I always believe that the retirement plan business is a relationship driven business. It's also a small world of industry where providers know providers nationwide. This belief has certainly helped my law firm practice grow as I've always had an open door policy in fielding questions from financial advisors and third party administrators without nickel and diming them with invoices for services provided.
The problem with any relationship is that it will conclude at one point and knowing when it's over.
When I started my law firm practice 6 years ago, one of my marketing campaigns is when I advertised my legal services for financial advisors and third party administrators (TPAs) where I would charge a flat fee such as $500-$1,0000 per month in providing general ERISA legal advice. While I haven't advertised this service as much as I should, I have three financial advisory fees and one TPA that pay that fee.
The first client I ever signed up for that fee was a TPA who eventually thought so much of my work and used my services, that they upped their payment to $2,000 a month. Through some of the projects I worked with them, they became my biggest client in 2012. The owner of the TPA said we'd be rich with his plans for plan design.
When it came time to restating their defined benefit clients for the EGTTRA restatements that were that April 30
th, they needed my services and I performed around 40 restatements in less than two weeks time. The $40,000 I billed was around 2.5 times what I normally billed per month.
Billing $40,000 that month for that TPA client was amazing and it would have been more amazing if I actually collected that money. You see, the TPA was claiming that because of infighting with key employees that left the firm, they would have a hard time in paying that bill all at once.
I'm not a stubborn man when it comes to business relationships, so I'd let them float as long as they gave me work. Pretty soon after that, they couldn't pay the $2,000 a month anymore. A reasonable businessperson would have referred the matter to collections, but I wasn't reasonable because I thought that relationship was more important.
When Hurricane Sandy destroyed almost half my home, I was nearly broke. It happens when you have no flood insurance. So I reached out to this TPA and asked whether I'd get paid. I was told I would.
Thanks to the generosity of the Federal Government and whatever savings I had left, we were able to rebuild better than ever. I was chasing that TPA with phone calls and messages on whether there was going to be further work for me. I was promised there would be. But my biggest client in 2011 and 2012 was becoming a client where there were no fees coming in for 2013 and 2014 from them. I should have referred the matter out to collection, but I still felt like the relationship mattered and that there were fees that were going to eventually come my way.
In late 2015, they referred me a client that needed to restate their 401(k) plan. I did the work in July and finalized all the work in January. I still haven't paid in full from their client. So my deadbeat client was referring me more deadbeat clients.
A few weeks back, I texted the owner of the TPA that maybe it was best to go our separate ways and that I refer the matter to collections. He promised to call Washington's Birthday, He always promised to call, he rarely did, Weeks would go by where he would promise to call every other day and months would go by before we ever talked and he never seemed to want to talk about the money he owed me.
I knew he wasn't going to call President's Day and he didn't. I finally referred the matter to collections last week. Once I referred the matter to collections, I felt 1,000 pounds off weight lifted off my shoulder. Of course, I'm beating myself for not seeking the money a few years back, but I thought I was doing the right thing with a business partner. You can bend over backwards for people and there were always be that one or two people who will take advantage of that. The problem is identifying those people and when to end it.
In the end, it's all about teaching a lesson. You do good work, you deserve get paid. Excuses and promises are nice, but they don't pay your expenses. Don't be like me,; pull the plug before 4 years pass by.
A checklist is an informational aid that is used to reduce failure by compensating for the lack of memory and attention of people. It also helps to ensure consistency and completeness in carrying out a task. I've learned the need for checklist as my memory is stretched with the tasks of being a solo lawyer, father, and husband. A checklist is essential for aviation safety as it's used for pre-flight and for certain safety situation in-flight. For example, during the "Miracle on the Hudson" of US Airways 1549, the co-pilot had to go over three-page emergency procedures checklist in an attempt to restart the engines immediately after the multiple bird strike caused the thrust to be lost. As a financial advisor, you need to identify what you need to run a retirement plan advisory practice. So this article is all about letting the financial advisor know what they need for their practice and where to find it.
It should come as no surprise that the Senate and the House of Representatives are trying to do their best to make sure that the Department of Labor (DOL) is thwarted with implementing a fiduciary rule for retirement plan and individual retirement accounts.
I always say that as bad as 401(k) plans may be, 403(b) plans are in much worse shape. It didn't help that the Internal Revenue Service only issued regulations that governed them only 30 years too late, back in 2008. It also doesn't help that still many 403(b) plans (such as those that offer deferral contributions only) and governmental plans aren't subject to the Department of Labor's oversight under ERISA.
I always talk about my open door policy with financial advisors and third party advisors where I will help these plan providers out without me actively seeking their business. I kind of have that liberty because it's my own law practice and I don't have the stress to bill when everything at the end of the month is mine anyway.
If you are a plan sponsor or a plan provider looking for an inexpensive plan restatement, then look no further than The Rosenbaum Law Firm P.C. If you are a third party administrator with too many restatements to do and too little help to get the job done by April, we're here as well.
