2022
PLANADVISER Retirement Plan Adviser Survey

Advisers: 2022 Pushing Retirement Industry Beyond “Set-it-and-Forget”

This year may be a watershed moment for the industry, as the steep drop in retirement savings is moving the industry to seek out and implement more personalized savings solutions.

2022 is shaping up to be a pivotal year for some retirement plan advisers in their approach to focus areas, personalized solutions and provider and asset management partners that can help deliver both, according to interviews with PLANADVISER alongside release of the 2022 Retirement Plan Adviser Survey. 

With defined contribution plan assets facing double-digit declines and few options for remedy, advisers say they are working with investment managers, recordkeepers and their own staff to move past the “set-it-and-forget-it” approach seen as the only realistic way to engage plan sponsors and participants.  

“We’re great at getting people into plans,” says Stephen Popper, managing director of SageView Advisory Group’s Boston practice. “Now we need to get people comfortable with checking in when they reach key decision points at ages like 50, 60 or 65.” 

Popper says market volatility, going back to the start of the pandemic in March 2020, has built up genuine need for participant education and personalized solutions such as adviser managed accounts.  

“In a sense, we’ve hurt ourselves with the ‘set-it-and-forget’ mentality,” Popper says. “We need to revisit accumulation and look at it from the perspective of [you] reaching 50 years old and having saved in a TDF, but now you might be better off in a managed account.” 

The combination of a drop in stocks and a major decline in fixed income stressed many participants and plan sponsors, says Barbara Delaney, founder and principal of StoneStreet Renaissance, which is part of HUB International.  

“We have been in the position of telling people that, no matter what asset class you had [in a traditional retirement portfolio], it was negative, and there was nothing we could do about it,” she says. “We’ve got to do better.”   

Boots on the Ground 

The economic and market shocks of 2022, advisers say, are pushing investment managers and recordkeepers to deliver on retirement strategies that have been in discussion for years, thereby providing “cradle to grave” financial stability. The bright side of the long journey toward these solutions is that the technology and resources are now ready for the moment, they say. Retirement plan recordkeepers and investment managers have been investing in tools, services and support, with advisers recognizing the commitment and reaching out towards firms they see as leaders. 

“We’re doing a total reset of our business model,” says Delaney, who founded her own advisory group in 2008 and sold it to HUB about three years ago. “You can’t automate retirement. You need to have people thinking about what they need and how you can help get them there.” 

Delaney says managed accounts have gotten little uptake over the past decade, but now is the moment to change that lack of interest.  

“My goal is to get the adviser community to embrace managed accounts, because we can’t scale personal advice to the masses,” she says. “We need to combine the technology we have with boots on the ground.” 

Delaney and her firm are doing this by offering video and in-person meetings for groups and individuals among their clients’ participant bases. The moment has also proven ripe to get plan sponsors to recognize a need for active management that can include alternative assets not subject to the movement of the stock and bond markets, she says.  

“When we’re dealing with people who are 10 years from retirement, we need ways to help them manage their portfolios to be prepared,” she says.  

Beyond Retirement 

Advisers are looking for ways to guide plan sponsors toward holistic financial wellness offerings, a term spoken about for years, but now more of an urgent need for many participants, says Jason Chepenik, a senior vice president in OneDigital’s retirement and wealth division. 

“You’ve got the stresses at home with your kids, the stresses at work, and then you see your statement is down 20%,” Chepenik says. “If you’re near retirement, then you’re going to start wondering how you’re actually going to quit.” 

It is important for plan sponsors to be there for participants with consistent, intentional messaging about how they can get support for the full range of their financial needs, Chepenik says. This communication is especially key amid continued staffing shortages. 

“Employees don’t always see the full value of what they have access to,” he says. “They’ll leave for a dollar more and not realize what they’re giving up from their current employer.” Over the past year, employers have continued to focus on workplace shifts resulting from the pandemic, the tight labor market and wage inflation, says Jim O’Shaughnessy, president of retirement and private wealth at HUB Midwest West. In 2023, he believes more plan sponsor committees will seriously consider customized saving solutions such as adviser managed accounts and financial wellness offerings.  

“We are focused on how to thoughtfully provide these types of services and do it consistently,” O’Shaughnessy says. “Historically, most advisers would be reliant on the recordkeeper bundling these options. … Part of the aggregation [of services] is for us to be able to have a seat at the table in working with the recordkeeping community on holistic solutions.” 

This evolution toward personalization is becoming essential as younger investors expect to see these types of savings options in workplace retirement plans, O’Shaughnessy says. 

“A lot of employers that would never have considered a managed account or in-plan financial coaching are talking about it and are interested in looking at it,” he says. “As these offerings become more mainstream, you’ll see an exponential growth in them becoming available in plans.”

Popper of SageView notes that implementing new retirement offerings relies in part on the trust employees have in their employers. It’s up to SageView, as the consultant, to provide potential solutions to the plan sponsor.  

“This is not a service I’m selling, but a solution I’m getting to deliver,” he says. “That’s the big opportunity in the marketplace, so long as we stay focused on the needs of the employee and their families.” 

—PA

Art by Changyu Zou