The American Worker – A Recipe for Financial Success
By Brad Arends, Co-Founder + CEO of intellicents
Over the past several decades Retirement Plan Advisors (RPAs) have done a commendable job assisting plan sponsors with their duties to oversee their retirement plan’s funds, fees, and fiduciary governance – the “triple F’s” of our industry. Consequently, investment menus have improved, and plan costs have come down.
RPAs have also assisted plan sponsors with progressive plan designs, making “auto” a standard feature for their 401(k) and 403(b) clients. And those RPAs that include coordinating participant services in their offerings have further improved participant outcomes for the American worker by teaching them how to effectively use the plan to accomplish the ultimate goal of achieving a “permanent vacation” known as retirement.
Accomplishments aside, we cannot yet be done...
The wealth management industry is addressing these same issues for owners, upper management, and the affluent. But this same industry acknowledges that they have little time or interest in providing this service for the American worker that they openly refer to as “the Underserved”.
It is up to the RPAs to develop a platform to also get the American worker “through retirement”. Our biggest challenge will be participant engagement, and it will take both people and technology to develop the relationships with them to succeed.
From a people standpoint, a team of retirement, wealth, and health professionals must converge to provide one resource for all participant questions, many of which will be financial planning issues. Consequently, RPAs must recruit CERTIFIED FINANCIAL PLANNERS™ (CFPs), using their participant base to attract them. They then must be seamlessly integrated into a service package where the RPA assists the participant with plan questions and guidance to help get them “to retirement”, while the CFP® assists with comprehensive financial issues and planning to get them “through retirement”. The progressive RPAs will also add group insurance professionals to their team to assist participants with benefit questions and Medicare enrollment at retirement.
For supporting technology, in addition to robust investment / asset allocation, financial planning, CRM, and call center tech, the RPA must implement a data repository where it can collect and house participant data provided by the plan sponsor, the plan’s recordkeeper, and the plan’s participants.
The most logical solution would be a participant app sponsored by the RPA that immediately engages the participant, motivates them to add additional information, delivers timely targeted messaging, and provides direct access to the RPA’s professional advisors and CFPs for actual advice when desired.
Plus, the plan sponsor must have access to a dashboard providing an aggregate view of the overall financial health of their workforce and easy-to-read utilization metrics.
The RPA must then complement its people and technology with an education campaign to meet participants “where they are at”, including onsite group meetings and one-on-ones, videos and webinars, emails, and an 800# financial hotline addressing…
Budgeting
Debt / credit management
Emergency savings
Life insurance
Retirement planning
Retirement income planning
Social Security / Medicare
Investment management
Major expense planning
Tax planning
Estate planning
Employee benefits
HSA maximization
Charitable giving
And finally, for those participants that desire to fill in all the financial details, the platform must be able to provide the entire workforce a personal comprehensive financial plan, and ongoing support services.
If the RPA industry does not build this, the recordkeepers will. In fact, it’s already being done by four of the largest recordkeepers!
It is up to us. We have done this before when we found solutions to poor 401(k) participant engagement. Nobody has better access to them than us.
-Brad Arends, Co-Founder + CEO of intellicents
