Future State

It’s nearing the end of 2023—and, as per usual this time of year, I find myself pondering where time has gone. In working on this issue and cover story with Judy Faust Hartnett, our print editor, we were reflecting on what a pivotal time the past few years have been in the retirement plan industry and the advisory industry, especially for you at the juncture of the two.

The retirement plan space in particular tends to see huge change based on regulations—and the past few years, it seems, have seen more monumental changes than usual. While, yes, retirement reform is usually bipartisan and gets done even when other bills and initiatives stall, you usually see some breathing room between substantial bills. Since 2019, the Setting Every Community Up for Retirement Enhancement Act, the CARES [Coronavirus Aid, Relief and Economic Security] Act, and then SECURE 2.0 in 2022 have given the retirement plan industry much to work on as far as driving plan changes and improvements—all in quick succession. Advisers are also contending with regulatory efforts: the revised fiduciary rule—now called the Retirement Security rule—changes to Securities and Exchange Commission marketing rules, and more.

These legislative and regulatory changes accompany issues in the advisory industry itself, such as dealing with its aging population and need to recruit younger team members; significant merger and acquisition activity; and new competition for plan sponsor and participant attention.

For advisers, I see this as a time resembling the post-Pension Protection Act years, when there was dramatic change in how plan advisers worked with clients—e.g., widening their services in plan design, along with those in investments. Some advisers, after the PPA, worried they’d become obsolete if everything could be automated, and we’ve luckily seen that is not the case.

So here we are at a new inflection point. What does the plan adviser look like in the future? I don’t know but am excited to watch this space—as I do know there will be more than one model.

I think the core investment menu will remain important from a fiduciary standpoint but perhaps less so in ongoing conversations with clients. With 3(38) services continuing to grow, and adviser firms moving those decisions to their chief investment officer or other investment office, the client-facing advisers may get to spend more time helping plan sponsors focus on their goals and financial wellness—after all, without contributions and employee education, the best investments in the world won’t help participants retire.

There’s also the race to gather participant assets, and I’m intrigued to watch many firms previously without participant services or wealth management having added those to their offerings. I expect lots of attention in coming years on provider vs. adviser tools and support, as well as on conflicts of interest.

Perhaps most importantly, for the industry to remain successful, it has to make itself appealing to more potential members—to work on recruitment, notably of a diverse population—to support it in all areas, including client service, participant wealth management, and investment reviews, among others.

As the year ends, we’re also embarking on a new era for PLANADVISER’s editorial department and content. This is the last issue being printed and mailed to you. Our team will now focus on our digital experience—you’ve likely seen our relaunched website. Feedback from our readers said you prefer more video and audio content and enjoy the long-form news we increased this year. For 2024, we’ll bring you more of both, as well as expanded monthly Spotlight topics. You can also look for a quarterly multistory in-depth series: PLANADVISER In-Depth. We look forward to your response!