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Rules For Life and 401k advisors as well

Rules For Life and 401k advisors as well

| February 28, 2024

I came across these Rules For Life and found myself reflecting on 18 years as 401k advisor.

Rule #1: I started my practice with an idea of the market I wanted to serve (values driven businesses and non-profits) but not necessarily a clear vision as to how to get in front of them. There were any number of missteps (and outright failures) along the way. But with each failure (ie, misreading the plan sponsor/ their values and overpricing my bid on a $30 million plan), I learned and got better. Each failure was an opportunity to improve.

#2: Life as self-employed solo 401k practitioner is hard. There is no guaranteed paycheck. No expense accounts. The hours are long and the fees can be low compared to other financial advisory arenas. The only guarantee is that your bills will keep coming in. But if you don't try, you will never succeed. Hockey great Wayne Gretzky said it best. You miss 100% of the shots you do not take. It has been a hair-raising 18 years but I would not have it any other way.

#3: Under-promise and over-deliver. This is a given in all aspects of life but is particularly true in the 401k space. You want to takeover an existing 401k plan, replacing the advisor and/ or record keeper and TPA? What are you going to do that is better? How are you going to deliver on your "better"?

#4: I am learning this one as I start to look towards retirement in 10 - 15 years. Who will take over my practice? My son, James? How do I teach him what I do intuitively based on 18 years of practice as well as 34 years of industry experience? I need to write everything down and explain it so he gets it.

#5: The trick to #5 is to figure question everything in a polite manner. No one likes a know-it-all or someone who asks questions without thinking. I have had to learn this the hard way.

#6: Yes, I can kick myself for overbidding that $30MM plan. I really could have used that business back then. Or I can learn from the experience and move on. If need be, kick yourself and then move on. But don't keep kicking yourself.

#7: Analysis paralysis. Information constipation. Realize that you will never have all the facts and figures at your disposal. You must make decisions based the cards you are dealt and what you can infer. Right or wrong, make a decision and learn.

#8: I remember my first 401k conference. I was 44 years old and feeling pretty good about my practice. I then sat down next to a 25-year-old who told me he managed a $1 billion plan. Ok. Right. Where did I go wrong? But then I realized, there will always be someone who seems to be doing better than you. Try this instead. Compare your performance now to how you did last year or even yesterday. Try to improve each day. Don't focus on others. Focus on yourself.

And on that happy note, upwards, onwards, outwards, and always, inwards.