Franchise Your Business

Maximizing 401K Plans and Retention Strategies for Franchise Systems and Small Businesses

• Big Sky Franchise Team | Tom DuFore

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Looking to enhance your company’s 401k offerings and boost employee retention? Marc Walker, Chief Investment Officer at Legacy Advisory Partners, brings over two decades of expertise in investment services, fiduciary compliance, and retirement plan design. He will discuss best practices for 401k plans, key leader incentives, and retention strategies. This is a live recording originally recorded on June 13, 2025 at approximately 1 PM Eastern Time USA.





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Tom DuFore:

All right everyone. Thank you so much for joining us again on another one of our Franchise your Business webinar and podcast series episode. My name is Tom Dufour and I'm the founder and CEO of Big Sky Franchise Team. I want to thank you all for joining us today and if you're new to us here you haven't joined us before I'd encourage you to subscribe to our YouTube channel or our podcast, franchise your Business, where you can get a copy of this or get on replay and hear other episodes.

Tom DuFore:

We also have a second podcast called Multiply your Success and actually this Monday we launch, we have our five year anniversary episode, episode number 262, episode episode number 262, straight weeks of publishing and producing that event, and today we are going to be talking about on this episode, all about retirement planning and helping your specifically especially helping your employees to be prepared or to start at least thinking about being prepared for retirement and what you can do or in some options that you can do as an employer if you don't do anything and if you do have, for example, a 401k or some type of retirement program you're offering. I'm confident you'll be able to gain some insight and additional information here from our guest today, and our guest is Mark Walker, who is the Chief Investment Officer with Legacy Advisory Partners, and so, mark, I'd just like for you to say hello and give us a little overview here.

Marc Walker:

All right, thanks so much. Thanks, tom, for having me, and congratulations on the five-year mark of producing Webcast. So you're blazing the trail.

Tom DuFore:

Well, thank you yeah.

Marc Walker:

Thank you for the introduction. Yeah, our firm works with business owners and large corporations to small corporations and really helping them in navigating, setting up retirement plans, managing those plans, helping fulfill their fiduciary obligations. I've been in the industry since 1996, so going on three decades now, which seems awful quick that it's gone by. But I love working with our clients, having a personal relationship and kind of guiding them. My primary role is really on kind of navigating with the client of what are some of the issues you're facing, what are you trying to accomplish, setting that plan up and then helping manage it. We have a team behind us that really helps in some of the details. But my primary role is you know what are you trying to accomplish, helping you get there and giving some direction and then managing that relationship thereafter.

Tom DuFore:

Well, great. Well, mark, I know one of the things that we had talked about and it tends to be a struggle for small businesses. So a lot of our clients that we work with or that we're speaking to tend to be a small business, or they may be a franchisor, and franchisors even with 100 plus locations. The number of employees at each individual franchise location might only be a handful of people, or 10 people. It could be a relatively small staff, but they'd still like to maybe be able, in a position, to offer some type of benefit or something like that. So I know I'd love for you to talk maybe a little bit about what are some of the challenges you see for small businesses and being able to offer retirement type solutions to their employees.

Marc Walker:

Yeah, great question. What we see is some of the challenges. One is, when you think of a retirement plan, most of us tend to go straight to 401k that's probably the most known in the industry and then, along with that, we think about employer contributions. So how much am I going to have to put in, as an employer, into this plan and managing it for my employees? So there could be some concern of what are the dollar costs of just making deferrals into the plan or matching contributions. The second is that it could be that within the retirement plans there's a lot of government regulation, especially the last few years, few years.

Marc Walker:

The most recent ruling that was passed legislative-wise was called Secure 2.0, which was one of the largest pieces of retirement legislation that we've had, maybe going all the way back to ERISA. So it could be concerns of what are my obligations as an employer, to make sure that I'm doing what the law tells me that I'm supposed to and abiding by all that. And then I guess the last piece I would think of is you know what are the daily tasks or what am I going to be responsible for? Is this going to be a lot of administrative items that I'm going to have to keep up with?

Marc Walker:

So, those are typically the three main hurdles I would see in a closely held business of comparing the desire to want to do it to actually pulling the trigger and implementing it and having a plan thereafter.

Tom DuFore:

So, mark, talk a little bit about how a leader of an organization might be able to overcome that, or maybe even the process you take your clients through to support them through that process.

Marc Walker:

Sure. So I think the first piece is kind of a discovery process of learning a little bit about the organization. As you mentioned before, some of the people that are listening to Big Sky could be a smaller franchisee. Maybe they have five to 15 employees that are part of a larger organization. So understanding what the structure is. So you can just figure out if you do want to move forward.

Marc Walker:

Are you able to participate in a larger plan through the French, you know the main franchisee or do you have to develop something on your own? And if you're developing something on your own, you know what are some of the options to consider. You know, maybe it's a simple IRA plan. That's a little less administration. There are some employer funds that are available or you know there are some. You know PEPs. You know PEP stands for pooled employer plans, that if you don't have to have common ownership, so it's you're joining a larger plan and you can kind of come up underneath that and participate. You have multiple employers all a part of one plan across state lines. So that can be a great option for a company to have the benefits of a large plan. But they're able to kind of bring that down market. You avoid some of the administration issues.

Tom DuFore:

It brings a lot more simplicity to the plan an organization like yours helps create that, or do you just have the know of these types of pools that allow other employers to participate in? How does that work?

Marc Walker:

Yeah, so we're aware of some pooled plans that they could join, so we're not developing them. We would be basically guiding the client to that so they could implement it for their plan. So all that was really passed after the SECURE Act in 2020. And it was a way for smaller businesses to kind of join together, to come together and inform a plan when there's not common ownership involved.

Tom DuFore:

So because I guess so you answered the question I was thinking, which was if you were able to create that. I'm thinking of the franchisor being able to say well, we could aggregate a pool of franchisees to independently choose to participate as an employer in a pool of kind of what you described, of other franchisees that are in the network. That kind of becomes maybe a little value add for the franchisor to provide. But it sounds like that, something like that probably wouldn't be feasible that something like that probably wouldn't be feasible.

Marc Walker:

Yeah, you could develop it that way at the franchise or designation and then try to roll it up underneath. Most common is, if we're dealing with a franchisee, try to solve a problem for them, you know, and simplify it so you can reverse engineer it. It may take. We haven't done that work. As far as building one from scratch, Sure so, but yes, you can definitely be done. Probably a little bit longer process than just joining something that's already established and kind of going from there.

Tom DuFore:

Yeah Well, and speaking of whether you're just curious on timing for some of this, right, as you mentioned some of the administrative pieces and some of those things sounds like it could require. You know, just at listening to it, just like as an owner and myself being an owner I start thinking oh man, this sounds like this is going to require a lot of time. I'm going to have to learn all this new stuff that I'm already challenged as it is trying to figure out human resource related issues and employee benefits. It's all, at least for me. Maybe no one else out there, but for me it's very confusing and challenging at times, and so I'm curious how timing works. How long of a process does this take? What does that generally look like?

Marc Walker:

Yeah, so from start to finish, you're probably looking at it. If you're joining a plan rolling up under the PEP, you could probably get it done in 60 days. Some of it's going to be the discovery process of all right, what's the best solution for the client? What are we trying to solve? How many employees are there talking through employer countries? So a little bit of consulting process we would do with the client and then the actual joining the plan itself is fairly short. So 30 to 45 days you get something set up and then roll it out to your employees and participants.

Marc Walker:

Okay, so they take you know they take in a lot of the work out of it because it's already established. It's not a brand new plan. You're just becoming a participating employer in an established plan.

Tom DuFore:

And let's talk about someone that's looking to create, maybe, a new program at their company and say, well, I like the idea of the pool, but we just kind of want to do our own thing. How does something like that work?

Marc Walker:

Yeah. So those we would typically do a consulting project nominal fee to walk through. What are we trying to accomplish? Look at the employees, look at the employees, look at the payroll you know, and then, establishing the plan, go to market. Who's the best provider for you to set up a plan and then implement it? So a little bit you're probably adding another 30 days to the process by starting from scratch. You know to do that, so not as it's not super complicated, but you extend the timeline just maybe another month or so.

Tom DuFore:

Okay, very good. And let's talk a little bit about a company that maybe has some type of plan in place or some kind of offering in place. You know how, how do you get involved in, you know, in maybe assessing the I don't know success of or lack thereof, success. I don't know exactly how you'd evaluate that, but that's why you're here, so you know how would you know if maybe it could be better or improve, or maybe there are some alternative things they could be doing that you would be able to support them with?

Marc Walker:

Yeah, that's a great question, Tom.

Marc Walker:

You know one of our focuses as a company, when we're working with our clients, is to improve participant outcomes. So moving them from point A to point B and just keep moving them down the line. So when we are meeting a new prospect or our client engages us to work with them, we want to look at all right of your participants, how many are on target to reach retirement readiness, target to reach retirement readiness and most plan providers if you have an established plan, you can get that data where they'll tell you if you're trying to solve for 70 to 80 percent of your pre-retirement income, their system will be able to project out how close are you to achieving that. So if you're like most Americans, we're way behind on solving that need, but anything we can do to close that gap. So we'll look at the existing plan design. So are there some measures that we can implement that'll improve participants saving more money, having more retirement income they can pull on later. So over the last probably 15 years, what we've seen is the more things you can implement from a plan design perspective meaning it takes the decision-making power out you know that clients or the participants have to do something the more their savings will increase and they get on schedule to becoming retirement ready.

Marc Walker:

So I'll give you an example. So if you, if the company has new employees that they're hiring and you're just asking them to join the plan, you're making an offering, tom, you're a new employee of a legacy Welcome aboard. Here's our retirement plan. We've got a 50% match up to 6% of deferrals. Well, you may have intentions like that sounds like a great plan, Mark, but you forget it.

Marc Walker:

You put it on the back burner, you're getting acclimated to your new job and you don't enroll in the plan. Well, it could be a year from now. We come out and do an education session. You're like, oh, I meant to join the plan last year. So you see many participants or companies that do not have a way to get their employees in the plan to start saving.

Marc Walker:

So years ago companies introduced what's called automatic enrollment. So once you join the plan, after a certain amount of days we would send you a packet saying here's the plan, you're eligible for Tom, and then you have 30 days that if you want to decline it or change the percentage, you can go into the system. But if you take no action, then you're going to automatically be enrolled at 6%. You're going to get the full match from the company. Well, now, a year from now, we're doing education. You've already been saving for eight, nine, 10 months and your plan's going.

Marc Walker:

So the more things that we can take. Where it's going to be, it's called a negative election that is going to proceed and help get you set up for retirement and you still have the option of declining or changing it. But those are the things that really drive success in a plan. So we'll do an assessment of aren't there some things that we can implement from a plan design perspective that improves those outcomes and you're really helping the employee, you know, overall. And then, of course, we would always look at their investments. You know, are there some? How are they scoring in our system that we use? Looking at the cost, are the costs competitive for the services you're receiving? And those are the mechanisms that we can look at or that we do when we're working with a new prospect and a new client.

Tom DuFore:

Yeah, very good, and that makes me think and you alluded to this a little bit but in these automatic programs which I think is a great idea, probably, I would imagine there are a lot of employees that either it goes unnoticed, they see emails or stuff come through and they just don't do anything, or they're maybe a little timid and they don't know where to start. So let's look at that timid employee or someone that just would do it if they knew a little bit more. How do you help educate people? What's a process that you typically like to see, or that you do, or that? I've worked with 401k companies in the past and it's kind of after the first setup, that's it. I don't see them for years and neither does any of the staff. So how do you all do that and what do you what? Or not just what you do, but maybe what should an employer expect as quality service in that regard? Absolutely.

Marc Walker:

Yeah, there's a couple avenues on what we call the education. So one is the education to the employer. So when we're working with a company, we'll help them establish a committee. You know, if it's a small company it could be the owner and maybe one other person you know, an HR representative. Those are probably the two people managing the plan. So our role is to help educate them and annually we'll do a meeting. Here's some new legislation that's come out, something to be aware of, so they're kept up to speed from a best practice perspective.

Marc Walker:

On the employee side, we have a couple avenues. So, depending on some of the plan providers that we work with you know that are very well known Fidelity, empower. They will ADP. Their systems will actually look at participant accounts and have proactive communication. So they'll receive, you know, emails, communication based upon, you know, maybe they don't have a beneficiary in their account. So you would receive an email saying Tom, you know you ought to log into the system. We see you don't have a beneficiary, you know. Unless you want it to go to you know your estate, you know, log in, make sure it gets taken care of.

Marc Walker:

Or if you, you know, let's just say you're a young, younger employee and you have 100% of your money in a money market account, well, you're really missing investment returns and opportunity. Maybe you should review your overall asset allocation and consider am I in the right kind of mix? So the more things that we can have and that's become pretty prevalent over the last probably seven years, seven to 10 years of the companies who have a larger systems and really stepping up that communication from a provider perspective, and then we'll conduct annual education meetings. You know, either webinars or live presentations that can attend. Sometimes we'll do in-person meetings if that makes sense, if they're in our local area or if we have to travel. Then we'll make that a part of our discussions of engagement when we're onboarding.

Tom DuFore:

Yeah, that's really great. And what types of things do you look for? What do you look for in terms of a successful type either implementation or what do you see or would describe as a successful retirement program or 401k program at an organization? What does that look like?

Marc Walker:

401k program at an organization. What does that look like? Yeah, I would drive. I think driving success would be the more plans or plan designs that we can automate, the better. So if it's either a startup plan or a plan that we're taking over and making some adjustments so that automation is going to drive improved enrollment numbers, improved deferral percentages so we talked about auto-enrollment a minute ago Then you can include automatic increase. So annually the company or the plan provider would send you a notice saying okay, your deferral percentage is started at 6%. Through automatic enrollment it's going to increase annually by 1% and then you put a cap on it. You know either 10 or 12% and then it would stop unless you decide to go into the system and change it.

Marc Walker:

So what happens over time? You know about 92% of participants stay in. They're opted into automatic enrollment. So only about 7% to 8% of people opt out. And that's industry. It doesn't matter if it's white collar. You know blue collar people working in a fast food restaurant. So it's pretty low opt out. And then when you do automatic increase, it's still pretty high. You know it's still 85 to 90 percent.

Marc Walker:

So people typically will adjust to changes in their paycheck after two paychecks. So you may not like it when it first happens. The second time you may have adjusted. By the third time you don't even think about it anymore. So the more things that we can automate to try to improve those participant outcomes. Thinking about Roth, adding Roth as a deferral source for employees that they're younger. They're not as concerned about the current tax deduction that we get with pre-tax. They'd rather the money come out tax-free later on at retirement. So the more things that we can implement and offer to employees to improve the plan and then just monitoring that success over an annual basis. Where do we start? Where are we now? What are the goals we're trying to achieve long-term?

Tom DuFore:

Wow, well, that number is pretty a glaring number. When you said that about 92% or so of participants, if there's just kind of the automatic election to go or to participation, that they just automatically are in and doing it, just automatically are in and doing it. The way I look at that is what a gift the employer is giving to their employees, because that means how many of those folks would have never signed up? Probably a high percentage would have never signed up, would have never done anything, and they work somewhere for even five years, 10 years and over the course of their career. If that were to happen in your 20s, 30s, even in your 40s, anything makes a difference to allow the time to pass and it's going to grow. I mean at least that's how I view it it's just you're literally giving your employees a gift that they don't even recognize or realize how important that's going to be to them.

Marc Walker:

Yeah, yeah, it's funny you say that, tom that my daughter just got married in August of last year and she started her job, full-time job, and then she received her benefit package in the mail. Calls dear old dad. Hey, dad, what I do with this? And you know it had automatic enrollment in her plan. So I described what it was and she said you know, dad, is it a good thing to let this happen, the money coming out of my paycheck? I'm saying we're going to be a little tight and I'm like, well, just let it happen. This will be the best thing that you could do is to let it occur. So a joke that we typically will talk about when we're doing our education sessions with a client is when your plan has these automatic features, we've yet to have a participant call us when they're retiring and say Legacy, you told me or encouraged me to save too much money and I want to give some of it back. So we haven't had that happen yet. We're still holding our breath.

Tom DuFore:

Yeah, that's exactly right. Yeah, it reminds me I remember one time my father-in-law had received a bonus from his employer and it was a substantial bonus to his retirement account and I remember that in the moment he was a little he was thankful for it. Of course he was very grateful for it, but in that moment he was like, well, I could really use the cash, it'd be great to have the cash. But now, as he is in retirement, he's grateful to have that extra funds in the account to grow over almost 20 years, to be able for that to happen. Absolutely, yeah, anyway, I think you're spot on. I can't imagine. I'm not surprised. I guess no one's called to complain about saving too much money.

Marc Walker:

Yeah, and before you know, before some of these features were kind of coming into our industry. You know we could. We could go out to a company and do education until we're blue in the face. They may like everything from our presentation, but to actually take the next step to either enroll in the plan or increase their percentages, very little of that transpired unless you actually get down and help them log into their account and make those changes on the spot, which is difficult when you've got large meetings. So these features really took the next step of behavioral science and looking at some of those studies and it's really kind of transformed our industry and helped participants save more, as you mentioned, probably more than they ever would have, you know, if they weren't there.

Tom DuFore:

Well it's. You know it always seems around tax time or you know when you're filing tax around April 15th time zone. Wall Street Journal runs some report about retirement numbers and percentage of people who have saved money versus not, and the amounts that people have saved. And it really is. It's stark. When you look at it and you see the numbers, it's very glaring. And so you know, for anyone that ends up listening to this, if you don't have any kind of an employer program or some of these automatic things that Mark's talking about, I'd encourage you to look at that number and realize, wow, what you can do to support your employees, to help them get that nudge to proceed forward, where maybe they weren't taught about the saving and the time value of money. Or, if they were, they were just nervous about getting participating in given some essentially a stranger their money that they're working hard for, and so, anyway, I find that really, really interesting.

Marc Walker:

Yeah, when you mentioned stranger, a lot of the plan providers will have bilingual assistance for employees or could be. Spanish obviously is a big one, but they have other languages they can call if they need assistance. So all those things kind of help overcome some of the hurdles of you know, do I want to trust my money with somebody that they may not feel as confident about, or just the concern of the language barrier. So those things help bridge the gap.

Tom DuFore:

Well, Mark, how can someone learn a little bit more about what you're doing, reach out to you, get in touch If they're interested in maybe saying, hey, can you take a look at what we're doing or give us an assessment or analysis or consultation? How does all that work?

Marc Walker:

Sure, an assessment or analysis or consultation. How does all that work? Sure, yeah, they could reach out to us, uh, our website at legacyadvisorypartnerscom, or they could call our main line, 770-232-0303, uh, and reach out to us either way, and we'd be glad to learn a little more about what you're trying to accomplish and come alongside you and help solve some of your challenges.

Tom DuFore:

Wonderful and again the website was. What was the website domain? Again.

Marc Walker:

Yes, LegacyAdvisoryPartnerscom.

Tom DuFore:

Great. Thank you so much, mark. Well, as we're kind of drawing to a close here, I'd be curious is there anything maybe you were hoping to share, get across, or just anything? Maybe parting comment you'd like to leave with someone?

Marc Walker:

go of just. Our role is to help not only employee but those business owners where they want to put something in place. Maybe they want to reward and retain their employees and they're not sure of what to do and concerned of how do I move forward? How do I take that first step?

Tom DuFore:

So, reach out to us.

Marc Walker:

Yves, and we'd be glad to have conversations and just see if we can be of assistance. We're a resource for you and I can provide my personal email, which is mwalker at legacyadvisorypartnerscom, and we'd be glad to assist you guys. And thanks so much, tom, for inviting me on and getting us to share a little bit of the story, and enjoyed interacting with you.

Tom DuFore:

Well, thank you so much as well, and we will make sure to get this session out, and so, for anyone who wants to watch a replay or listen to this again, it'll be on our podcast, it'll be up on our YouTube channel, so we'll have lots of opportunities for this to be shared as well, along with the links to your website and contact back to you. So, mark, I'm so grateful for your time. Thank you for being here and sharing your wisdom today. All right, Appreciate it.

Marc Walker:

Thanks so much.

Tom DuFore:

Have a great weekend everyone. Bye.

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