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Drum Roll: Making The Sunset Years Golden
Former rodeo rider helps employees and companies manage retirement options wisely
by Patti Ghezzi
October 25, 2007
W
hile volunteering for Builders Care, a Florida nonprofit organization that refurbishes
homes for the low-income elderly, Jessica Flores was horrified to find an elderly woman living off
cat food and unable to pay her bills while living in a house that was falling down around her.
"But when she walked out the door, she didn't know what she was going to do," recalls
Flores, who has worked in every aspect of the retirement plan industry from sales to consulting and
coaching. The woman had been a loyal employee for three decades and thought she had saved enough
through her company's retirement plan to be financially secure. To her horror, Flores realized that
the woman wasn't an isolated case.
As she rose swiftly in her
field, Flores grew more disturbed by what she saw: an industry that she viewed as accountable to no
one with little regard for the average worker like the elderly woman she met. She perceived it as
an industry built on personal connections and conflicts of interest, concerned only with protecting
the investments of executives at the top.
"There are no standards to say, ‘This is a good product, this is a bad product,'" Flores
says. "There is no way for the average Joe to know."
Employees often assume the money they contribute to their 401(k) plans will be invested
wisely, but Flores saw plans burdened with fees and commissions. She saw a crisis looming as
workers retired with insufficient funds.
Flores examined the retirement plan industry from every angle and conceived of a business
she believed would look out for workers as well as help companies understand their fiduciary
responsibility. In May, Fiduciary Risk Management opened its doors, with Flores as managing
director. The company is an independent subsidiary of Habif, Arogeti & Wynne, an independent
accounting and business advisory firm.
Fiduciary Risk Management sells no products, nor is it aligned with any service provider.
Its goal is to protect the plan sponsor and provide education so that employees can make decisions
about their money. "I'm so passionate about the business," Flores says. "This is the void yet to be
filled."
Nick Bhandari, a partner at Habif, Arogeti & Wynne, praises Flores' ability to impart to
potential clients the importance of understanding their responsibility with regard to retirement
plans. "She is very knowledgeable," he says. "When she steps in front of a client ... it's
difficult to think anything other than, ‘How can we work with this group?'"
Companies used to think it was enough just to have a retirement plan, but that mind-set is
starting to change. "Companies are really starting to accept that it's their responsibility to get
employees to retirement," he says.
Flores has spent her life looking for the right way to do things. When she isn't building
her business, she and her 8-year-old daughter, Cicily, are competing in rodeo barrel racing. Barrel
racing involves maneuvering horses around 55-gallon barrels at breakneck speeds. "At first I didn't
want to go to college," Flores says. "I wanted to ride horses for a living."
Instead, her horses became her escape from a demanding career. She once had 15 horses, but
now she has three plus Cicily's pony. She says she would rather take excellent care of a few horses
than have a large number and have to skimp on vet care. Many competitors in her sport have gotten
away from training their horses and instead want to buy their way to success, she says.
Flores, who lives near Cartersville, wants to teach Cicily differently. "It is her life,"
she says of barrel racing. "She competes at all but professional-level rodeos."
Flores grew up on a farm in Texas. She helped her father keep the books. By the time she was
going to college at night, she was working in accounting on a contract basis. Soon she was
examining the company's retirement plans and not liking what she saw.
"I didn't close my eyes when things didn't make sense," she says. She asked her college
professor if, as CFO, she were personally liable for the company's retirement plans. He told her
she was.
She decided to make her mark in the retirement plan industry.
First, she worked as a consultant. She discovered 403(b) plans that did not seem to serve
the workers who were depending on them for a retirement nest egg. "It was about whom you played
golf with," she says. "The employees never seemed to matter." She then was recruited by a large
broker-dealer, where she thought she would be helping companies understand their fiduciary
responsibility under the Employee Retirement Income Security Act. Instead, she again found profits
a priority over education. Her ideas for teaching company leaders and their employees how to better
plan for retirement were not welcome.
The scenario repeated itself with another large company in Atlanta. Profits ruled, and
education was an afterthought.
"I didn't come from a silver-spoon family," says Flores, whose mother is a doctor who has
worked in Third World countries and whose father was in the Air Force. "We were brought up to think
that everybody mattered."
When Flores pointed out that most companies did not understand their fiduciary
responsibility, her colleagues suggested bringing in counsel. To Flores, that seemed like inviting
a funeral director to preside over a surgery. "[Lawyers] were much more reactive," says Flores, who
sees her work as helping companies prevent litigation.
Even those who saw the lack of accountability in the retirement plan industry were reluctant
to change for fear that doing so would admit guilt and open the door to lawsuits, Flores says.
Litigation found the industry anyway. Fiduciary liability is one of the largest sources of
class-action lawsuits, Flores says. "Most companies are convinced they have completely complied
with the law and are unaware of potential danger," she says.
Adding, "This is especially the case for Fortune 1000 companies where large assets, combined
with unknown noncompliance, make them perfect targets for class-action lawsuits."
Fiduciary Risk Management is focusing on Fortune 1000 companies nationally and in Atlanta.
"We hope to take over the Fortune 1000 marketplace," says Flores, adding that companies
generally want to provide their employees with a good retirement plan. But they are at the mercy of
consultants and companies that care only for selling their product and collecting fees. "We will
step in as a fiduciary and be accountable for our results," she says. "Our goal is to protect
investors and be an advocate for plan sponsors."
