Nicklas Financial | Every Move Matters

Financial Blog

"The most powerful weapon in chess is to have the next move."

-David Bronstein, chess grandmaster and tactical genius.

Triangle The “Show Me” Mantra

Published on: January 18, 2017

There is a lot to love living in Missouri. If you take just a little time to research the history and geography or our state you will find it is a very unique and special place. We have incredible diversity of terrain, people, culture, and climate. I love driving around the state and experiencing the abundance of different activities, food, drink, and people along the way. I take particular pride in our state nickname, the “Show Me State.” We have a pioneering history of perseverance, hard work, and getting the job done. Around here talk is cheap, we want proof. Because success is measured in outcomes, which brings me to the point I really wanted to address: measuring outcomes.

In past articles I talked about creating the “best” retirement plan, one that seeks to create successful outcomes for employee participants. Part of creating the best plan is tracking and measuring how successful your plan is at getting participants financially prepared for retirement. In other words, as a plan sponsor you should be able to demonstrate, or “Show Me,” the effectiveness of your plan. More importantly, as a plan sponsor you should be able to “Show” your participants if they are on track for their retirement goals. Unless you measure something it is very difficult, if not impossible, to improve it in a significant way. Karl Pearson, the founder of mathematical statistics, said, “That which is measured improves. That which is measured and reported improves exponentially.” In your retirement plan, measurement and reporting is critical to creating successful outcomes. Plan design, investment alternatives, plan administration, and participant education and communication are all areas that should be frequently reviewed and measured for how effective they are at pursuing retirement goals for participants.

Now more than ever plan sponsors should embrace and champion the “Show Me” mantra. Technology has made measuring and reporting plan and participant level information much easier. As a plan sponsor you should look to your service providers to provide you information on overall plan health, which not only looks at participation and deferral rates, but more importantly identifies how many participants are on track to meet their retirement income needs.   By measuring and understanding plan health you can identify and implement changes at the plan level in seeking to help improve participant outcomes. Your service providers should also be able to assist you in providing participants with personalized retirement income projections on a consistent basis. “Showing” participants where they are and whether they are on track to meet their retirement income needs helps them make more educated decisions about their retirement savings and in many cases leads to increased deferral rates and more participation.

While at a Naval banquet in 1899, Congressman Willard Vandiver famously declared that “I come from a state that raises corn and cotton, cockleburs and Democrats, and frothy eloquence neither convinces nor satisfies me. I’m from Missouri, and you have got to show me.” It’s time to stop talking about successful retirement plans and to start proving it. I encourage you as a plan sponsor in 2016 to challenge your service providers to “Show Me” how successful your plan is at preparing your participants for retirement.

Securities and Advisory Services offered through LPL Financial, a Registered Investment Advisor. Member

Written by Brandon Nicklas
  • Get to know Brandon Nicklas better in our Meet Us section
  • Ask or look for answers to questions in our Q & A.