Expanding access, increasing participation, boosting engagement and improving outcomes in 401(k)s are four key challenges at this critical time for the workplace retirement plan industry outlined in the inaugural “Next-Gen 401(k) Report,” published today by Minneapolis-based KWP Growth Partners.
Alongside the four key challenges, the report identifies 12 transformative trends shaping the future of retirement (six in “Innovation and Market Dynamics” and six in “Evolving Financial and Workforce Solutions”) and highlights 60 leading digital-forward companies driving innovation.
“This report helps equip industry stakeholders to better understand the forces reshaping the retirement market, anticipate disruptions and recognize new opportunities,” said Will Prest, managing partner at KWP Growth Partners. “We believe the biggest opportunities lie in partnerships, and the next frontier in integration is where these Workplace RetireTech companies connect, creating an orchestrated ecosystem.”
The report builds upon the firm’s previously released RetireTech Map, a first-of-its-kind resource providing a clear, organized view of RetireTech companies.
Nearly half of U.S. retirees report significant anxiety over spending their retirement savings, according to the latest research from the Alliance for Lifetime Income. At the same time, the retirement industry is at an inflection point, driven by advances in AI, data portability and the democratization of financial wellness.
KWP Growth Partners prioritized digital-first companies in its approach, highlighting companies that embrace a challenger mindset, leveraging technology as a core enabler to modernize services, enhance user experiences and reduce barriers, including cost and complexity. The analysis also includes legacy innovators that have continually evolved by embracing digital transformation to address client needs.
“These technologies have the power to help the industry stretch, expanding coverage with a higher probability of success,” said Lisa Kottler, KWP’s partner of strategic growth and innovation. “Our aim is to help pull this ecosystem together, to create collaboration and transparency and collectively solve the industry’s key challenges.”
Kottler added that advisors have a unique opportunity to lead the next evolution of retirement by embracing modern tools, testing new partnerships, and solving real client pain points. “With the right mindset and tech, they can shape the future instead of reacting to it.”
The report identifies innovators who are tackling the industry’s most pressing challenges while driving ecosystem-wide improvements, such as:
• Assisting underserved markets, including small businesses and communities of color.
• Enhancing industry infrastructure to modernize operations.
• Automating plan management and processes to improve efficiency.
• Reducing operational friction and simplifying account transfers.
• Supporting retirement plan professionals, including advisors and providers.
“We leveraged our deep experience across both institutional complexities and start-up agility when creating this resource,” Prest said. “Our goal is that industry stakeholders are not just asking, ‘how can we optimize?’ but ‘what unmet needs can we solve?’”
Next-Gen 401(k) Report authors Prest and Kottler recently joined the 401(k) Specialist Podcast to discuss how they created the report and what it can do for industry stakeholders.
SEE ALSO:
• 401(k) Specialist Podcast: Creating the ‘Next-Gen 401(k) Report’
• ‘RetireTech Map 1.0’ Highlights Retirement Plan Industry Innovators
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.