues for seven years and then went into the business full-time. He hasn't looked back since. Here are some more facts about the man who won EBA's 2013 Retirement Adviser of the Year award.

* Because of where he started, Kasten's company still has twice the concentration of medical plans than other 401(k) providers, or about 30% of his portfolio.

* Kasten was born in Southern Illinois but has resided in Lexington, Ky., for most of his adult life.

* Kasten has three children, all married themselves.

* To get outside of the financial world, Kasten enjoys hiking, golfing and hunting to relax outdoors in his off-time.

* He lives on a farm with his wife, where he enjoys mowing the lawn with a tractor.

* He is a deacon in his church.

* He drives a 1931 Ford Model A that took a local mechanic several years to fully restore.

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