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The mission of the Partners is to empower all of us to go directly to each other with our expertise. FiduciaryFirst is considered an industry leader and our knowledge and informative blogs can help you gain an understanding about key topics within the industry.
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Reclaiming the American Dream

Reclaiming the American Dream
More than half of U.S. households say the American dream is unattainable for them, according to a recent survey of 3200 households with an average income of more than $122,000. When asked to define the American Dream, 82% described it as obtaining financial security for themselves and their family. A third of respondents feel the American Dream is disappearing altogether. These results, from a MassMutual 2018 study, represent a disturbing reality for far too many Americans who are struggling to get ahead and prepare for retirement while dealing with ever-mounting levels of personal debt. Here’s a look at the debt landscape among those survey participants: Mortgage: 64% carried a mortgage with an average balance of $188,795. Credit card: 56% reported having credit card debt, average total balance of $10,386. Student loans: 26% carried educational debt, with an average balance of $39,903. How are they dealing with their debt? According to...
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Overcoming Myopic Investment Decision-Making: Where Advisor and Analyst Meet

Even when presented with timely and accurate financial information by fiduciary advisors, employees don’t always make the best decisions for themselves when it comes to saving for retirement. When advisors exclusively focus on financial education and fail to address underlying issues of behavioral economics, there’s a greater chance that poorer financial decision-making may occur. Helping employees overcome the cognitive biases that can lead to bad investment decisions increases their chance for success in becoming retirement ready. Short-Term Thinking Myopia, in the realm of financial planning, refers to the tendency to make shortsighted financial decisions at the expense of longer term gains. Studies show that when offered the choice of $100 now or $120 in a month, more people choose the immediate reward. However, if the offer changes to $100 in 12 months or $120 in 13 months, they more often elect the higher payout. One potential explanation for this inconsistency...
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Time’s Up: TDFs and Your Fiduciary Obligations

Target date funds (TDFs) — which rebalance investments to become more conservative as a fixed date approaches — are a convenient way for plan participants to diversify their portfolios and reduce volatility and risk as they approach retirement, making them an increasingly popular choice. However not all TDFs are created equal, and selecting and monitoring them can pose unique challenges for plan sponsors and fiduciary advisors.   TDFs were first introduced in 1994. Ten years ago, just 13% of 401(k) plan participants were invested in TDFs. Today, that number has risen to more than 50%, according to a new report from Vanguard, which also estimates that 77% of Vanguard participants will be invested in a single TDF by 2022.   However, the “automatic” rebalancing feature of TDFs doesn’t supplant the obligation to monitor funds and educate participants. The Department of Labor (DOL) provides guidance on TDFs in the form of...
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3(38) or 3(21): Which Fiduciary Service Is Right For You?

Want to reduce your fiduciary risk as a plan sponsor? A little outside help can yield big reductions in risk. Here’s a way to think through your options. You’re trying to provide the best for the people on your company’s payroll, and you feel good about your qualified retirement plan. But what’s good for the goose — in this case the plan participants — isn’t all sauce for the gander (the company). As the plan sponsor, the company takes on substantial legal and financial liabilities. If you’re listed as the plan administrator, some of those liabilities accrue to you as well. The law suggeststhat any plan sponsor who does not possess the technical knowledge and experience to manage investments consider hiring an advisor. Your choice of advisor can significantly lower your fiduciary risk. Why Hire a Fiduciary? Hiring an outside fiduciary can reduce some or most of that liability by...
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Financial Wellness and Productivity: Alarming Concerns for 401(k) Plan Sponsors

Financial Wellness and Productivity: Alarming Concerns for 401(k) Plan Sponsors
New insights show that if your employees are worried about personal finances — and they are — you’re losing productivity and risking higher turnover. Employees worried about their personal finances are less productive, more distracted and are easier targets for poachers. While none of that is a revelation, a recent nationwide survey showed just how pervasive financial insecurity is in the workforce and how large the losses and potential risks are for employers at every level. When asked what they feel stressed about, 46% of respondents said personal finances were their No. 1 concern. Other familiar stressors paled in comparison — “my job” at 17%, “relationships” at 15% and “health” at just 14%.  If you have a 401(k) plan advisor or retirement planning professionals who work with your employees, that’s a good start, but the study shows the problem — and effective solutions — go much deeper. Who’s at Risk?...
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When Should Employees Join Your 401(k) Plan?

When Should Employees Join Your 401(k) Plan?
A business’s 321 fiduciary can end up playing several roles. Not only are they expected to act as an advisor, but they also help manage the business’s 401(k) program, mediating between the company and its plan sponsor. Once a business agrees to adopt a particular plan, it becomes the responsibility of a plan administrator to enroll employees. But not all workers will want to participate and those who do will likely have questions, so make sure you have written regulations in place before explaining the plan and accepting signups. Here are a few things to know about eligibility if you’re in charge of your business’s 401(k) plan. Determining Eligibility Eligibility is an important part of setting up a 401(k). It can be tempting to make requirements as flexible as possible so every employee can participate. However, doing so can drive prices up and hurt everyone, including your business, and can...
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Don’t Overlook the 401(k) Plan in a Merger

Don’t Overlook the 401(k) Plan in a Merger
A business merger can be stressful for all involved. In addition to educating and reassuring employees and clients, leaders must exercise proper fiduciary risk management. During the planning phase, it’s important to consider 401(k) plans, which fall under the buyer’s responsibility once the acquisition is complete. For plan sponsors at the acquiring company, it’s crucial to thoroughly investigate the seller’s 401(k) plan to determine whether you want it terminated or merged into your own. Here are a few tips for how to handle a 401(k) during a business merger. When to Adopt During an acquisition, many businesses choose to operate two separate 401(k) plans to ease employees into the new business. Others choose to merge plans, which can create complications, including that any liabilities may fall under the responsibility of the acquiring company’s leadership. If a substantial portion of the seller’s employees remain, this might be the easiest way to...
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