Along with the familiar discussions about in-plan guaranteed lifetime income, personalized managed accounts, SECURE 2.0 changes and improving participant outcomes, a couple of underlying themes emerged from two days of sessions at the LeafHouse National Retirement Symposium in Austin, Texas this week.
The most obvious? Many of the speakers—including LeafHouse CEO Todd Kading—said Firms throughout the retirement industry need to do a better job of collaborating with each other.
This was a topic that was brought up repeatedly during panel discussions, and was hammered home by Kading during Thursday afternoon remarks to the audience of about 200 retirement industry leaders gathered at the W Hotel in Austin for the event.
Kading put the industry on notice, saying the retirement market needs to “wake up” and at one point added, “We are going to change this industry whether people like it or not.”
Event moderator Nevin Adams had already warned the audience that the SECURE Act and SECURE 2.0 are great gifts the industry has been given, “But we better do something with it.”
“The tools are all there, folks,” Adams said, but warned that time is running out before the government runs out of patience with the workplace retirement plan coverage gap impacting small businesses in particular.
“We don’t want to turn this over to the government. That clock is ticking,” Adams said.
During a mystery-shot filled “Retireside Chat” featuring Kading, Prime Capital’s Scott Colangelo and Strategic Retirement Partners’ Jeffrey Cullen moderated by Adams, the heavyweight roundtable voiced a variety of frustrations in answering questions including what keeps them up at night and what “pisses them off,” among others.
Colangelo said he lamented that firms aren’t doing enough business together.
“We’ve got to start to communicate and figure out how we can help each other grow. We’re all leaving a lot of money on the table out there.”
Prime Capital’s Scott Colangelo
“It does bother me that there’s very little collaboration between advisory firms,” Colangelo said. “There’s things that we should be doing to partner with each other to help grow each other’s practices, to be more of a collegial community. I feel like it’s a very protective, sort of standoffish community.”
He noted that the big investment banks are “coming for our business,” and said the industry needs to figure out how to grow and bring in more talent or they’re going to come in and take the business. Starting a dialogue at industry events and communicating more with colleagues at other firms would help.
“I’m admitting I’m terrible at it too. We have to be better at it,” Colangelo said. “We’ve got to start to communicate and figure out how we can help each other grow. We’re all leaving a lot of money on the table out there.”
Kading reiterated the need to partner to achieve scale, and noted that partnering with other firms has always been at the heart of his business model.
“You have to partner. Realize that if somebody has already built it, and built it better than you can build it in any timeframe that’s rational, don’t get egotistical and think you should go build it,” he said.
Dealing with change
Kading also pondered why the industry is so slow to change—with “The Art of Change” being the theme for the symposium.
“What freaks me out and makes me perplexed is the absolute slow or lack of adoption of things that are obviously good for individuals. I don’t get it,” Kading said. “I don’t understand what it is that it’s going to take to get everybody to wake up to the things that are right for participants. Just because they’re different doesn’t mean that they should be scary.”
One possible reason the industry resists change?
“The only thing I can think of is fear,” Kading said, listing fear of change, lawsuits, fear of being different, and a fear of learning new things as obstacles.
Kading obviously has no problem with change. He pointed out that his company is quite different from even 5 years ago—as is its name. The company used to be called LeafHouse Financial Advisors, which was shortened to LeafHouse Financial. Thursday, he announced, “We are now simply LeafHouse – the technology solution for all things retirement.”
One other example from earlier in the event that also put a spotlight on the benefits of collaboration came from Mike Rosenberg, head of Retirement Investment Solutions at First Eagle.
Rosenberg told the audience that advisors are missing an opportunity to improve their business by not asking questions of firms like his that can provide invaluable feedback and insight based on the fact that they work with a wide range of advisors.
“We talk about product. You don’t ask us, ‘What are other top advisors doing that I could use to make my practice better? If I’m in your shoes, I’m asking me, ‘How can I do my job better?’ When I’m in your office, I’m going to ask you what my company can be doing better. You should be asking me what your company can be doing better.”
AI in play
Another theme? Artificial intelligence is coming—and it can be very beneficial if used strategically.
Fidelity’s Patrick Duffy noted during a session at the LeafHouse event that utilizing AI is absolutely critical to drive personalization, explaining how it can be used in concert with live channel support.
“The machines can see the behaviors of the participant and can instantly prompt the live channel rep to drive the conversation with the participant based on past behaviors,” he said.
Wednesday keynote speaker Thom Singer, CEO of the Austin Technology Council, said he sees the potential for AI to replace a lot of jobs.
“I really think that the biggest thing coming is generative AI. I think the technologies that are coming is huge, and the way it’s going to replace people is really big,” Singer said, adding that companies that now have 50 people may only have 25 after AI replaces them.
SEE ALSO:
• Best Laid Plans: Let’s Help People Not Go Astray
• Agenda of LeafHouse Retirement Event Focused on Embracing Change