Vanguard’s defined contribution retirement plan service for plans up to $20M has started strong, but it’s still in the first few miles of a marathon. That’s how Steve Holman, head of Vanguard Retirement Plan Access™ (VRPA), describes the current state of our offer for plan sponsors and financial advisors who manage such plans. In this Q&A, Mr. Holman discusses his journey from the Olympics to Vanguard and goals for VRPA’s next mile.
You shared in a previous blog that this is actually your second career. Your first was as a professional athlete. What prompted the change in direction?
The short answer is that I needed a job. I’d been a professional track and field athlete for over a decade after college, competing in the 1992 Summer Olympics 1500 meter event. After I didn’t qualify for the Sydney Olympics in 2000, I decided to retire from running and go to business school. I also wanted to contribute in a different way and do something meaningful with my life. It wasn’t until I got a summer internship at Vanguard after my first year of business school that I realized how important it was for me to be part of a virtuous organization I truly believed in and felt was doing right by its clients. Vanguard’s mission of giving investors the best chance at investment success really resonated with me.
As you transitioned, what were the most important business lessons you learned? How have you used them in VRPA?
During the bulk of my time at Vanguard, I’ve been a leader. What all my leadership experiences have taught me is that success in business is driven by a highly productive, engaged, diverse team. My impact comes from how I build and cultivate that team—combined with really focusing on, and being responsive to, what the clients are saying and what they need from us.
It’s particularly relevant in VRPA from the perspective that we are still a relatively new entrant into the small-market 401(k) space. Not only do we need a talented team of eager and passionate sales professionals, we also have to be acutely aware of how we can partner with and support the needs of both the plan sponsors we’re serving and the advisors with whom we work. It’s really about being closely attuned to what they need, what success means for them, and how we can best serve them—so our clients’ needs are first and foremost behind whatever offer, service, or experience we’re creating.
What are your top three goals or aspirations for VRPA?
Goal number one is to grow the business. I think there’s potential over the coming years to grow the number of clients we serve substantially. We have an enormous opportunity to provide the value and service that is very much needed in this segment to a much larger group of plan sponsors.
Goal number two is to continue to shift the marketplace toward our way of thinking. It’s a version of what Vanguard has done more broadly, with our focus on low costs, proven investment philosophy, and resources to enable superior client outcomes. We’re still waiting for that shift to happen in the small-market segment. There are too many plan sponsors who are being underserved and overcharged. As an innovator, we want to continue to be the insurgent in this space not only for the benefit of the clients we serve but for all small-business owners who have retirement plans.
Goal number three goes back to what I said before: I aspire to have the most talented, productive, and diverse sales team in the organization. We want to create an environment where our employees work hard, genuinely enjoy working together, and represent the broadest range of backgrounds and experiences. Why? If our employees are happy and productive, we’ll be in the best possible position to serve our clients effectively and help the maximum number of investors achieve retirement success.
What excites you most about the VRPA business?
There’s tons of potential. As much as we’ve grown since we started in 2011—from 50 to 12,094 plans and from 1,558 to 528,000 participants*—we’re still improving access for small-business owners to high-quality, low-cost retirement plans. We’re identifying advisors who are aligned with our philosophy and partnering with them on the common goal of helping small-business employees successfully save for retirement. And what I love most are the individual stories. It’s so rewarding to hear the deep gratitude directly from a small-business owner whom we saved thousands of dollars a year and dramatically improved the likelihood her employees will have a secure retirement. That’s why we do what we do.
In another blog, you emphasized the value of a strong partnership with financial advisors. What’s the one question that advisors should ask when meeting with investment firms to potentially partner with?
They should ask, “How can you help me grow my business?” Most advisors are looking for resources and guidance for creating a more compelling offer to prospective clients and serving existing clients more effectively. They need help, and I would love for VRPA to be viewed by advisors as the go-to resource for that type of support—whether it’s investment thought leadership, collateral to help better position themselves to prospects, a strong product that they can offer potential clients, or a service support that removes the burden and administrative hassle.
Vanguard can provide that support, and our primary job as sales executives in building this partnership is to make the case that it’s beyond just low-cost funds. VRPA can help you, as advisors, to be more successful and grow your business. The more advisors really feel that additional value we’re providing, the more successful we’re all going to be.
*Source: Vanguard, as of March 31, 2019.
Editor’s note: This blog post is just the first leg of a distance run. Check back in the coming weeks for more from Steve Holman on VRPA.