“Last year, I stood here and said you can either disrupt or be disrupted, and that has never been truer than now,” Hugh O’Toole said Tuesday at the Kohler 2018 Conference, an annual retirement plan study group held each summer in rural Wisconsin.
O’Toole, until recently senior vice president and head of Workplace Distribution with MassMutual and developer of its high-profile Viability product, told attendees that, “If you stay in your lane and simply act as a retirement plan provider, you are the least important benefit the employer has. You’re then subject to margin compression and all that comes with it.”
He compared the retirement plan industry to the cable company, the phone company and an Internet provider.
“I have an analog phone that only my father-in-law uses to call me. I wouldn’t have it if it wasn’t part of a cheaper, bundled package,” he said, before pointedly adding, “Don’t be the analog phone.”
The solution? Human capital risk management.
“Are you in data, information, knowledge or wisdom?” O’Toole rhetorically asked, referring to a presentation the day before from futurist Daniel Burrus. “Wisdom is the highest margin business on the pyramid.”
Claiming the industry rarely has an idea of where it’s going, but that it has never slowed it down, a key will be moving the data to what he called actionable analytics, “and you will be blown away by some of the things you find, because data doesn’t lie.”
It’s particularly relevant to the employer’s health care spend, which reinforced O’Toole’s earlier point about advisors straying from their lanes.
“The government has figured out how to encourage older employees to retire and save on health care costs, but we haven’t figured out how to effectively do it in corporate America.”
Responding to age discrimination concerns in a subsequent session, he emphasized that any such retirement encouragement must “of course be done right.”
“Many older workers want to be there, are a fantastic resource and positively contribute to the company’s culture and bottom line,” O’Toole concluded. “But some feel they have to be there, so if you’re encouraging them to leave when they’re not ready you’re engaging in discrimination issues and have a problem.”
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.
