What good are all the developments in 401(k) tech if no one uses them?
It was a rhetorical point made by Dorann Cafaro at The 2017 New England Wealth & Retirement Conference in Foxborough, Massachusetts on Friday.
“On the vendor side, there are some great things coming out,” Cafaro, founder and senior advisor of Cafaro Greenleaf, told the 401(k) and wealth management professionals in attendance. “On the advisor side, however, there are some really big holes.”
The panel, moderated by conference president Stephen Moylan and titled “The FinTech Revolution Continues, Tech Innovation and Data Management in the Retirement and Wealth Management Space,” included Ian Sheridan, co-founder and managing director of VC-firm Vestigo Ventures, and Ed O’Brien, CEO at eMoney, in addition to Cafaro.
“There was all sorts of infrastructure built as people turned from savers to investors between the 1970s and about 1989,” Sheridan said. “About $42 trillion in wealth was created, but now it must be upgraded.”
Comparing it to World War II battleships that were still used in the Korean conflict, he noted that today, the vessels “sailing out of the harbor don’t even look like boats,” and 401k and retirement planning technology must engage in similar upgrades.
“And we’re seeing it. There is technology being developed that understands the mindset of money, and recognizes that humans are central to it. There mining data on all of us in new and innovative ways.”
Which will lead to greater customization, eMoney’s O’Brien argued, noting “the days of ‘you can’t be a custom tech company’ and make money are over.’”
“We’re at a point in this world where if you can think it, you can do it,” Sheridan agreed, adding, “We don’t have to wait for Tesla or someone else to do it.”
Which is all well and good, but Cafaro brought it full circle, concluding, “Advisors feel like we all look the same, and that we’re marketing to one another. It’s very hard to differentiate ourselves.
“I need technology to help in three areas. The first is to find clients through a prospecting tool. The second is to keep clients and make them happy with a CRM through reporting and monitoring, and the third is to protect myself and my clients as a fiduciary.”
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.