PA: Obviously, there is a lot going on in the retirement space. Where is this market headed? What are the biggest challenges for plan advisers?
Augelli: First, from a high level, retirement readiness continues to be an evolving focus, and plan advisers need to move along with that change. In the past, plan sponsors and advisers most frequently worked together on employer-level issues—provider searches, investment reviews, pricing comparisons—the scope is now broadening to include an employee-level focus and centers around the challenge of retirement readiness.
As the work force continues to age, it’s in the best interest of plan sponsors and advisers to be focused on this important topic so they can best support the need of employees. Retirement readiness is an extensive subject that includes: the de-accumulation phase for retirees, how to manage your money in retirement, an appropriate income replacement ratio—just to name a few. Plan advisers need to make sure that they’re completely educated on the topics that comprise retirement readiness and have an employee education plan in place to support plan participants. Retirement readiness is going to be a continuing challenge and opportunity.
Second, at a micro level, one opportunity that’s being overlooked is the impact of the implementation of the Patient Protection and Affordable Care Act (ACA). Health care was formerly the single most important benefits package for key talent; retirement was widely acknowledged as second. As health care becomes homogenized, retirement plans come to the forefront as a way for employers to attract and retain their most valuable commodity: their employees. So, advisers have a great chance to get sponsors focused back on retirement and take advantage of that now.