There was plenty of “unfiltered” talk coming from the main stage of last week’s LeafHouse National Retirement Symposium—or the retirement industry’s version of Burning Man, as some (including iJoin CEO Steve McCoy) have called it.
And it wasn’t just from unconventional (for a retirement industry event) featured speakers Adam Carolla and Dee Snider, who enthralled attendees with their own unique stories of fighting convention.
“Unfiltered” was the theme of this year’s conference, and it delivered with some frank conversations about challenges facing the industry and opportunities to innovate and disrupt the status quo.
“Let’s leave here committed to embrace the raw truth, unafraid to challenge norms and go on to shape the future. Because only by being unfiltered can you truly make a difference,” LeafHouse CEO Todd Kading told attendees at the close of the two-day program Oct. 9-10 in Austin, Texas.
He used a quote from a Basil King poem—“Be bold, and mighty forces will come to your aid”—to illustrate how by being bold and doing the hard things, you may be shocked at the people and groups that will stand up and support you for doing so.
“By embracing the raw truth and engaging in candid conversations, we presented unfiltered concepts and sparked the kind of ideas that will truly drive us forward.”
LeafHouse’s Kassandra Hendrix
“So be bold,” Kading said, warning attendees not to live in their fears and be afraid to take action or change the way they do business. “If you heard something good here, I want you to think about making a change. I want you to think about doing something different,” Kading said.
“After this year’s LNRS, it’s clear that our industry is ready for change,” added Kassandra Hendrix, EVP, Corporate Strategy at LeafHouse and organizer of the event. “By embracing the raw truth and engaging in candid conversations, we presented unfiltered concepts and sparked the kind of ideas that will truly drive us forward. LNRS wasn’t just about retirement—it was about reshaping the future and pushing the boundaries of what’s possible.”
Here are a few themes that came out of this year’s LNRS:
Collaboration over competition
“Stop recreating the wheel. Partnerships and collaborations matter,” Kading said. “Seek first to partner, compete when you must, and when you do that, do it in a very ethical and friendly manner.”
During the “Retireside Chat” panel discussion, there was consensus that firms should partner, share and grow this space as opposed making it easier for outside firms to come in and compete against them.
“We all get better because we’re sharing, and it makes us show up better for our clients,” said Jania Stout, SVP, OneDigital. “I’m all about collaboration.”
Kading said the idea that “we go it alone” is a silly concept. And so is sticking with something just because it’s always been done that way. “Stop doing things the way you’re doing them simply because it’s the way it’s been done. You have to start doing things for a reason, not because that’s the way it’s always been done. When someone shows you a way that is provably better for the end user, you have to make a decision to not do things the way you’ve always been doing them.”
Need trumps demand
As ERISA attorney Matthew Eickman has said, need trumps demand when it comes to the retirement industry. Kading seized on that idea, noting how retirement plan enhancements such as auto features and target date funds were not the result of demand from participants.
“There was no groundswell of citizens demanding that they be auto enrolled in a retirement plan. There was no demand for that—there was a need for that,” he said, adding that target dates came about without public demand as well.
With TDFs having been entrenched for years and SECURE 2.0 putting new weight behind automatic enrollment, what does the industry need to provide next that Americans don’t necessarily know they need yet? In-plan guaranteed income solutions.
“They just do. If you ask them and you don’t use the word ‘annuity,’ they say ‘yes’ every time,” Kading said.
New era of personalization
The new era of personalization is here, and the industry needs to embrace it.
“You’ve got to be open to adoption. This is going to happen whether you want it to or not. Because people demand personalization,” Kading said. “I would argue they need it.”
Personalized target date funds are becoming more widely available, and AI is making it so more data points are available to be able to personalize. That can be especially helpful in personalizing newer products such as guaranteed in-plan income solutions.
“The second you insert in-plan income solutions into the mix, it begs for personalization. Because people don’t understand them,” said Jeff Cullen, CEO and Co-Founder of Strategic Retirement Partners, during the “Personalization Proliferation panel session. “If we can just preprogram all those data points in there—wow, gamechanger. This is going to be such a better experience.”
Stop trying to put recordkeepers out of business
It came up more than once that everybody’s been pushing 401(k) recordkeepers to slash fees, but they still want better service.
“You make sure they make almost no money, and then you wonder why they can’t build what you want,” an exasperated Kading said of the dilemma recordkeepers face. “Let’s stop doing that.”
Scott Colangelo, Chairman and Managing Partner of Prime Capital Financial, said the RIA community needs to be more unified and do a better job of communicating with recordkeepers.
“We have to be better partners to them. We can’t all go to them and ask for 10 things,” Colangelo said during the Retireside Chat. “We should all be communicating and saying, ‘What are the three to four things we need to be successful as an RIA community?’”
A couple of other quick takeaways?
• Don’t fall for the myth of the 3-year track record—as in, something has to have at least a 3-year track record before you’ll invest in it. Adhering to that is a good way to miss out on huge opportunities, Kading said, noting examples like Google, the Janus Henderson Enterprise Fund, or the Putnam Large Cap Value Fund. “Stop doing stuff like not adopting things because it doesn’t have a 3-year track record,” Kading said. “If you believe that, you missed out on 3,000% return in Amazon if you waited for the first 3 years.”
• Push lawmakers to get CITs in 403(b) plans across the finish line, which Kading noted could save participants in those plans significant amounts in fees. A bipartisan group of four Senators introduced a bill in August that would allow 403(b) plans to include collective investment trusts as part of their investment menu options. Under current law, unlike 401(k) plans, 403(b) plan sponsors are not able to use this stable, lower-cost investment option in their plan. This legislation would create parity between 403(b) and 401(k) retirement savings plans, benefitting over 15 million employees at hospitals, universities, charities, and other non-profit organizations. The bill has widespread support, including from the American Retirement Association and the Investment Company Institute.
SEE ALSO:
• Wealth@wor(k): AI in Wealth and Retirement, Guaranteed Income, and a Big Announcement
• Retirement ‘Unfiltered’ in Austin: Kading Says LeafHouse Event will be ‘One for the Ages’
• Retirement Income: Participant Needs Trump Demand