Welcome to Juncture 401k
When I founded Juncture 401k, it was due to necessity. When I started my career as a financial advisor, I took every opportunity to learn, hone, and continuously refine my knowledge of the financial behaviors and science of investing and creating financial plans.
As I expanded on my client base and worked with an ever-increasing number of clients, it became second nature to dissect and evaluate other financial advisors' plans. It came as no surprise that many of these investments recommended by others came laden with excessively high fees and severe underperformance. More astonishingly was the lack of advice provided to the individuals coming to me.
As I developed further into my career, I found that my client list concentration was predominantly business owners and C-suite executives. While their backgrounds and preparedness for retirement were diverse, there were often two commonalities.
The majority of their wealth was saved in their corporate retirement plans and;
Their corporate retirement plans were severely lacking.
As their financial advisor, I had a fiduciary duty to guide and advise them on how best to invest in retirement plan constraints. However, the hard part was finding low-cost and high performing investments in their pre-determined menu of investment selections. You would've thought that it should be simple, right? Well, it wasn't.
The truth of the matter is that many 401(k) plans structured years ago are often established by an individual that rarely came back to evaluate and modernize the plan properly. Far too often, I ran into 401(k) plans created in the 90s and still used the same investment menu. The only conversation the advisor had with the company and its employees were during the annual enrollment meetings. The executives I worked with hardly knew the deficiencies in their 401(k) plans and their cost on their retirement.
Perhaps it's due to high-paying lobbyists or the fragmented way financial advice is given, but the financial services industry has always been slow to transform. It was slow to provide transparency, it was slow to enforce fiduciary care, and it was slow to adapt to the rising retirement pandemic that is plaguing our country now.
The reluctance to be become better needed to come sooner. With the majority of America's retirement held in 401(k) plans, I felt the need and responsibility to push the boundaries and redefine the status quo.
I asked myself the most pressing issues and areas of improvement when it came to 401(k) plans. After years of research and countless hours studying and speaking with industry thought leaders, I came back to the drawing board and decided on two items:
Reducing fiduciary liability;
And increasing financial literacy.
As the retirement crisis continues to surge, 401(k) plan lawsuits have become prevalent. High cost and lack of performance have become a nightmare for plan sponsors that failed to fulfill their companies' employees' fiduciary obligations. A quick Google search on 401k lawsuits paints a picture of companies penalizing millions upon millions of dollars in settlement.
Reducing fiduciary liability is of utmost concern because if fiduciary liability is not decreased, we run a high risk of companies decreasing accessibility to corporate retirement plans such as the 401(k). I firmly believe that while that may reduce liability, it would also further make worst our retirement crisis. Industry studies have shown that employees without access to a 401(k) plan are less likely to save for retirement on their own, which is why 401(k) plans are so crucial for Americans' financial well-being.
Increasing financial literacy is also of utmost importance because most of our American workforce is ill-equipped and illiterate when it comes to financial matters. I'd like you to think about it for a second. During which year of your high school or university years did you take a financial wellness course? Which grade level did you learn to balance your checkbook or build upon positive financial behaviors? If you're like many, it was most likely never.
Yet, it doesn't have to be that way. While our education system may not have been equipped to provide financial literacy, we can. Our place of employment can and should give it. In a 2019 study by Morgan Stanley, research indicated that nearly four in five employees with high financial stress are distracted by financial stress at work, and it's not just workers with lower incomes. America's employees are financially burdened by a multitude of concerns such as but not limited to:
Student and household debt;
Protecting their family from an unexpected illness;
Retiring on time;
Being unprepared to unforeseen financial matters.
A workforce with less financial stress is a more productive and engaged workforce. Benefits like employee financial wellness do more for our employees' holistic well-being and further increase employee satisfaction and retention.
If you think your employee would not find value in that, think again! The same study further provides the following:
60% of employees would be more likely to stay at a job if their employer-provided financial wellness;
71% of workers would be comfortable discussing their financial matters at work with a financial professional unaffiliated with their employer.
As a nation, we may not ever be able to solve the dwindling Social Security Trust Fund or provide a universal basic income. But we can become proactive about providing a sound financial retirement plan at our place of employment. That starts by taking a hard look at what is currently in place, addressing the plan problems to reduce fiduciary liability, and providing a guided financial wellness curriculum for our employees.
If that seems like a lofty goal, it isn't. For that is what we do here at Juncture 401k. We utilize the industry's top retirement plan providers and pair the best-in-class investments to create a tailor-made solution for your company and its employees. Working with us doesn't always involve making drastic changes. More often than not, we can reduce costs and increase the quality of investment selections right where you are. We also pair an on-demand financial wellness module for your employees so that they can have access to advice when they need it and relevant to their life goals.