A Monday afternoon session at Excel 401(K): The Advisors’ Conference in Las Vegas tackled the intriguing issue of increasing assets under management using effective retirement readiness solutions, a win-win for financial professionals and participants that helps to answer a central question, “When can I retire?”
It might seem broad and open-ended, but presenter Ed Dressel, president of RetireReady Solutions, argued it’s all about simplicity, something of which the industry and consumers are increasingly aware (especially with Richard Thaler’s Nobel Prize win) but too often need reminding.
“Henry Ford famously said, ‘If I had asked people what they wanted, they would have said faster horses,’” Dressel began, noting that it’s up to professionals to take the lead in delivering effective solutions, as opposed to waiting for directional need from participants.
In retirement education particularly, they’re overthinking the issue, banking on sophisticated, complicated solutions.
“The retirement income software has been great at obliging that,” he said. “It should be the exact opposite; the constant focus should be on keeping it simple.”
He pointed to a recent Nationwide commercial as an example, one that illustrated how people don’t talk about retirement planning, “not because it’s not important, but because they get overwhelmed with all the details and minutiae. But if we can keep it simple with our focus then we can move the ball forward.”
A large advisory firm with whom RetireReady Solutions works has 700 employees, and it used a simple, one-page form developed by Dressel and his team.
“Everybody just loved it. And these are people working in the financial planning world. The industry typically tells participants to focus on three things; fees, fund and asset allocation, and they scare them if doing so. It doesn’t answer the central question of when they can retire. How does opening with asset allocation engage the individual whatsoever?
“Ultimately, the advisor increases asset assets under management when they help plan participants understand when, how and how much they need in order to retire,” Dressel concluded. “You are answering the questions that are important to them, and they are no longer glossy-eyed at that point. The fees, funds, and asset allocation are, of course, all important but they are derivative of that fundamental question.”