I can’t believe that I am admitting this, but there was a period in my life when I used to watch Judge Judy…a lot. Not in a way that I expected it would confer upon me some ability to practice law. But more for the psychology. I found it very interesting the interactions between the plaintiff and defendant; between Judge Judy and Byrd the Bailiff; Judge Judy and the litigants. The interactions intrigued me.
This is the second time that I have admitted this in a professional setting. The first time was when I was sitting with a plan sponsor and an advisor. We were discussing fiduciary responsibility, 404(c), and my firm’s process. For whatever reason, we didn’t seem to be clicking. The CFO was giving us all kinds of signs that he wasn’t interested and that our meeting was a complete waste of time. When it came time to discuss the documentation of process, there was no attempt to conceal the groan. The advisor kicked me under the table, expecting me to get this meeting back on track. I’m not sure how my bruised shin was going to fix anything. But I got the point. After all, he had flown to Wisconsin from New York just for this presentation.
Maybe it was panic, or maybe it was divine intervention; for whatever reason, I blurted out that I watched Judge Judy. In my entire career, I have never seen a situation flip that fast. The CFO unfolded his arms, sat forward, and said, “Me, too. Did you know that there are three hours on daily? I DVR it and watch while I am doing my workout in the evening.”
From there I talked about how any time a party claimed that he had done something, like he had paid a loan or entered into an agreement, the first thing that Judge Judy would say is-
“Prove it,” the CFO interrupted.
Indeed, prove it. As I have continued through many more sales meetings, it has always struck me that we tend not to provide the data to support our claims as often as we should. Frequently, we make pitches to our clients using anecdotal evidence. “It seems to me based on certain interactions that we should do…
” Every time I hear it, I think, “Prove it.”
As we brace for the looming fiduciary re-proposal and continue to gird ourselves from the continued media lashing regarding bad plans (like this gem), we need to think as an industry about how we can make better recommendations and have the data to support them. We have a commitment to our clients. We strive to provide great service and to meet participants’ needs of saving for retirement. Whether we say it or not, most of us put the needs of our clients first. But we have historically not done a good job in supporting participant activities with data. We need to think about what we can add to the file to support our actions and recommendations.
Think about the last fund review that you did for a qualified plan. Think about all of the analytical data that went into that report: expense ratios, sharpe ratios, overlap analysis, style drift, performance relative to the peer group, sector benchmarks, etc. Now think about the education that the participants receive. How much data goes into the recommendations for that aspect of the plan? After all, the best built portfolio is useless if employees are not participating or choose to keep their money in a money market/fixed option.
Imagine how much more engaged the participants could be if the education package was tailored around empirical data that shows you what they want? And imagine how much more powerful that data set would be if you could also include interactions from the other covered service providers on a plan? Imagine how many fewer eyerolls we would get at meetings if our subject matter was something the participants wanted instead of a market recap.