Commoditization, roll-ups, earnouts—all (metaphorical) death for “traditional advisors” in the 401k space who are not scaling their practices, which illustrates a need to diversify service offerings now more than ever.
A singular focus on the “three Fs” (funds, fees, and fiduciary) and doing the best they possibly could for a retirement plan, while noble, is simply no longer enough.
It’s the reason GRP Advisor Alliance and BidMoni, a registered investment advisor that provides technology to the retirement plan market, recently teamed to release an innovative dashboard. It makes it easier for advisors not only to offer, but to track and streamline, ancillary services to help sponsors and participants.
“This technology is emerging because advisors were once primarily specialists,” GRPAA’s Bill Chetney, Jr. recently explained. “But now commoditization at the industry and advisor levels, and resulting margin pressure, means it’s either the big get bigger or you have to diversify your business.”
Two major issues with which companies and consumers currently struggle are financial wellness and student loan debt, with the latter totaling an eye-popping $1.7 trillion that affects 44% of Americans.
“What does that mean?” Chetney rhetorically asks. “People are looking outside of the singular-focused 401k plan to add more services, which is also more to manage.”
While normally handled by a recordkeeper, the sheer volume of these new benefits, features, and the new dynamic overall has the role of the advisor rapidly evolving, and the reason tech is central to success moving forward.
Dashboard details
“The partnership with BidMoni is really, really timely,” he adds. “It’s something that more and more people in the industry are going to see, either from BidMoni or other solutions like it. It’s a dashboard that contains all of the benefits in one place, in one intuitive view that’s both plan sponsor and plan participant- facing.”
The backend would be advisor-facing and include RFP benchmarking, a prospecting feature, and more.
“Let’s say you start cold with the tax-filing—I mean, how much colder can you get?” Chetney says. “You can bring that through, and if you move along in the sales process and win the business, during the onboarding process you’re able to then include insurance solutions in the conversation, or wealth management dollars for assets outside of the 401k. They might have employees with a lot of student debt, and there are all sorts of other widgets that might be appropriate for their worker population to better attract and retain talent.”
A number of advisors have customized the dashboard to their shops (“tailor-making it,” as Chetney calls it) since each has a different value-add.
“Everyone has a different strength,” he concluded. “But we think that product and service-offering trend, combined with this technology, is a win.”