|By Mara Lee, The Hartford Courant|
|McClatchy-Tribune Information Services|
But while the company, owned by eight partners, aims to increase its revenues by 12 percent a year, the first bullet point on the business goals at every retreat is: "Don't lose any clients."
Over the past five years, the business has grown 19 percent on average annually.
Wetzel and 13 others left UBS in
Fiduciary, in plain English, means the workers at FIA promise to give advice that serves the clients, not themselves.
You might think that it would be in a firm's interest to put its clients' interests first, to get repeat business, but the cautionary tale of
In addition to its fiduciary promise, FIA doesn't get more money for putting clients into certain types of investments, or placing their 401(k)s with certain providers. Generally, the firm charges for the amount of time it thinks each task will take.
By the time FIA had been open 20 months, it had 106 clients. At the end of 2013, it had 280. In its seven-year-plus history, it has lost eight or nine accounts, mostly because of mergers, Wetzel said. Not only has it increased its client count by more than 2.5 times since the end of its first full year of business, it has quadrupled the assets under management over those six years.
About 37 percent of the
"In the last three years we added 60 colleges and universities," Wetzel said. "All of them all of a sudden needed assistance."
The amount of assets FIA handles for wealthy families is a small part of the total, but, Wetzel said, "We expect that to grow significantly. We're just building out that team to service it."
Wetzel gave an example of one family, where five young adults have each inherited
FIA expects to hire five people this year, which would result in a staff of 47. That's 30 more than worked at the firm at the end of 2007.
For jobs below the consultant level, COO
The most complicated jobs for FIA are when a company decides to get rid of its pension. About 34 percent of the assets it handles are in pensions. While some companies just stop putting money into the pension but still intend to pay truncated benefits when its workers retire, others want to exit entirely, either by moving the assets to an insurance company or by distributing lump sums.
Traditionally, the company had put about 5 percent of payroll into the pension, but as the market dived, the company would have had to put in 10 percent to 15 percent for several years to get the plan properly funded.
Bibbo said his consultant from FIA gave him all the facts to present to the management team. The consultant convinced them "we could implement a 401(k) plan with really good benefits and free up the company from this drain."
There were so many things to decide: what providers to choose, whether to use an opt-out sign-up for employees, whether to implement automatic escalation. In the end, they chose opt-out, and just one employee isn't saving for retirement.
The company match was the decision that matters most to the bottom line.
"I actually wanted 6 percent," Bibbo said. The FIA consultant "educated me why 3 percent during the year and 3 percent at the end of the year" would be better for the company. The end-of-year contribution is discretionary, not promised, and goes to all workers no matter how much they contribute. The 3 percent during the year is a 50 percent match for a worker's contribution of 6 percent of pay.
Bibbo said he had wanted a 6 percent match because "I wanted to make sure I gave enough to the employees, because we just took away a pension plan."
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