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Welcome to VisionPoint Advisory Services
I want to talk about the “why” of this firm and what we intend to bring to the marketplace. I think it best to first talk about where we are today…as employees, as employers, as Americans!
For several years now it has been apparent to me and to my peers who also advise 401k plans that almost all plan participants we encounter are not saving enough to retire at the time and income level they would like to.
Further, many financial commentators have brought attention to the fact that 70% of Americans live paycheck to paycheck. The average American sends 24% of their income to visa/master card each month. 2/3 of Americans cannot come up with $1,000 for an emergency without borrowing. All of which results in the typical benefit from a 401k plan to be about $400 per month…certainly not enough to have any kind of meaningful retirement
So how are employees reacting to this? Financial stress is making employees significantly disengaged in their jobs. Employees are changing jobs more frequently, thinking earning more is the solution to future financial stability. Employees are staying in their jobs longer, increasing insurance and other costs while decreasing overall productivity. All of this in arguably the richest country in the world.
At the same time 401k plans are offered by most employers of any size. And yet we see these companies installing these plans…
Because they think they need to n order to keep up with the competition…without ever really knowing what the competition is doing…without ever having a discussion – much less defining an intended result about when they would like their employees to retire…
And we can see from virtually any 5500 – the form plans file with the department of labor each year that companies are making
- Employer contributions
- Employees are deferring portions of their pay into their plans
- Investment management, recordkeeping, advisory and sometimes audit fees are being piad
Whether the total of these expenditures is $80,000 or $8,000,000 …it is a lot of money to that company…and yet almost always there is no conversation as to how this spend is going to impact profitability! At the risk of sounding harsh, I think this is crazy!!
Tune into our next podcast and we will start to layout our approach to these challenges.
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