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Semi-Annual Meeting Addresses Retirement Advisor Practice Technology Trends

At the Semi-Annual Meeting hosted by LPL Financial in sunny San Diego, CA, the Council dug deep into the issues facing retirement plan advisors in 2016.  This meeting’s theme - The Wild, Wild West…A Moving Frontier for Retirement Plan Stewards - captures the sentiment shared by many advisors that the industry is evolving at a fast pace. Getting together live provides attendees with the opportunity to share directly with their peers and compare experiences with plan providers, investment managers, practice leaders and others in the industry.

The Council has grown to include 89 financial advisors, 12 retirement practice leaders, 10 recordkeeping service providers, and 14 investment management firms who each bring a unique perspective on retirement plans. The collegial mix makes for lively panel discussions, breakout peer groups, and one-on-one exchanges. Following is a brief description of the most prominent topics and discussion points from the meeting’s first day:

“Independent” Advisors Advance

The role of Registered Investment Advisors (RIAs) in the Retirement Plans space continues to grow.  Many plan sponsors appreciate the independence of an RIA who does not have ties to a specific retirement plan provider, investment manager, or insurance company.  Advice from “independent” Advisors is perceived as unbiased.   One speaker pointed out RIAs have created 10,000 job opportunities and bring to the market a sense of independence, opportunity, and a level of client service in high demand among plan sponsors. Going one step further, opportunities for RIAs abound at the participant level.  Managed accounts represent only a small portion of retirement plan assets and a whopping $23 trillion sit outside managed accounts.  

Rise of the Machines

Are plan advisors competing with Robo Advisors?  Robo advisors - automated investment advice vehicles - are gaining popularity particularly among members of Generation Now, but cannot replace the sentient touch of a living advisor who can take more into account than a simple program or algorithm can.  Advisors continue to educate plan sponsors about their value and need to constantly demonstrate how much farther the personal touch can go when competing against automated solutions.

A Holistic Approach to Employee Finances

Plan sponsors are asking for more when it comes to employee education.  Financial wellness is gaining popularity as a discipline, covering employer-sponsored retirement plans and education about consumer debt, savings outside of an employer plan, and anything that can impact employees’ overall financial future. Other topics include estate planning, tax planning, and how to be a prudent consumer.

Retirement By the Dashboard Light

Plan sponsor thirsty for knowledge about their retirement plans is not easily quenched, but many refuse to drink from the fire hose.  As an alternative to the voluminous 50-page reports offered by some plan providers and advisors, sponsors are asking for simple “Dashboard” reports.  These can illustrate the state of their retirement plan at a glance: plan performance, plan health, investment fund indicators, or any number of topics.  Sponsors are asking for an easy-to-read summary aka dashboard, and also the ability to drill down to a deeper level if they want more info about anything shown at the highest level.

“Kids” Today

The younger generations will become the wealth holders of tomorrow. For this reason, many advisors focus their attention on reaching clients while they’re still young.  This next generation, dubbed Generation Now is described as those who are 30-45 years old now.  There’s a myth that younger folks just want everything online, but when making financial decisions they almost always go back to mom and dad (take that, Robo Advisors).  
This group currently control $3.5 trillion in investable assets, but by 2050 they will likely be the beneficiaries of $16 trillion in wealth.  This group will control the lion’s share of investing in the future. To attract younger clients, firms are exploring:  lowered asset minimums, bringing younger advisors in to help them connect with younger clients, and integrating the latest technology.

Show, Don’t Tell

Providing clients and prospects with case studies is an excellent way for plan advisors to demonstrate the value they’ve brought to other clients, especially when the case-in-point client shares characteristics of the client or prospect the advisor is hoping to impress.  The advisors at the conference who’ve used case studies uniformly tout the benefit of providing this kind of detailed ‘proof’ to clients of both their capabilities and client successes. The Council currently features two case studies on the website, with several more to follow in 2016 representing the broad range of Advisors in Council membership.

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