When Is The Last Time You Successfully Timed A Disaster

I lived through Hurricane Katrina while running a small distribution business here in New Orleans. The business was flooded for 28 days and operations were extremely curtailed for months after. I share this with you because we benefitted from the fact that we had documented our business files and in this case properly backed-up those files electronically. Unfortunately, and like many others, the company needed to make a business interruption claim on its insurance policy. Thankfully, we had the proper records to justify the claim and were able to present them to the adjuster in an organized binder that made following the facts of the claim simple. The adjuster took a look at the binder and said, “You will be just fine.” The truth is that my claim was successful because I had taken the advice of my insurance agent and prepared before the disaster. I am thankful to this day that he gave me the advice he did and that I followed it. In the end, it made that part of the recovery much more efficient.

In the process of working with clients, Investment Advisors draw upon experiences gained throughout careers that often include insights gained from previous jobs not in the financial services arena. It might be argued that the ability to draw upon these “otherworldly” experiences adds to the advisor’s ability to offer in depth advice beyond the construction of a portfolio or the determination of the appropriate level of risk a client should take. After all, we advise clients who are engaged in many different types of work.

As I have written about often, ThirtyNorth Investments specializes in assisting business owners or partners (the plan sponsors) that offer retirement plans as a benefit to their employees as well as assisting the employees (plan participants) saving through the plan. Both the sponsor and the participants have a vested interest in having the plan administered in an efficient manner that is designed to drive positive retirement outcomes. Don’t forget the business owners save for retirement in the plan too; and thus, taking steps to improve efficiencies is not only a responsible act from a fiduciary standpoint, but also mutually benefits the participants and the business owners.

Lately, many articles have focused on understanding and managing the costs of retirement plans. This, of course, is a key ingredient to driving positive retirement outcomes. Another key ingredient is making sure that you have an effective plan in place to document the practices and procedures used to administer the plan. In fact, this is one of the fiduciary obligations of the plan sponsor and one of the areas the Department of Labor is likely to examine when auditing a plan. Doing the right thing and documenting that you are doing things right can be very different. Having a documented due diligence process in place can help avoid serious headaches and contribute mightily to the efficient administration of your plan.

Investment Advisors can assist with evaluating the completeness of your files. What you choose to include in your files is ultimately your responsibility and choice. However, as I like to say, I don’t know what I don’t know and relying on an advisor who specializes in working with retirement plans can offer constructive and key assistance. One question I like to ask my clients is, “have the members of your 401(k) committee indicated in writing that they understand that they are fiduciaries and is that documented in the file?” Another is, “do you have a current Investment Policy Statement on file?” Whether your answer to these or other questions is yes or no, the most important thing is that you have knowingly decided one way or the other. Every plan is different and therefore has different processes and procedures that need documenting.

ThirtyNorth can provide support to Plan Sponsors using our THIN(k) Plan Audit – Due Diligence process to ensure they are fulfilling fiduciary standards and providing optimal service to plan participants. This link will direct you to additional information on this service (ThirtyNorth’s THIN(k) Services) .

We cannot predict exactly when we will need to draw upon the information that we file away, but we know we should be prepared ahead of time. I can say with certainty that I am glad that I had properly documented, filed and backed-up the information that enabled me to successfully file my insurance claim after Katrina. That ounce of prevention paid a big dividend.

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