Expert Panel: Today’s Retirement Plan Advisories Require Specialization

An evolving small business market, increased regulation, and shifts in client needs all lead to more specialized retirement plan advisement, according to a panel held by American College.

As financial planning matures, retirement plan advisers will benefit by either working with a team of specialists, or learning about areas their clients’ areas of concern, according to a panel held Thursday by the American College of Financial Services.

In the current retirement landscape, a small business client may look to their adviser for areas ranging from wealth management to insurance needs to succession planning, said Heather Welsh, a comprehensive financial planner and wealth planning department leader with Sequoia Financial Group. An adviser isn’t expected to be an expert on everything, so should look to partner with those who have the knowledge she does not.

“You have to subjugate your ego,” Welsh said on the webinar. “When you sub-specialize it’s not your client, or my client. It’s about getting the best team together to meet the needs of the client.”

Client requests for more than just retirement planning has been a theme since the pandemic and Great Resignation have led to changes in the workplace. Meanwhile, as much as 74% of small businesses still do not offer a retirement plan for employees, according to a survey by ShareBuilder 401k, leaving plenty of room for adviser engagement.

Welsh said it’s important that when a client has a question on something like retirement income, that they can get on the phone with the “right person.” That means either an adviser has to be skilled in a certain area, or that there’s a team member to turn to for help.

“It’s a consolidation of expertise,” she says. “Not everyone has both the client-facing skills and also a deep knowledge for all the range of different client types.”

New or proposed legislation, which has ramped up in recent years, has also created the need for further specialization, according to the panelists. That includes areas like the tax code for small businesses, said Michel Finke, professor of wealth management at American College.

“It’s an evolution that advisers need to adjust to, and it’s very complicated,” he said.

Finke also noted that when advisers can provide specialization in areas ranging from investing to college saving to estate planning, it can lead to stickier, longer-lasting clients.

Terry Parham, chief financial officer and financial planner with Innovative Wealth Building, said many of his clients run their own businesses while acting part time, or are working in multiple jobs. That has required the Los Angeles-based adviser to gain educational expertise in a variety of areas, with more learning to come, he said.

“On the retirement income side everyone is going to ask about Social Security, they’re going to ask about Medicare,” he said. “But many advisers may not know about those issues. You have to get smart on those basic things.”

When advisers are working with a small business, they need to be aware of how their recommendations will impact the company’s cost of doing business in the long run, said Scott Winslow, a managing partner with Nabell Winslow Investments & Wealth Management.

“You give yourself a lot of credibility when you explain what you’re doing and how it’s not going to effect the cost basis of a business,” Winslow said.

Winslow, who has a boutique advisory firm, says he works with partners to provide holistic retirement planning to clients.

“We get together the best team possible so the client can look around the table and say ‘hey, they’ve got this covered,’” Winslow said.