If you have been in the retirement business for a while, you know the industry constantly changes. At times, those changes cause plan sponsors and their advisors to shift focus in order to improve their plans. From fiduciary, funds and fees to savings and participation rates, there have been plenty of important issues to address.

Certainly, those issues have been and continue to be very important, but what is the real purpose you and your clients should be striving for? The spotlight is now on outcomes, commonly referred to as retirement readiness. That’s great progress, in my opinion.

We’re seeing how simple changes in plan design can make a tremendous difference in plan participants’ levels of retirement readiness. To help get participants on track, we generally recommend:

Automatic enrollment with at least 6% elective deferral
Automatic escalation of at least 1% per year up to 10%
Sweeping all existing employees into the plan at least one time at the default deferral rate
Stretching the match by using a formula that incents employees to defer at higher levels in order to get the full employer match
Using an asset allocation option as the qualified default investment alternative (QDIA)

This shift to a focus on retirement readiness offers you a great opportunity. After all, a lot of financial professionals still focus primarily on investment strategies and due diligence. Setting yourself up as the results-focused, retirement readiness expert could be a powerful way to differentiate yourself from your competition.

Consider these steps to integrate retirement readiness into your practice:

Get in the door. Evaluate your block and determine which plan sponsors to target first. Start with those plan sponsors who are concerned about improving their plans (eventually, though, you should have this conversation with all of your clients).

Taking time up-front to gather plan and participant level data can help you evaluate the plan, make smarter recommendations and get an edge over the competition. We’re working on a new plan analyzer app to make it easier and faster for advisors to give clients hard data on how specific plan-level changes could impact their percentage of employees on track for retirement.

Engage in conversation. Help plan sponsors understand the impact improved participant outcomes can have on their bottom line. Now is the time to illustrate the positive impact simple plan design changes can make not only on their participants’ retirement readiness — but also their organization's bottom line.
Make a recommendation. Use the data from plan evaluations and assessments to create outcome-based plan design recommendations tailored to each plan sponsor’s unique needs.
Follow up and add value. Provide ongoing education to reinforce the importance of participant outcomes. Encourage ongoing reviews and create a plan to stay in front of your clients with fresh, retirement readiness-focused topics.

Now is the time

Plan sponsors and participants need your help to make the progress that’s clearly needed. By diving deeper into plan evaluation and making outcome-based plan design recommendations, you can build a stronger practice and create a loyal following of highly satisfied clients.

Instant Insights /

4 steps to integrate retirement readiness into your practice

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