Add Jonathan Young to the camp that says there has never been a better time to be a retirement plan advisor than right now.
The Senior National Accounts Manager at Capital Group | American Funds told the breakout audience at the Broadridge Fi360 Solutions Annual Conference 2023 in Scottsdale, Ariz. on Monday that a perfect storm of three confluent events has created a remarkable opportunity for advisors: 1) volatility in the markets; 2) SECURE 2.0; and 3) the wave of retirement plan litigation.
“This creates opportunity for you to be more valuable,” Young told the room full of 401(k) advisors, adding that the market is ripe for not only startup plans, but also for taking over existing plans.
“We have the perfect storm. There’s never been a better time in my opinion to sell retirement plans.”
Jonathan Young
“We have a unique opportunity today, right here, right now, to create the future practice we want. It’s very rare that we have the tailwinds that we have today,” Young continued. “Is everything perfect? Oh goodness no. There’s a lot of things left to do. But the good news is the tailwinds are behind us. We have the perfect storm. There’s never been a better time in my opinion to sell retirement plans.”
He added that with everything going on right now, plan sponsors need help from advisors perhaps more today than ever before. “We’ve got to make sure we are helping plan sponsors take advantage of these opportunities.”
During the session, titled, “Lead the Pack in 2023: 5 Retirement Plan Trends to Help Define Your Practice,” Young covered trends he said are shaping the future of the retirement plan business and how to apply them to help expand the advisor’s practice.
He listed them as follows:
1. Tailwinds to expand retirement plan coverage
2. Expanding role of employer sponsored retirement plans
3. Retirement income
4. Personalization
5. Ongoing retirement plan litigation
SECURE 2.0 is creating plenty opportunities for advisors all by itself, thanks to a number of provisions intended to incentivize small businesses to start up retirement plans to address the coverage gap.
Agreeing with viewpoints shared by Fred Reish, Young said the SECURE 2.0 tax credits to encourage small businesses to start plans are the most generous he has seen in his 30+ year career in the industry.
Young also stressed that SECURE 2.0’s emergency savings account and student loan repayment match provisions—where employers can make matching contributions into a 401(k) for employees participating in those programs—can expose younger and lower-income employees to the benefits of saving in 401(k) plans and encourage them to save more.
“I do think it will bring the next generation of investors in to retirement plans,” Young said.
Among the other opportunities Young covered in his presentation were helping plan sponsors with the retirement income solution equation, pointing out that currently only about one in five advisors are actively addressing the issue of retirement income plans. “We need to make sure we are having more conversations around retirement income,” Young said.
The trend toward increased personalization of retirement accounts is another area he singled out as an opportunity, and said the ongoing retirement plan litigation environment also presents opportunity for advisors to offer direction.
SEE ALSO:
• Broadridge Fi360: ChatGPT, SECURE 2.0, and a Rebrand
• Broadridge Fi360: Preparing for a Growing Market