Not necessarily. According to Meghaan Lurtz, Ph.D., a leading global expert on the psychology of financial planning, this can be a sign of looming danger for your relationship.

Fix, Fine, Flourish: How (and Why) Clients Fall Out of Love With You

In her recent article on Michael Kitces’ blog entitled Fix, Fine, Flourish: A Framework To Take Clients From (Just) “Fine” Stagnancy To Being Engaged Again, Lurtz breaks down a typical client’s journey into three stages.

The first stage is “Fix.” Clients seek out a financial advisor when they have immediate financial concerns to address, and as their chosen expert, you’re able to gain their trust and gratitude in this phase by helping them to stabilize their financial situation and set themselves up for a lucrative future. Nice work!

The second stage is “Fine.” Once a client’s initial issues are resolved, they transition into the “Fine” stage, where you’re likely to hear:

“Nope, don’t need anything!”

“Everything’s still good!”

“Don’t call me, I’ll call you.”

These are the words of a satisfied and seemingly stable client. You’ve resolved their most pressing financial concerns; what more could they want?

A lot, actually. In fact, they don’t just want more from you—they need more, or they’re likely to leave after their upteenth “fine” monitoring meeting. 

What Your “Fine” Clients Are Actually Thinking

No matter how impressed or satisfied your clients were in their “Fix” stage, the farther they travel into “Fine,” those feelings will start to dwindle. With no new problems to resolve for your clients, you’ll have no way to continue proving your worth, and they’ll naturally start to value you less, weakening your relationship.

And then, one day, you might find yourself blindsided by a “fine” client dropping you to manage their finances independently. Why should they retain a financial advisor who, in their opinion, isn’t needed anymore?

According to Lurtz, the psychological underpinnings of this “fine” complacency lie in the end of history illusion. This cognitive bias leads individuals to believe they’ve reached a stable point in their lives, whilst vastly underestimating the likelihood of future changes. Research involving over 19,000 participants from ages 18 to 68 reinforced this; though participants generally acknowledged that significant change had occurred in the past, they believed relatively little would change in the future, regardless of their age. This distorted perception limits our ability to envision new goals and opportunities, even as our life circumstances, interests, and aspirations continue to evolve.

So, even if a client came to you just a year ago with a mountain of financial issues to address, they may genuinely not anticipate that ever happening again, and thus not see the need to stay on as a client.

How to Become Invaluable to Your Clients—Indefinitely

The “end of history” illusion is a huge detriment when clients see their financial advisor as a simple problem-solver—which they likely do, given that this was the nature of your relationship through the “Fix” phase. (You “fixed” their problems, and now they’re “fine.”)

The key to becoming an invaluable asset to your clients is to establish yourself as someone who helps motivated business owners reach their goals, rather than someone who just manages their money.

By educating your clients on the importance of proactive financial planning, you can open up an endless amount of opportunities for your relationship to thrive.

This brings us to the third (often skipped) stage of the client journey: “Flourish.”

Turn Your “Fine” Meetings Into an Endless Stream of Client Wins

In the last stage of her “Fix, Fine, Flourish” framework, Lurtz encourages advisors to take their check-in meetings from mere progress monitoring to “Flourish Meetings,” where you prioritize the client’s discovery, reflection, and growth.

An easy way to make this pivot is by asking your client reflective questions that delve into their evolving goals and aspirations:

• What significant changes have occurred in your life or business since our last meeting?
• What changes would make you feel more fulfilled?
• What are the biggest challenges in your business today?

Come prepared with a library of solutions to propel your clients toward their goals. Here are just a few that our top advisors have used to “wow” their clientele:

1. Client Goal: “I’d like to retain my talent for as long as possible.”

Financial Advisor Solution: “Small businesses have to get creative to compete with larger companies’ salaries and benefits packages. Have you heard about student loan matching?”

SECURE 2.0’s student loan matching provision is a game-changer for business owners. Employers can now match employee student loan payments with 401(k) contributions, even if the employee isn’t contributing themselves. This tackles the tough choice between paying down debt and saving for retirement.

Employees will love the early start to retirement savings and increased financial security, and employers will love the boost in talent retention and employee morale.

2. Client Goal: “I wish I had better retirement planning options for myself, but it is what it is.”

Financial Advisor Solution: “Actually, there’s an excellent option for business owners that I don’t think we’ve discussed yet. Have you heard of cash balance plans?”

Cash balance plans promise a specific benefit amount at retirement, which can be taken as a lump sum or moved into an annuity for regular monthly income. The employer makes all contributions based on an actuarial formula (percentage of pay or a fixed amount). Employees don’t contribute.

This is often favored by business owners due to potentially higher contribution limits than traditional defined contribution plans. Plus, it can be combined with a profit-sharing 401(k) plan to benefit all employees.

If you want to learn more about cash balance plans (and earn CE credit for it), register for our upcoming webinar with NAPA on April 2, 2025.

3. Client Goal: “I wish I could find more quality hires.”

Financial Advisor Solution: “Fifty-seven percent of millennials said they’d feel less stressed if their employer offered financial wellness benefits. Have you heard of Roth employer matching?”

Roth employer matching is a powerful option for business owners looking to attract younger employees who anticipate higher future incomes. It allows employees to contribute after-tax dollars, ensuring tax-free growth and withdrawals in retirement.

Want More Ways to Help Your Clients Flourish?

By embracing the “Fix, Fine, Flourish” framework, encouraging your clients to think proactively about their finances, and offering a variety of services to reach their goals, you can transform “fine” clients into engaged, loyal partners.

If 401(k) offerings aren’t in your reengagement library yet, contact us. We’d love to help you overdeliver to your clients through every step of your relationship.

The post Why Happy Clients Ditch Their Financial Advisors (and 3 Ways to Re-Engage Them) appeared first on Fast and Affordable 401k for growing businesses.

Here at 401GO, we provide a valuable service to small business owners by providing them with an easy, affordable way to offer their employees a 401(k) plan. Many of these small businesses rely on the services of a financial advisor to help them navigate the seemingly convoluted path of investing. With 401GO, financial advisors can choose between built-in or outside 3(38) fiduciary services.

Built-in 3(38): How Does It Work?

As with any career, being a financial advisor comes with pros and cons. Finance is an exciting field, but that excitement comes with a price: risk. Depending on a number of factors, including the types and numbers of clients you have, your expertise and experience in various areas of finance, your comfort level taking on certain challenges and assuming risk, and your ability to weather the storms that are part of the finance and business landscape, you may prefer to delegate the task of assuming some of that risk to our 401GO advisor.

We operate a robo-advisor that financial advisors can count on to select and execute investments on their behalf. Our advisor fulfills all the requirements necessary to act as your client’s 3(38). Our 3(38) creates a robust and affordable fund lineup, saving them (and you) money, time and risk.

Selecting funds and managing investments isn’t easy — if it was, anyone could do it. But just anyone can’t do it — in fact, they’re not even allowed to, since ERISA was written to protect companies and individuals from devastating losses incurred through mismanagement due to inexperience, ignorance, genuine errors and, as much as possible, intentional fraud.

In selecting investment lineups for your clients, our financial advisor ensures they are:

• Astutely chosen — Financial advisors can count on the experience and professionalism of our 3(38) services. We’re here to assume the risk and take some of the work off your plate.
• Economical — The services you perform for your clients saves them money, and the services you receive from the GO Invest advisor saves you money. The more you save, the more competitive your rates can be, and the more your bottom line can grow.
• Diversified — Diversification in a retirement portfolio or under ERISA 3(38) fiduciary rules involves spreading investments across different asset classes, industry sectors and geographic regions, to reduce risk. This strategy aims to protect against market volatility and large losses. Fiduciaries must ensure that plan investments are diversified to fulfill their obligations and provide participants with a range of investment options.

Additionally, GO Invest reviews all investment options quarterly and adjusts them as needed to maintain a healthy lineup.

Acting as a 3(38) Fiduciary

As much as financial advisors love the built-in advisor option for its flexibility, efficiency and reliability, there are times when you may want to assume the 3(38) role yourself and create custom fund lineups using our proprietary fund builder. This allows you to play more of an active role, keep more control and take the reins of your clients’ investments, managing their assets on their behalf.

While some financial advisors are content in a 3(21) role in which they are limited to offering advice and making suggestions to the plan sponsor, taking on a 3(38) role gives you the added responsibility of selecting the investments. For some financial advisors, taking on this role gives them valuable experience and helps build skills that they can parlay into growing their business. Others who go this route have worked as financial advisors for many years and are comfortable in the role of a 3(38), thus, they do not have the worry of finding enough time and resources to fulfill their clients’ needs, because they already are well-versed in this area.

A Third Option: 3(38) Partnerships

Yet another valuable option 401GO provides its clients is the opportunity to partner with a third party who can act as a 3(38). With this option, you can provide your clients 3(38) service without having to furnish that service yourself. This is a perfect hybrid option for financial advisors who want to keep as much control as possible without having to devote the necessary time and effort to deliver the complete services your clients need.

Our 3(38) partners specialize in creating investment lineups and keeping them updated and tidy.

You can suggest and select investments for your clients, but instead of implementing the investments yourself, you may choose to partner with one of our third parties. As much as so many of us have come to love the automated services that make our daily lives so much easier — like the 3(38) services provided by GO Invest — we know that some people still like dealing with individuals, and for them, we offer our third-party service for a small additional fee.

401GO: More Choices for 3(38) Services

At 401GO, we offer our clients so many choices because we want them to have the flexibility to manage their clients’ investments in the manner that suits them best. Whether you prefer to act as your clients’ 3(38) or to outsource this service, we want you to know that when you work with 401GO, you have that choice. 401GO saves you — and your clients — time and money.

The post Built-In 3(38) or Optional Outside 3(38) Fiduciary Services? appeared first on Fast and Affordable 401k for growing businesses.

Why Roth IRAs?

Some people wonder why, if an employee has access to a traditional 401(k) plan, they would opt to open a Roth IRA as well. The main advantage for investors is that contributions to a Roth IRA are taxed as they are made, meaning that once the investor reaches retirement age and starts drawing on these benefits, they are tax-free. This is attractive to investors for a number of reasons. One is that if you start making contributions to a Roth IRA when you are just entering the workforce in your 20s and are likely in a lower tax bracket, you will save money later when you retire in a higher tax bracket.

Originally, when Roth IRAs became available in 1997, there were a lot more rules and a lot fewer options. Later, in 2006, the government made Roth 401(k)s available, and now many employers offer traditional and Roth 401(k)s.

The New IRS Regulation: Secure 2.0

Until now, employees and employers alike have been familiar with the drill — traditional 401(k) contributions are deducted before payroll taxes are taken out and Roth contributions are done after. Now, with Secure 2.0, the employer can contribute to the employee’s Roth account, after taxes, if the employee so chooses this option. This new feature can add up to significant savings as well as earnings for the employee, depending upon the size of the employer match and the number of years the employee can take advantage of this new law.

One important caveat is that employees must be fully vested in the plan in order to benefit from taxed employer contributions. Whether you’re a startup or a long-standing company that is just now beginning to offer a 401(k) plan or IRA to your employees, your vesting schedule matters — to your employees and to you. Common vesting schedules are between two and five years. When you’re thinking about offering the Secure 2.0 Roth option, you’ll want to consider your typical employee’s longevity with the company and the vesting schedule you’ve chosen. This will help you determine if it makes sense to offer Roth matching. If, over the years, the majority of your employees leave for other opportunities before they are fully invested, this option might not be for you.

If you decide that Roth matching contributions would be valuable to offer your employees, you must set up a system by which the taxes owed on these contributions come out of the employee’s paycheck. Falling behind on paying these taxes or allowing any lapse or lag can result in fines and penalties levied by the IRS.

The changes included in Secure 2.0 also apply to both SIMPLE and SEP IRAs. Previously, employees and employers could only contribute pre-tax dollars to these accounts.

If you determine that your employees could benefit from the Roth provisions of Secure 2.0, you must take action to amend your plan before attempting to implement the changes to the program. Your financial advisor should be able to help you with the details of the transaction.

Why Secure 2.0?

You may wonder why the IRS has gone to the trouble of creating this new regulation. According to a CBS News report in March of 2023, the IRS currently has a backlog of 10 million tax returns. Getting a live employee at the IRS on the phone is an almost unheard-of achievement these days. Yet they have time to create new regulations to benefit Americans.

They do, but keep in mind — this regulation will benefit the government too. When employee investors choose to receive employer contributions to their Roth accounts, the government immediately begins collecting taxes from them, thereby sweetening the pot sooner rather than later.

It’s important to remember this when it comes time to implement this new benefit at your workplace. That’s when you may notice some ambiguities regarding this new regulation. For instance, does an employee have to be 100% vested at the time the employer contributions begin, or can they start earlier in the same calendar year? Can the employee transfer employer contributions from a traditional 401(k) to a Roth account after becoming fully vested?

Even without these ambiguities, the new rules will create more paperwork for small business owners. However, it may be well worth it. After all, offering a 401(k) plan is extra work too — like anything that is worth having. And being able to offer your employees more options to save more to invest in their retirement can only make you more attractive as an employer.

Stay up to date on important changes like this by bookmarking 401GO’s blog page — it’s your source for useful, practical — and lucrative — information about retirement investing for small business owners.

The post New Roth Employer Contributions Law appeared first on Fast and Affordable 401k for growing businesses.

401GO offers a group 401(k) plan called Syndicate. This product comes with many attractive features for the organization, the business owner as well as the participants.

Feature 1: No Cost to the Sponsoring Organization

Most group retirement plans come with big expenses. They can cost thousands of dollars to set up and maintain. A Syndicate costs the sponsoring organization nothing, giving you a free benefit to utilize to help attract businesses to your group.

For businesses, their costs are some of the lowest in the industry. They’ll only pay a small base fee, plus a low fee per active participant (not per employee!), so they won’t pay for employees who are not using the plan. And, the pooled pricing available using a group plan means businesses can get much lower pricing through your organization than they could find anywhere on their own.

Pooled pricing is the biggest advantage for businesses to join the group plan. Taking advantage of economies of scale, employers can receive pricing as low as $4/participant.

Feature 2: Extremely Fast Setup Time

Most group plans take weeks, even months, to set up. A Syndicate can be up and running the same day.

It’s a game-changer for organizations who are anxious to get started.

Employers can set up their plans quickly too. Using our automated setup process, they can complete their onboarding process in just 15 minutes, and have a plan in place that is ready to use. Compare that to legacy providers, who often require 4-6 weeks to get a plan started.

This is particularly valuable for participants. Using our guided strategy builder, employees spend just 5 minutes answering a few questions about their time horizon and risk tolerance, and we help them build a customized portfolio that will suit their needs perfectly. They can make changes to the portfolio at any time.

Feature 3: No Fiduciary Liability

The sponsoring organization incurs no fiduciary liability or responsibility for plan management at all. 401GO provides the investment lineup, and individual businesses provide a sponsor for their plan, so that responsibility remains with the business owners, and not with the association or chamber.

While each business will need to provide a plan sponsor to carry the responsibility for their plan, most of the work is outsourced, so the only job business owners (and their admins) need to do is oversee that work is being done appropriately. This is made easy on the 401GO portal, which comes with reporting to provide awareness.

Feature 4: No Administrative Duties

All the day-to-day work of managing a group retirement plan is offloaded to 401GO. We manage the contributions and distributions, we provide employee notifications, we monitor compliance and file required reports, we provide customer support, and our partner Matrix Trust holds the plan assets.

None of this work will need to be performed by either the sponsoring organization or the individual businesses. Once setup is completed, the only work typically required of business owners is an annual review to ensure information is accurate and up to date, which takes about 10 minutes.

Feature 5: Co-Branding for Organization Recognition

A Syndicate plan comes with co-branding opportunities, so that when business owners and their employees log in to their accounts, they will see the logo of the sponsoring organization. This lends credibility to your organization, and helps remind the business owner of the valuable benefit they are receiving.

A Step Above Traditional Group Plans

If you’re researching the benefits of a group 401(k) plan for your organization, consider these important plan design features.

• Does the plan require specific design features of participating employers?
• Does the plan come with complications that cause difficulty for employers, employees or admins?
• Does the plan require employers to be connected in some way?
• Does the plan require admin work to be done by the sponsoring organization?
• Does the plan require the businesses to be a certain size?

Syndicate doesn’t. It doesn’t require specific design features, complications, business sizes or connections. And it requires no work by the sponsoring organization.

401GO aims to be your preferred partner in retirement planning. We’ve developed our platform to be automated, easy to use and smart, so that it meets the needs of every small business, their employees, and the organizations they belong to.

Talk to us today about how we can benefit your team.

The post 5 Reasons to Offer a Group 401(k) Plan to Your Organization appeared first on Fast and Affordable 401k for growing businesses.