What About the Endgame?

“Shouldn’t the Fiduciary Reg (“The Reg”) debate be about more than costs and workflow changes?”

The media coverage of the final release of the Fiduciary Regulation has been nothing short of extraordinary. Media outlets, law firms and service providers are providing daily interpretations of “The Reg” – how service providers should respond to it; what elements were missed or should be changed; calls for delays in implementation and estimates of the cost impacts and more.

The issue that has not received enough coverage (in my opinion) is how much impact The Reg will have on helping participants/investors achieve improved retirement outcomes. The story that follows refocused me on the “endgame” – Why we are involved in retirement industry in the first place. I can only hope that it does the same for others that read this blog.

Several weeks ago I attended a retirement party for a former boss that I had worked for in the 90s. I’d spent six years at this firm which largely serviced the financial services industry in the area of print-mail. We were responsible for a large portion of the statements, confirms, tax forms, annual reports and marketing pieces that you likely received from your bank, brokerage or mutual fund company. It was an interesting firm because I was there as the transition from print to electronic was picking up steam. We had a rapidly growing technology group and we also had a very large manufacturing facility where the mail was made. I was the Director of Strategic Applications. This meant I oversaw a tech team that worked on newer applications and the firm’s largest clients. On the larger clients, I had cradle to grave responsibility – my developers would write the code, my service/operations people would oversee the ordering of materials, printing and finally the mailing. I interacted with all areas of the company and this is where the story really begins.

Bob (not his real name) worked in the mail manufacturing facility and was the guy that made sure every piece of material that was created in the print shop found its way into an envelope or box. From there he ensured they made their way onto one of the waiting 18 wheelers that were always running from the facility to the USPS. He was a big guy in his mid-40’s that had served in the military but would disarm you with his bright blue eyes and big smile. He had a tough exterior but a heart of gold and was often seen tearing up at company events. For Star Trek fans, he was like an Eastern European Scotty – just change the “Captain, I don’t think the engines can take it” to “Craig, there is no way we can move 700,000 mail pieces by Friday”. In both cases, the warning of potential failure was almost always replaced with improbable success.

One day Bob and I were sitting on a skid of paper waiting for something to come out of the print shop. We started talking about what we wanted to do in the future. Bob expressed a desire to be able to stop working and do the things he enjoyed in life. I asked him if he was participating in the company’s extremely generous 401(k) and he said “No”. I asked “Why Not?” and he explained that he had bills to pay and it frankly wasn’t a day to day priority. I talked to him for 20-30 minutes about how investing in a 401(k) worked, that a match was essentially “free money” and that lost time would be very difficult to make up. Eventually he conceded that he could shift some things around to begin saving. So, I walked him over the HR Office, helped him complete the forms and gave him some very basic guidance on asset allocation and funds. He thanked me for the help and then we went back to work without either one of us knowing how important this moment would be 18 years later.

Fast forward 18 years – I am really enjoying the retirement party and seeing all my old colleagues. We had worked really hard and had a lot of fun all those years ago, so many of them were like family to me. We caught up on what had happened to us over the years – our families, our careers and the statuses of those that were not present. Towards the end of the party I glanced over and saw Bob – he was virtually the same – with his big smile and he was shedding a tear as he reminisced with someone. I went over to him. It took a moment for him to recognize me but then he greeted me with a huge smile and a big handshake. We reconnected and then suddenly his face changed from happy to serious. He said “Craig, I want to thank you. The day you helped me with my 401(k) changed my life and my family’s life. I am 67 now and I am going to be able to retire because of what you did for me.” He called his wife and daughter over and said “This is Craig. He helped me with my 401(k) and that is why I am going to be able to retire.” I told Bob and his family that it wasn’t a big deal. I was just helping out. But honestly, I was truly speechless. We went on to say our goodbyes and Bob wrapped his arms around me, gave me a huge hug and said “I will never be able to thank you for what you did for me. I love you man.” And with that Bob walked away. I had trouble catching my breath and suddenly I was the one with tears in my eyes. I walked back to the table where my wife and friends were sitting and I had a hard time getting through the story as I told them what had happened.

There are tens of millions of “Bobs” in this country. Getting them to a successful retirement plan shouldn’t be the result of a happenstance meeting with someone that knows and cares enough to help. I am not in any way suggesting that the impact of “The Reg” on service providers is not substantial. What I am suggesting however is that maybe we should give at least equal time to how the IMPACT of The REG can be IMPACTFUL on improving retirement outcomes for all of the “Bobs” out there. This should be the ultimate endgame.