The question of retirement is one of the biggest issues facing our society today. It’s part of the healthcare debate when the subject is Medicare and Medicaid. It’s a factor in discussions about the federal deficit and funding the Social Security system. It’s the unacknowledged presence in the unemployment picture–more and more people feel they can’t afford to retire, at least not fully.
More than ever the need for help with retirement planning is what drives individuals and businesses into the offices of advisors. If the advisory firm they turn to is Rehmann (pronounced RAY-man) Financial in Michigan, then Gerald Wernette is likely to be the man behind the help they receive.
Wernette has been with the firm for 26 years and joined when Rehmann, one of the largest CPA and business-consulting firms in the Midwest, only had two offices and about 65 employees. Today there are nine offices throughout the state, four more in Florida, and more than 600 professionals on its payroll. Rehmann has four divisions: Rehmann Robson, certified public accountants; Rehmann Consulting, business management advisors; Rehmann Financial, comprehensive financial planning; and Kerby, Bailey and Associates, professional investigation and security consulting.
“We were what I would label a traditional tax accounting auditing firm with a very entrepreneurial spirit,” Wernette recalls. “That spirit was driving a lot of ancillary services, mainly in the consulting realm, and as the firm grew, it grew both through internal client growth and through mergers throughout the state of Michigan.”
One of those mergers in the late ’90s was with a firm that had a healthcare accounting practice. Up until then, Wernette says that Rehmann’s principals had been trying to figure out how they could position the firm to deliver a whole realm of financial services, not just traditional accounting services. “Over time, we kind of cracked the nut, if you will, on delivering financial services in an accounting practice and being able to team up with the accountants and that trusted relationship that they have with their clients and connect the dots on the financial services side. Rather quickly word got out and we started to add advisors around the state that saw the vision. We started to develop services that we were bringing to our customers whether it was in the wealth management or the retirement plan arena.”
Wernette’s role in the firm had been managing a third-party-administration (TPA) practice specializing in retirement under the consulting umbrella in Rehmann’s accounting practice. In January 2006, that practice was merged into Rehmann Financial, “combining that with what we were doing on the advisory side for retirement plans and turning it into a robust, full service retirement plan consulting administration and investment advisory practice,” says Wernette. “Our retirement plan practice in conjunction with our wealth management practice continues to draw a lot of attention in the accounting and the financial services professions as we’ve been moving around the country and telling our story to different firms and advisors. We seem to have developed a formula that’s really working for us.” (For those advisors thinking of getting into retirement plan consulting, Wernette has some specific advice: see the “Advice for Advisors” sidebar.)
Serving Plans and People
Wernette’s group works with both individual wealth management clients and retirement plans. “On any given day we may be providing services to a plan as a whole and then sitting down with individuals within that plan and working with them specifically. We also have many clients that are employed in other places and we don’t touch their retirement plan per se, but we’re dealing with those individuals more on a wealth management side and incorporating into that retirement planning for those folks,” explains Wernette.
Rehmann’s retirement services group includes 32 individuals, in addition to Wernette, who provide a variety of services to about 1,000 retirement plans, which run the gamut from those with a sole participant up to ones for 15,000 employees, although the average is 25 to 500 participants. In terms of assets the largest plan the firm handles contains $50 million.
When it comes to retirement plans, Wernette says that Rehmann Financial can handle the client’s needs from enrollment through education and ongoing investment management. If the client is the employer sponsoring the plan, Rehmann is likely to handle the whole thing; if the client is an advisory firm, then Rehmann is likely going to provide administrative services.
In order to provide a better understanding of how the process unfolds, Wernette explained the way his group works with a new retirement plan client. The first step is get employee census data– birth dates, hire dates, compensation, etc.–and then sit down with the employer to determine the goals and objectives for the plan. “What is the owner looking to get out of the plan? Are there any key employees that he’s specifically trying to benefit in some way? How much is he willing to spend on his employees as a benefit? From there and with that census data, we start crunching out some plan design options and walk him through those options,” explains Wernette.
Once Wernette is confident that he has a plan designed that will meet the owner’s objectives, he starts looking for the right investment platform. “That part gets back to the makeup of his workforce and what kind of individuals we’re dealing with: how much guidance they may or may not need on the investment side; any specific objectives that the owners or key employees may have,” he says. “We can deal with just about any investment platform that’s out there and find the best one that’s going to be the best fit for our client.”
The Benefits of Scale