By C. GRANT JACKSON
gjackson@thestate.com
A couple of S.C. retirement plan specialists have formed a consulting firm aimed at helping companies help their employees have a comfortable retirement.
PrimeTRUST Advisers is a retirement plan consulting and advisory firm with offices in Columbia and Greenville.
Archibald “Chip” Hardy IV of Columbia, and Julian G. “Chip” Hunt Jr. of Greenville, the partners behind the firm, have more than 30 years in the retirement services area.
Retirement planning isn’t one of the more sexy business topics, but Hardy and Hunt point out that “national surveys show that less than 30 percent of 401(k) plan participants are on track to accumulate the money they need to retire comfortably.”
PrimeTRUST wants to help companies and their employees change that, they said.
“We feel a little like the classic David vs. Goliath,” Hardy said, “since we are a boutique firm looking out for the masses of employers and their employees who often don’t realize how much better their retirement plan can and should be.”
As traditional pension plans vanish, more workers are relying on 401(k) or similar retirement accounts.
Employers set up the plan and hire providers and administrators.
But, unfortunately, employees — and even employers sometimes — don’t know who is managing those accounts or what it is costing them.
Much has been written in the financial press of late about the toll that hidden fees can cost retirement accounts.
Baltimore Sun personal finance columnist Eileen Ambrose noted last month that employees at 10 of the nation’s largest companies have sued their employers over their plans’ fees.
New York Attorney General and now Gov.-elect Eliot Spitzer has even taken on the fee issue. A Spitzer investigation resulted in a $30 million settlement with ING over undisclosed fees.
“To design solutions for improving employees’ chances of retiring comfortably, you have to start with a good understanding of the core issues,” Hunt said. “We generally point to three primary problems: insufficient investment advice, provider pricing practices and inadequate fiduciary services.”
Fiduciary means putting the financial interest of the client first, Hardy said.
But Hardy said fiduciary is more commonly used by retirement plan providers as a marketing concept than an actual duty.
“Why should an employer be put in the position of having to discover hidden fees?” he said. “Why should fees be hidden or undisclosed in the first place if one were truly acting in a fiduciary capacity?”
Some industry practices are just not acceptable, Hunt said. “It is unfortunate, but true ... in the financial services arena, you really have to question whose interests are being represented.”
Hardy is a former senior vice president of American Pensions Inc. Prior to that he was with BB&T Institutional Trust.
He started his financial service career with C&S Bank of S.C., now part of Bank of America.
Hunt formerly served as president of SHDR Investment Advisors, a subsidiary of BB&T. He began his career in 1980 by joining his family’s third-party administrator firm Hunt, DuPree, Rhine and Associates.
Both men hold the accredited investment fiduciary designation from The Center for Fiduciary Studies at the University of Pittsburgh.