Saul Nirenberg
Founder, Saul Nirenberg & Co. (www.portfoliostrategy.com); New York
Advice on 401(k) Business: "First, put together the best investment options…. Second, make sure [your] fees are really competitive."
When it comes to knowing their own companies, human resources departments are clearly experts. Knowing their way around financial services and the 401(k) plans they're in charge of? Many are clueless.
Enter: Saul Nirenberg, a 34-year former broker and brokerage sales manager, who advises HR departments both on how to select advisors to manage retiring employees' 401(k)s and on the specific plans offered.
The ex-L.F. Rothschild & Co. (later Oppenheimer) partner says that many smaller firms — those with fewer than 3,000 employees — are paying high fees for incompetent 401(k) investment advice and receiving puny employee services to boot.
"The HR department needs a professional backup as to the kinds of services that actually are available and what they should be paying for them. Without that, they'll just do whatever the service provider says," says Nirenberg, who 10 years ago launched Saul Nirenberg & Company, in New York City. He is affiliated with neither a brokerage nor other financial services firm.
Since leaving Oppenheimer in 1990, the urbane, forthright Nirenberg has become a mediator and arbitrator for the New York Stock Exchange and Nasdaq, and serves as an expert witness in securities arbitration and court cases. Three years ago, he added 401(k) work to his mix.
"Saul's wealth of knowledge and insight about the way things operate within the financial industry and marketplace is invaluable," says Atlanta attorney Boyd Page, senior partner of Page, Perry, LLC, whom Nirenberg has assisted on investor cases.
Nirenberg's advice to advisors pursuing 40l(k) business? "Go in and offer investments that [your] experience has shown to be really needed by individuals in the company — and price them competitively. Be sure that all offerings are the best available."
Advice to HR departments choosing an advisor? For starters, they should talk to no fewer than three FAs or organizations, bypassing brokers with less than a decade's experience, he says.
Interviewing prospects, HR departments ought to elicit FAs' thoughts on how 40l(k) funds should be invested and determine any unique benefits each advisor will bring employees. When vetting independent investment advisors, companies need to find out year-by-year investment results for the preceding 10 years, as filed with the Securities and Exchange Commission, and where client monies are custodied, Nirenberg recommends.
The native New Yorker analyzes and counsels, of course, on appropriate service provider charges and even furnishes a list of questions to ask FAs — along with an idea of good answers.
