Odyssey Advisors, Inc
The biggest thing we sell is independence,” said Parker E. Elmore, president and CEO of Odyssey Advisors, Inc., a Connecticut-based retirement planning firm that he founded in 1998. Odyssey serves small to medium-sized clients in 37 states, including a ne
Banking on an Independent Streak
Parker, with over 25 years of experience in the industry, relishes the independence of his company. “We’re an independent provider. We don’t manage money. We don’t want to manage money. We work with people in that business,” he explained, continuing, “Clients understand that the advice we give is independent because we get paid only by them.” Odyssey’s independence with brokers exists because – as Parker puts it, “We can work with any of them.”
Odyssey’s business is a 50-50 split between private companies and municipalities. He said that six or seven years ago, it was more like 90-10, private versus municipalities. Since then, the number of municipal clients has exploded.
“The tipping point,” Parker told The Suit, “was the emergence of GASB 45, an accounting standard that became effective in 2008.” GASB stands for Governmental Accounting Standards Board.
“Municipalities around the country have promised medical benefits to their future retirees. And, what GASB 45 basically says, is that you have to reflect on your books what the value of that promise is.”
Parker seized the opportunity that GASB 45 presented and turned it into a focal point for his firm. “We’ve been doing that kind of work since the founding of the company, and I’ve been doing it since 1992. So, it was a natural fit for us to get into that market.”
For private companies, Parker said that ESOPs (Employee Stock Option Plans) can be good alternatives to 401K plans.
Providing employees with ownership in the company as a retirement benefit means that participating employees have “skin in the game.” Park- er acknowledged, “Ultimately, the value of that stock they’re receiving in their benefit plan is going to go up or down, depending on how the business is doing.”
ESOPs also allow company owners to sell portions of their business to the plan, a chunk at a time. “Owners get a chance to take a portion of their net worth and diversify into something else,” Parker said. And, though it may not the most lucrative way to exit their companies, owners can ease their way into retirement. They don’t have to sell the business and walk away.
Regarding 401K plans, Parker emphasized, “Most have far too many funds. Fifteen years ago, eight to 10 funds was the norm. Today, it’s 40 to 50 funds, if not more.” As a result, the average participant doesn’t know which funds to invest in.
“It’s the paradox of choice,” he said. “Too much choice is no choice at all.”