Where are 401(k)s headed and how can smart advisors capitalize?
It’s an evergreen question I routinely put to the industry’s best and brightest.
Jeff Cullen, a managing partner and managing director of the Great Lakes region of Strategic Retirement Partners, was more than happy to answer (although in a clipped, no-nonsense style).
Strategic Retirement Partners, for those that don’t know, has 15 offices across the country and is expanding rapidly. Managing director Lisa Petronio was also 401(k) Specialist’s Top Advisor by Participant Outcomes in June 2017.
Clearly, the firm, and Cullen, have a lot happening, which is an indication of 401k future trends overall.
What trends do you see in the retirement plan industry?
The entire defined contribution experience will be remade to appeal to its new buyer; the millennial.
How will this impact retirement plan specialists and their practices?
Advisors need to have content that is broad in scope, available on demand and the ability to engage directly when the participant is looking to take the relationship further.
In most cases, this engagement is the first financial advisory experience most millennials will experience. First impressions will mean everything. Advisors will need to do the same for committees as well.
How can advisors capitalize on this trend?
Technology, intellectual capital, and human capital are required to create scale, efficiency, content, and an experience of this magnitude.
Advisors will have some very difficult decisions around renting, buying, or teaming up to deliver this experience.
The consolidation curve in any industry is slow at first. Yet, the second phase is like a hockey stick growth-event for the haves, while have-nots slowly stagnate and struggle to survive.
Many of my peers believe, like me, that we are three to five years away from “Phase 2” of the curve, which doesn’t give advisors long to solve this puzzle. Otherwise, their business could become a depreciating asset.
Ross Marino, CFP, CPFA, CeFT, is the founder and CEO of Advisor 2X | Excel 401(k) and Transitus Wealth Partners. He can be reached at rmarino@rekonintel.com.
