401(k) Specialist Issue 1 - 2019 - 14

D
It's a drum O'Toole, an early pioneer, has
been banging for years, first as the founder
of a regional TPA and then as developer
of the Viability platform now owned by
MassMutual.
By encouraging retirement and benefits
professionals to " look across sight lines " and
shed myopic views of any single offering to
better address total client needs, he's helping
them impact the employer's bottom line.
It involves a deep dive into the data,
with proper interpretation as its key. Doing
so can hit upon commonalities and trends
(both positive and negative) and more
customized strategies for the benefit of
everyone involved.
Call it financial wellness on steroids,
with human capital risk management as the
underlying PED. A clunky metaphor, but
top 401(k) advisors understand that data and
technology are fostering convergence, con14
ISSUE
1 2019 | 401kSpecialist.com
" Don't be an analog phone. "
It's a weird way to start a presentation on retirement
benefits, but attendees of an industry
study group last summer knew to be patient;
Hugh O'Toole was about to make a larger (and
important) point.
" I have an analog phone that only my father-inlaw
uses to call me. I wouldn't have it if it wasn't
part of a cheaper, bundled package, " O'Toole said,
before warning the gathered retirement plan experts
to avoid the analog fate, stay relevant and
offer real value and insight to the sponsors and
participants with whom they work.
His solution? Human capital risk management,
a competitive differentiator that's revolutionizing
the way in which 401(k) advisors deliver
their services.
venience and cost-reduction-and CFOs,
HR reps and plan committees will only
demand more.
" Is your business in data, information,
knowledge or wisdom? " O'Toole rhetorically
asked, before noting that wisdom
(or interpretation) " is the highest margin
business on the industry pyramid. "
O'Toole recently joined Pittsburgh-based
Innovu as CEO, a firm that provides
" insight based on integrated data. " It's
something the advisor can take and work
with the employer to determine " how
controlling the demographic trend of an organization
will better align them with their
employees to control health benefits cost,
decreasing retirement delays, and managing
P&C risk drivers. "
And, he added, the 401(k) is the way to
control that demographic trend, primarily by
fostering and encouraging diligent saving.
For instance, " Older employees provide
stability and experience, but they should
only continue to work if they want to, not
because they have to because they can't
afford to leave. "
So how do advisors take advantage of a
human capital management approach? It's
something with which O'Toole has seen
many struggle.
" Advisors absolutely get the interconnectivity
of retirement benefits, health/welfare
benefits and property-casualty benefits,
but they have no idea how to change their
business model to make it happen. "
Naturally, Innovu offers a way to make it
happen. Here's how.
" The first step is data collection, " he
explained. " Can you even trust the data that
is available to you? It's the single point of
truth. "
What matters to a CFO are short-term,
intermediate and long-term savings. The
way to fund short-term solutions is through
immediate interventions that lower the employer's
costs while increasing effectiveness.
The evolution of the human capital risk
story would therefore start with the largest
and most immediate expense-health
care-and then work into retirement and
property and casualty.
Yet O'Toole argues that over the last 10
years, the industry has been so siloed that
even when all three disciplines coexist, they
don't necessarily speak to one another. And
not all decisionmakers view and understand
their population in the same way, something
that compounds the issue.
" Do they even realize that 10 percent of
their population is over the age of 60? Do
they understand that they have a certain
number of diabetics, or a certain amount of
people that might have a high body mass
index? Do they understand that maybe only
40 percent of their population is on track to
retire, and that means they're going to stay
longer? Do they understand that they have
safety issues with their employees, and that
all these things are interrelated? "
The data must be framed in a way that
both the advisor and the employer can
digest, and " once you see those areas of
potential opportunities, you can actually aim
that data and really dig into it. "
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401(k) Specialist Issue 1 - 2019

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