From the infiltration of millennials in the workplace to increased Department of Labor oversight, 401(k) specialists are facing a much different landscape today than even five years ago.
While many of these industry changes seem outside of our control, one that stands to greatly benefit the way we do business is technological innovation. The world of technology is shaping the way and pace at which we do business, and 401(k) specialists constantly face new challenges with keeping up.
Today’s investors are spending an increasing amount of time on their computers and smartphones. As a result, they are expecting more mobile and technological capabilities from the companies and professionals they engage with—including their financial advisors. Simply put, investors’ lives are taking place online, and it’s our job to meet these needs by stepping up our technological game.
Despite investor demands, there are still many concerns among advisors when deciding to transition to a tech-focused practice. Seasoned advisors are settled into a way of doing business and hesitant to digitize their approach, while to others, the idea of selecting and implementing (not to mention taking the time to learn how to use) new capabilities can seem like a daunting task. But the fact remains that the industry is headed in this direction and both 401(k) advisors and retirement plan providers can profit from responding appropriately.
Three benefits to embracing technology
It’s not just employees who benefit from the infiltration of technology into the retirement planning landscape. There are many capabilities being explored today that help advisors streamline operations and ultimately deliver a better experience for clients.
- Practice management through web-based technology
With the shift to digital, more retirement plan providers now offer advisors access to their full book of business via an online portal. For example, our financial professional website features a dashboard from which advisors can easily research and tailor available plan investments and access read-only versions of both the plan sponsor and plan participant websites. This enables advisors to offer immediate, personalized and hands-on service to their clients, and they can easily leverage the available reports and tools when walking clients through their use and best practices.
The ability to manage a complete book of business in one central location at the advisor’s convenience has significantly reduced the time dedicated to ongoing plan maintenance. This allows more time to focus on expanding services to current clients and growing their practices.
- Efficient plan maintenance and client service tools
In order to best serve clients, advisors need the most up-to-date information at their disposal—immediately. This is especially important when it comes time to make updates to a client’s investment line-up. Gone are the days of fund lists that are updated quarterly, monthly, or even weekly. Today, there is an expectation for real-time data to be available to the advisor so they can more readily and effectively assist their clients with fund line-up changes. Digitized fund lists allow advisors to access the available funds at any time, eliminating the risk of choosing a fund that is no longer available.
With the DOL’s recent announcement of the final fiduciary rule, advisors are now expected to take on more fiduciary responsibility for their clients’ plan investments. Tools which allow real-time fund selection and management will make compliance with the new standards easier by facilitating the necessary investment research and timely updates.
- Systematic, streamlined compliance solutions
Because everything the advisor needs is right at their fingertips, technology is quickly adapting to compliance requirements. The task of providing necessary disclosures and other important regulatory documents to plan sponsors and employees has always been tedious, but technology is simplifying the process by allowing advisors to quickly segment their employer list to see which act as fiduciaries and are required to sign off on requests—and even sends them the documents needed to keep the process moving forward.
Of all the changes shaping the modern retirement landscape, the role of technology is among the most significant. The trend is strongly investor-driven, and undoubtedly has limitless client-directed implications for 401(k) specialists.
However, advancements in technology also have a lot to offer advisors looking to more efficiently serve clients. We believe this growing presence of technology will enhance both advisors and investors’ service experience, and we look forward to future innovations in the 401(k) industry.
Geno Cufone is Senior Vice President, Retirement Administration, at Ascensus, the nation’s largest independent retirement and college savings services provider. Cufone has helped Ascensus’ 4,000+ fee-for-service advisors improve their technological services, specifically through the development of the Investment Change Manager which allows advisors to manage client retirement investments via an online portal. Ascensus is headquartered in Dresher, Pennsylvania.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
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