The worst employers I ever worked for were labor lawyers.
That may sound strange coming from someone who spent years practicing law, but it’s true. These were attorneys who represented unions and workers, yet many of them treated their own associates poorly. Looking back, I often joke that I should have tried organizing the associates into a union. Needless to say, they would not have taken kindly to that idea.
It reminds me of the old saying that the cobbler’s children have no shoes.
I see the same thing in the retirement plan business. Over the years, I have encountered more than a few retirement plan providers with lousy 401(k) plans. Some had weak employer contributions. Others had poor participation rates. Some failed to take advantage of the very plan design features they routinely recommended to clients.
That has always puzzled me.
If you spend your career helping employers create successful retirement plans, shouldn’t your own plan be an example of best practices? If you preach the value of automatic enrollment, why don’t you use it? If you talk about the importance of employer contributions, why are yours so minimal? If you stress participant education, are your own employees receiving it?
I am not suggesting that every provider needs the richest plan in America. Every business has different financial realities. What I am saying is that there should be consistency between what you recommend and what you do yourself.
The truth is that employees notice. Clients notice too. It is difficult to sell best practices when you are not following them.
One of the lessons I learned from those labor lawyers is that credibility matters. Whether you are representing workers or advising retirement plan sponsors, people pay attention to whether you practice what you preach.
You can’t effectively handle your clients’ retirement plans if you can’t handle your own. The best providers lead by example, not merely by advice.