Many advisers don’t track their time, which is a mistake,
said Randy Fuss, practice management consultant at CUNA Mutual Retirement, speaking on the “Keys to Profitability”
panel at the 2015 PLANADVISER National Conference in Orlando, Florida.
“You
need to understand the service you are delivering to the client,” said Jonathan
Blaze, regional retirement consultant at Thornburg Investment Management. “We
try to encourage advisers to create a service agreement to show their value,”
Blaze said.
“What are you worth?” asked Daniel Peluse, director of
corporate plan services at Wintrust Wealth Management. “[Your value as an adviser] has changed in the
past 15 years to how you move the needle and drive better results, not just accumulation.
That is why more retirement specialists will rise to the top,” he said.
At Wintrust Wealth Management, “we are an extension of the
committee,” Peluse said. “We view ourselves as an employee of the firm. We
communicate the benefit of the plan to participants and show them their income
replacement scores. You can’t just do quarterly meetings. It’s important to
educate plan sponsors about your value. We are with participants on a
day-to-day basis.”
“As to how advisers price their value, we are seeing a
standardization of measurement metrics of investments,” Blaze said. “That will
help us as we see continued consolidation of advisers. And, because of the new
fiduciary rule, we expect advisers will decide to be either a wealth management
adviser or a retirement plan adviser. As advisers leave the retirement plan
space, that will help you.”
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The rapid progress of tech advances has
brought a dizzying array of applications and software that helps plan advisers
to be more efficient and profitable.
Technology must be ready to support advisers in what they do
best: helping our participants retire, said Christen Marsenison, vice president in client services and delivery, Envisage Systems, speaking at the 2015
PLANADVISER National Conference in Orlando, Florida, on Tuesday.
Providers have an eye on what tomorrow looks like, she said,
as they scout solutions for what will make platforms move forward.
One challenge for advisers is juggling day-to-day
responsibilities and the associated technology tasks, added Steven Shackelford,
senior vice president, strategic sales at Aspire Financial Services. Managing
data is another big issue, Shackelford said. “Advisers are starting to move
toward consolidating vendor relationships in order to get the data they need,” he
said. A top concern is how to adapt the technology but still leave time for
their daily agendas.
Advisers are mulling how to use the many available resources
to provide better service and remain profitable, and they continuously struggle with a number of
questions, said Anders Smith, senior vice president at Nuveen Investments. These include: How do I use this technology to provide better services for my plan sponsors? How can I be more profitable in terms of how I run my business? How do I get
more out of each dollar coming in? “We believe technology can enhance a service model,”
Smith said.
Many resources exist to help advisers expand their business,
Shackelford said, such as private labeling capabilities, which can make a
business much more viable in the marketplace. “It makes you larger than what
the client sees,” he said. “You can expand your practice and boost visibility
in the industry.” Partnering with the right institutions allow advisers to
leverage the strength of the existing marketplace instead of building custom
solutions from scratch.
Technology can also influence how advisers manage retirement
plan practices and deliverables. Virtual recordkeeper partners can provide the
resources to help advisers provide participant education. Instead of holding
individual client meets, Smith explained, advisers can do webinars using an
iPad preloaded with information and materials, saving the cost of an assistant.
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Time management, and the costs of managing a plan
An ongoing issue with profitability means that advisers look
at the business more as a business. “They’re putting in plan information and
seeing what it costs them to manage a plan,” Smith said, adding that advisers
try to determine a billable hourly rate and how much time the adviser spends on
a specific plan.
“Advisers have a hard time tracking [hours] spent with each
client,” he said. “It takes time to track time.”
Gamification is gaining traction, Marsenison said, referring
to a practice to reward participants for certain behaviors and increase
enrollment. A recent study showed that 49% of men and women older than 28 spend
four hours a day playing games on devices or computers, Marsenison pointed out,
making the trend all the more vital for younger plan participants.
Millennials’ communication preferences are also a hot
interest, Shackelford said, and one that could influence an adviser’s own
practice with the use of alerts, to cite just one example. Another
characteristic of Millennials that will influence technology, Marsenison said,
is their level of trust. Study after study showed an enormous differential:
Baby Boomers ask the hotel concierge for a recommendation, but Millennials go
straight to Yelp.
“How does that change the business model, for a business
built on trust?” she asked. “They still need advice, but how do you get in
front of them? The technology will have to be very different.” Perhaps what is
needed, she said, is a Match.com for advisers.
“We’ll have to solve the issue of Millennials,” Shackelford added.
“They’ll be a big part of our growth.”
Technology is coming to define the recordkeeping industry in
terms of supporting plan sponsors and plan advisers. Advisers can address a
critical issue for plan sponsors—tools for participant enrollment—with
recordkeeper tools and services for education, Shackelford said.
“The industry has not yet solved how plan
sponsors can continue to increase enrollment in the plan,” he said. But the
industry is producing a range of resources for participant education, freeing
up the adviser to spend more time building a practice.