If you want to know where the retirement industry is headed in the future, just observe what Barbara Delaney is doing as founder and principal of StoneStreet Advisor Group in Pearl River, N.Y. Over more than 30 years working in financial services, EBAs Retirement Adviser of the Year has consistently been ahead of the curve when it comes to retirement plan design.
In the 1980s, she was among the first to offer 401(k) consulting services, in the 90s and early 2000s it was a focus on fiduciary duties. Today, Delaney is leading the charge again by integrating education on financial wellness into her practice.
Managing approximately $2.5 billion in assets for more than 60 clients, Delaney, selected by EBA editors as Retirement Adviser of the Year from among dozens of online nominations, has seen a trend in the last few years where employees are less and less engaged in the retirement plan conversation. Employee meetings were not well attended, likely because the retirement desires of 20 year olds and 50 year olds have little in common. Youve lost everyone in the room because they all have different ideas of where they are in their life, says Delaney.
To combat the issue, she instituted one-on-one meetings, which are helpful but also labor intensive for her 12 employees, she says. Then, once she discovered a company that would partner with her on targeted financial education services, Financial Finesse, those broad topics were further narrowed down to specific and highly engaging subject areas for the full range of employees.
We started thinking about, how do we better engage participants in getting them to understand how important financial wellness is, not only at a young age but also as they approach retirement, says Delaney.
Financial wellness
Using data from employee questionnaires, Delaney and Financial Finesse, in partnership with LPL Financial, developed 18 different programs participants can sign up for, with topics such as having a baby, paying down college debt or fixing a FICO Score. We found those much more engaging and successful, she says.
One client, the Superior Officers Council of the City of New York Police Department, instituted such a plan last year. The initial assessment found:
75% of the members did not know where they were with respect to their retirement goals;
Only 20% reported contributing to an IRA outside of their employer-sponsored plan, compared to the national average of 28%;
Only 60% of the top three income tier employees had an emergency fund in the event of an unexpected financial event.
As a result, Delaney and her team are continuing to provide regular workshops and one-on-one counseling for the SOC. Weve been very successful having them come to specific workshops, she says, adding that although the police department has a 401(k), 457, and then a supplemental plan, their biggest concern, along with information on 529 plans, is still not having enough for retirement.
So even though the city has all these different plans, we put together a program with Morningstar that allows the officers to put in their data from their other plans and see things holistically, she says. So its a work in progress with them.
Meanwhile, Delaney is talking with employer clients about their traditional wellness programs as well. We began thinking about if employers are spending all this time and energy on wellness programs, we should actually combine it with financial wellness because its quite a bit of work for employers to organize these programs, she says.
One New York bank client gave every one of its employee a pedometer and set up teams so that whichever team did the most exercise they got credits off of their health insurance costs for the following year. Delaney then incorporated a financial wellness aspect for them so that people who do their financial wellness assessment will get even more credits toward their health insurance costs.
If employers think financial wellness and employee wellness are not related, they should think again, Delaney points out. Using her nephew who works for a utility company as an example, Delaney explains that he hasnt been able to get a promotion because of the large number of people above him who are afraid to retire.
That creates a problem for employers, she says. The CFOs are really starting to take notice that their workmens comp claims are going up, their health insurance cost, because theyre older workers, is changing. So the whole mindset is changing on helping people holistically on the 401(k) plan and health.
Solid advice
Client Scott Dixon, director of finance at the American Council of Life Insurers in Washington, D.C., is impressed with what Delaney has been able to accomplish for his 130 full time employees since she partnered with the ACLI in 2011.
Delaneys knowledgebase as someone whos done frequent speaking engagements on Capitol Hill, combined with her ability to meet with him in person on a quarterly basis, stood out to Dixon. He also appreciates the benefits she brings as an independent financial consultant, particularly fee benchmarking.
Delaney was able to negotiate fee reductions as soon as she came on board, and this summer was able to get fees reduced on half of the ACLIs 24 funds. Some of that is our asset size has grown in the last couple of years, but its also her due diligence in being able to do that, Dixon says. Thats something that we as a plan sponsor dont have the time or resources to be able to tackle that and speak to Prudential in the language to be able to get those fees reduced.
The organization is also in the process of terminating its old cash balance plan, and Dixon says Delaney has been worth her weight in gold thanks to her help with that process.
We couldnt be happier with the service and everything that shes provided the firm. Shes attentive to our needs and quick to get back and stay on top of things, he says. The group of us who meet regularly on the 401(k) plan have just continued in the last few years since we hired her to say this has just been money well spent.
For us, it gives us a level of comfort that weve got somebody there who this is what they do day in and day out. Because Im handling the finances, Im not looking at the benefit plans constantly. We have somebody there to help us in the decision making process and give us the tools and be completely independent, so we feel a lot better. Because you just never know, it just takes one person to get disgruntled and come back at you and say, Well you should have done this and that . So with her we feel very comfortable that were covering all our bases.
After starting out working in financial planning for E.F. Hutton & Co. early in her career, Delaney left to work with pension plans at an employee benefit firm once her daughter was born. It turned out very well because working with institutions, they only work Monday through Friday, they dont work weekends, and quite frankly theyre much smarter, she says.
Not that individuals are not smart, but youre not dealing with emotions. When youre dealing with peoples money, individuals, its much more emotional than institutions. Institutions know that when the markets go down, so long as your allocations are correct, youll be fine if you have a good adviser. And thats how I got into the field.
When the benefit firm Delaney worked for was sold in 1987, she opened her own practice. The name has changed over the years as shes acquired other companies or lost a partner, but became StoneStreet Advisor Group officially in 2007.
Partnering opportunity
Stepping into the wellness space, Delaney is cognizant that group benefit advisers may feel shes stepping on their toes. But really, shed like to partner with them.
We have been looking for partners, she says. Weve been trying to find some people to work with us, and we are having some success, but theyre very suspect of, are we stepping on their toes? And were really not.
Delaney hired someone to work with wellness providers and help clients vet the best programs out there to tie with a financial wellness program. If in the process one of her clients which are in the 100 to 10,000 life range asks if StoneStreet is in the health business shell say to them, No, but well partner with your wellness program so we can have a cohesive program for your employees. Im not trying to take [a benefit advisers] thunder, she adds, but, you know, this is what we do if you want successful outcomes for your participants.
