A few years ago, the idea that participants in 401(k) plans were going to keep their money in their retirement plans longer started to gain traction.  Today, my guest Sue Walton, a SVP and Senior Retirement Strategist with The Capital Group shares how that idea got started and more.  I start with sharing a few of my preconceived notions about how retirement plans work for retirees, Sue responds to a few cynical comments and then get into the meat of how to make your workplace retirement plan more retiree friendly and how that could help your company and employees.  With some potential help on the way in the form of legislation, don’t miss our conversation on the current state of retirement income and how employers could integrate that into their plans going forward.  Finally, I stepped all over Sue’s great wrap up, but i think it was worth it.  

Quick thought before we get started, next time you are on LInkedIn, be sure to follow the 401(k) Fridays Podcast page.  I use that to announce new episodes, give you opportunities to ask questions of future guests and more.  And, don’t be shy.  If you have a question you want me to ask a future guest, leave it in the comments or shoot me an email to feedback@401kfridays.com.  

Guest Bio

Sue Walton is a senior defined contribution strategist at American Funds, part of Capital Group. She has 21 years of industry experience and has been with Capital Group for two years. Prior to joining Capital, Sue was a director at Towers Watson Investment Services. Before that, she was an investment consultant at Mercer Investment Consulting and Ellwood Associates. She holds an MBA from DePaul University with a concentration in finance and a bachelor’s degree in business administration, economics and international business from Marquette University. Sue is based in Chicago.

Thought it might be helpful to discuss a core retirement plan fiduciary concept, the duty to monitor.  To lend some muscle to the conversation I was excited to welcome back Jim Scheinberg, the Managing Partner and Founder of North Pier Fiduciary Management.  We kick off with one of the best explanations of what it means to be a fiduciary that I have heard and then we delve into the world what the fiduciary duty to monitor means, best practices for plan sponsors to follow and much more.  Jim also has some interesting points about how M&A in the retirement industry ties into monitoring, and some important differences between the roles of benchmarking, RFIs and RFPs.  Stick around for my wrap up this week to get an interesting story about one thing Jim and I had in common that we didn’t realize.

Guest Bio

Born and raised in the North Suburbs of Chicago, Jim Scheinberg came to Southern California in 1987 to pursue his B.A. in Political Science at University of California, Los Angeles. He achieved the Certified Investment Management Analyst (CIMA^®) designation in 2001 from The Investment Management Consultants Association (IMCA^®) in conjunction with the Wharton School of Business of the University of Pennsylvania. He has also earned the Accredited Investment Fiduciary^TM (AIF^®) and Accredited Investment Fiduciary Analyst^TM(AIFA^®) designations, awarded by the Center for Fiduciary Studies, which is associated with the Joseph M. Katz Graduate School of Business of the University of Pittsburgh. He also earned the PLANSPONSOR Retirement Professional designation (PRP) from the PLANSPONSOR Institute and sits on the Steering Committee of The Center for Due Diligence. He is a quoted resource to journalists, a regular guest expert on a syndicated radio and a regular speaker at industry conferences. Jim also regularly serves as a consulting expert for U.S. government regulatory agencies and as an expert witness for Federal ERISA litigation.

We break new ground today on the podcast as we talk about FOMO, catching falling knives, Uncle Warren and chewing glass.  My guest today is John Allen, CFA the Chief Investment Officer at Aspirant.  We also hit on some other great concepts such as why it is important to understand vs. observe what your investment managers are doing, thoughts on the impact of investment bubbles in the short, medium and long term.  I also have a new word for my vocabulary, conflate, John makes some insightful observations about how that term applies to risk and return for some people which dovetails nicely into some other thoughts on whether some traditional guidance 401(k) participants get, still makes sense. Finally, John makes some not so rosy predictions for what the next seven to ten years could look like for investors and why that matters to 401(k) plans and participants. Not always fun to consider, but definitely worth the listen.  

Before we get started, a lot of the topics John and I cover on the podcast came from the quarterly newsletter John and his firm Aspiriant put out.  If you want to check them out or subscribe, the link is below.  Click on that and you can figure it out from there.  Finally, be sure to catch my post episode wrap up for a few more interesting tidbits on this episode and what we have coming up in future episodes.  

http://aspiriant.com/fathom/insight/

Guest Bio

John Allen joined Aspiriant in 2013 as Chief Investment Officer. As CIO, John is primarily responsible for leading the firm’s overall Investment Strategy & Research Group, broadly consisting of twelve investment professionals. The group is responsible for asset allocation, portfolio construction, manager selection and risk management. John is also the Chair of the firm’s Investment Committee and serves on a number of other committees. He has nearly twenty years of experience in investment management, investment banking, corporate finance advisory and business strategy consulting. 

Prior to joining the firm, John was a senior member of the client service team at Grantham, Mayo, Van Otterloo (“GMO”), which manages approximately $115 Billion across a wide-range of public equities, fixed income, hedge funds and asset allocation funds. In that role, John had primary responsibility for 80 clients and $6.5B in assets under management. 

Prior to joining GMO, John was the Head of Investments at a large family office in Los Angeles. There, John had responsibility for managing the firm’s overall investment portfolio as well as its direct investments. 

John established his career working in the investment banking department at Donaldson, Lufkin & Jenrette and in the business consulting practice at Stern Stewart & Co. Throughout his career, John has served on the boards of directors of three private companies. 

John earned a Bachelor’s of Science degree with high distinction from the Economics Department at the University of Virginia. He holds the Chartered Financial Analyst (CFA) designation and the Chartered Alternative Investment Analyst (CAIA) designation. He is also a member of the CFA Institute and CAIA Association. 

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 150 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

This episode is a companion episode to a similar one we released a few weeks about which focussed on the equity side of the conversation.  Not require listening, but if this one caught your eye, you should check that one out as well. My guest today, John Bellows, PhD, a Portfolio Manager with Western Asset Management and a member of their US Broad Strategy Committee, the Global Investment Strategy Committee and the Global Portfolios team. We jump into the recent market action right out of the gate to help interpret some recent events and how they could impact fixed income investments in workplace retirement plans.  We also hit on some topics that can cause confusion such as do we want inflation which makes things more expensive and want to avoid deflation which makes things less expensive.  With the background set, John then shares some great input on evaluating the fixed income portion of investment menus.  Be sure to stick around for his comments towards the end about the index vs. active conversation in the fixed income space.  

Guest Bio

The title for this episode might seem a little confusing, but after you listen to my conversation with Don Trone, CEO and Co-founder of 3Ethos it will make a lot more sense.  This is Don’s second visit to the podcast, if you missed his first one, Building a Stronger Retirement Plan Fiduciary, it is a great listen as well. Today we kick off with a quick post mortem on the DOL fiduciary rule and thoughts on the movements within some states to create their own version of a fiduciary rule.  We also tackle a bigger question of whether you can regulate or legislate someone into being a good fiduciary, interesting response to an interesting question.  Don also shares what he feels the future of fiduciary holds and shares input on robo-fiduciaries and if fee compression is impacting the fiduciary world.  Finally, we also discuss how plan sponsors can keep their fiduciary roles in perspective while keeping their important day jobs.  

Guest Bio

Don Trone is the CEO and one of the Co-founders of 3ethos, which conducts original research in the new field of Behavioral Governance (BG). BG is the follow-on to Behavioral Finance, except now the focus is on how the behavior of a fiduciary impacts the quality of retirement outcomes.      

Don Trone is the CEO and one of the Co-founders of 3ethos, which conducts original research in the new field of Behavioral Governance (BG). BG is the follow-on to Behavioral Finance, except now the focus is on how the behavior of a fiduciary impacts the quality of retirement outcomes.     

Don was the founding CEO of fi360; founder and President of the Foundation for Fiduciary Studies; and the first person to direct the Institute for Leadership at the U.S. Coast Guard Academy.

Over the past three decades, Don has trained more than 10,000 investment fiduciaries on the subject of procedural prudence. In 2015 he was named by Investment Advisor magazine as the “Father of Fiduciary” and one of the 35 most influential people in the financial services industry. In 2003, he was appointed by the U.S. Secretary of Labor to represent the investment counseling industry on the ERISA Advisory Council, and in 2007 he testified before the U.S. Senate Finance Committee on the fiduciary issues associated with the management of retirement plans. He is the author or co-author of ten books on the subject of fiduciary responsibility, portfolio management, and leadership.

Don is a graduate of the U.S. Coast Guard Academy, and served for ten years on active duty, most notably as a long-range search and rescue helicopter pilot. He has a Master’s from The American College and has completed post-graduate studies in theology from the Pittsburgh Theological Seminary and Trinity Episcopal Seminary.

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 150 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!