Morningstar Magazine - June/July 2018 - 103

Findley saw early on how retirement-plan clients
needed advice beyond just what to do with
their investments. He recognized that he could
leverage those workplace relationships into
longer-term engagements as plan participants'
financial needs grew more complex.
He courted physicians and executives because
of their high earnings potential, but he
also realized that there were many other attractive
prospects. While he works with about 10,000
retirement-plan participants, he has just 700
financial planning clients. Among his best clients
are nurses, a large chunk of a hospital's workforce.
In a high-cost-of-living locale like Northern
California, these medical professionals can make
$200,000 or more, leaving them plenty of
money to build up sizable wealth. Medical-imaging
specialists and lab technicians also
earn good salaries.
From Retirement Account to Holistic Planning

Initially, Findley met with hospital employees,
helping them navigate their investment
options and aligning portfolios with their goals.

John Findley, CRPC, investment advisor
representative, Lincoln Financial Advisors.
How he caught our eye: Has built a niche
practice focusing on medical professionals in
Northern California.
Career path: Earned a bachelor of science
degree with a concentration in finance
from Indiana University in 1991. Began his career
in financial services with Lincoln National
Life Insurance Co. in Fort Wayne, Ind. Joined
Lincoln Financial Advisors in 1995 and
moved to Northern California in 1996 to work
with medical groups.

But as these doctors, nurses, and technicians
began accumulating sizable nest eggs,
they needed additional guidance. And they turned
to Findley and his team for it.

Company Institute, the average retirement-plan fee
was 102 basis points in large plans in 2009
and 88 basis points in 2015. In some plans, the fee
compression has been even more drastic.

"I've been working with people at this facility since
1995 and during that time, the best clients
have moved from having $100,000 or $200,000
to having $1 million," he says.

"The employer-sponsored plan used to be the bread
and butter of our practice," Findley says.
"It's almost a loss leader now that allows us to get
access to very good asset-management clients."

By financial planning industry standards, the
average account size is fairly modest, at just
$200,000 or so of assets outside clients' retirement
accounts. However, when you add in these
professionals' retirement nest egg, the numbers
start looking decidedly more attractive.

Leveraging Managed Accounts

After establishing relationships with participants
in the workplace, Findley is able to leverage
participants into retail clients once they retire and
must figure out how to create an income stream
from their accumulated assets.
Complex Needs Mean Sophisticated Planning

Findley divides his practice into three service
areas, and he has a different fee structure for each.
First, he helps employees with their retirement
plans through work. Those who want additional
services can hire Findley for customized investment
planning outside their retirement accounts.
Finally, Findley also offers comprehensive financial
planning that includes sophisticated strategies
such as estate planning, gifting, and retirement
income planning.
"When a client turns 59 1∕2, that's a trigger
point for them," he says. "If a client gets
to a certain threshold in value, their retirement
plan isn't robust enough for them."
They have retirement in their sights and are looking
at risk-reduction strategies. They might also need
estate planning and income guarantees.
Findley's services grew organically. However,
it coincided with a long period of fee compression
in the retirement-plan industry, which also
extended into investment management outside
retirement. And fees continue to come down.
According to a study by BrightScope, which tracks
retirement-plan performance, and the Investment

The shift toward investment management and
holistic financial planning is just one of the
big changes Findley implemented. Another was
relying on managed accounts-essentially
mutual fund wrap programs-which he started
using in the late 1990s. But when the tech
market crashed in 2000, clients got skittish and
wanted out. He didn't try managed accounts
again until 2007, when a host of new products
with more diversified investment options
became available.
Findley now uses programs from Envestnet and
Morningstar Managed Portfolios. About $40 million
of his clients' assets are managed this way,
with the majority invested in actively managed
funds, which he believes have a greater
ability to participate on the upside, while limiting
losses on the downside. Clients who have a higher
net worth can opt out of the managed portfolios.
Findley says he started using the managed
accounts because they give clients
access to top-notch fund picks, something he's
not able to do on his own, given his other
client responsibilities.
"There's no way I can look at a client in the eye and
say I'm going to pick the best funds if I'm in 15
meetings a day," he says. Providers "track and rank
the funds. They hire and fire the managers."
In contrast, Findley says, his job is to understand
his clients, their families, and their goals so
he can steer them toward the most appropriate
portfolio. Focusing on where his clients
need guidance most has helped Findley navigate
the changing tides. K
Ilana Polyak is a freelance financial journalist.

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