Financial Literacy: A Goal-Based Plan

Most workers no longer remember when pensions were a given in corporate America, and more than half of the country’s working population lacks access to company retirement plans. Instead, self-funded retirement products like 401(k) have become the go-to plan for many Americans. Critics, however, claim these plans often are obscure and laden with hidden fees and low rates of return.

Founder of Valley Investment Solutions and 401(k) specialist Nathan Van Stippen says the biggest flaw with the current 401(k) system is not fee disclosures—it’s the lack of ability to compare and shop plans.

“The real issue that we see is that there’s no basis for comparison for the individual to be able to look and see if that plan, based on size and service, is competitive within the industry,” Van Stippen said.

Van Stippen explained that 401(k) prices are based on factors like account balance, number of plan participants, investments held in the plan, and the cost of managing the plan. But without a model they can use to compare plans, consumers can’t determine whether they chose the most cost-effective plan or not, even when they know exactly how much they are paying for said plan.
One of the first steps Van Stippen takes to help clients make decisions about more sophisticated investments, such as the 401(k), is starting with a foundation of financial literacy. Once the basics are in place, Van Stippen explained, it becomes easier to have conversations about more complex decisions. And since his goal is to always make sure his clients are able to identify their goals, having that foundation is paramount.

For Van Stippen, it’s always been about educating clients and making sure they have the knowledge and comfort level to make life-long investment decisions. His passion for saving started in high school. Later, while an undergraduate, Van Stippen improved his parents’ saving strategy, and then switched majors to economics. Van Stippen has been committed to giving his clients the tools to make informed decisions ever since. 

Ensuring clients are informed underpins successful planning from the start.

“We agree with a more conservative approach in order to be sure our clients understand how their portfolio is going to react given any market condition,” Van Stippen said. “As our relationship develops and they are able to tolerate more risk, we would discuss changing the structure of their portfolio to be more alpha if that’s what that client is looking for.” 

Van Stippen believes that while educational apps allow people access to a wealth of information, they can also become problematic since technology is still somewhat limited in its current stage and will likely be more advantageous to the general user ten years from now as these apps continue to evolve.

“What we’ve seen is that some people come in with a predetermined idea of how they are supposed to be investing given where they are in their lifecycle,” Van Stippen said. “This doesn’t always dovetail with their actual risk tolerance.”

For more information visit:

Securities and advisory services offered through SII Investments, Inc. (SII), member FINRA/SIPC and a Registered Investment Advisor. SII and Valley Investment Solutions, LLC are separate and unrelated companies. The Suit is not affiliated with either SII or VIS

Follow Us

Subscribe to Our Newsletter

What's Next, Updates & Editorial Picks In Your Inbox

Related Articles

© 2017-2021 Advisors Magazine. All Rights Reserved.Design & Development by The Web Empire