We are beginning to encounter the first generation inAmerican society that has no pension plan to rely on, not tomention the other challenges they face in preparing for retirement.(Photo: Shutterstock).

The role of advisors who help 403(b) plan participants has been shifting forover 20 years, due to regulatory changes, new technology and therange of responsibilities an advisor can have.

From the beginning, individual advisors have been helpingparticipants in multi-vendor 403(b) plans witheducation, enrollment and obtaining distributions. Now, manyplan sponsors have been shifting plan models byreducing investment providers, lowering costs and seeking to addnew technologies that automate the enrollmentprocess.  Meanwhile, many plan consultants haveraised concerns about the difficulty in tracking individual advisoractivity, which makes it challenging to justify their expense.

Put simply, advisors can struggle to delineate the assistancethey provide to clients.

In the world of websites, calculators and robo advice, many403(b) plan sponsors have adopted the self-service model policiesof 401(k) plans, leaving decisions, education and advice in thehands of participants who are ill-equipped to make many criticalfinancial decisions independently.

Advisors need to adapt to the new age of information andtechnology. Below are four steps you can take to differentiateyourself in the 403(b) and 401(k) marketplaces:

1.  State your fees clearly – Manyrecordkeeping systems allow for advice models and advisory feesthat can be clearly seen by your clients, while mysteriouscommission-based products have been negatively covered by themedia.

Advisors bring tremendous value to their clients and should beconfident in their fee structures. Your clients may need to beeducated as they move from commission products to fee-basedproducts, but they appreciate clarity.

2. Offer service options – Let clients know thedifference between point-in-time and continuous assistance. Manyindividuals need continuous help; however, most people fear thelong-term commitment.

Offering flat-rate point-in-time assistance gives participants achance to try your services and get to know you as an advisor,while assessing their long-term advice needs. These are someaspects to consider when charging a flat one-time rate:

• Enrollment
• Distribution plan
• Financial plan
• One-time asset allocation

3.  Be a 403(b) expert – Many 403(b)plan sponsors are still adapting to the new regulatory environment.Some of them do not understand IRS audit triggers that can beavoided by proper communication to participants in the retirementplan. Examples include:

• Universal availability: The trigger is a low participationrate. The IRS is looking for a meaningful notice of eligibilitysent to employees annually.
• Contribution limits: The trigger is a W-2 higher than IRSlimits; some participants are eligible to contribute more throughthe allowed contribution catch-up options. The IRS likes to reviewthe sequence of allowable contributions: Elective deferral limit402(g), 15-year catch up (if allowed by the plan) and 50+ catchup.
• Distribution rules: The trigger is loan default. The IRS islooking for loan documentation and repayments.
• Other IRS topics: The IRS website lists issues a list of thingsthat its field agents commonly review when auditing: Top ten issues for IRC403b and 457 plans

4.   Be proactive – In thisworld of constantly evolving technology, individuals rarely feelable to ask the questions whose answers could assuage their fears.When the stock market is volatile, they need assurance thateverything will be OK. But the human touch is often missing intoday's environment of computers and cell phones.

Both time and emotion are tied to the largest asset most peoplehave – their retirement plan. If they are confident you'll beavailable when changes need to be made, they will likely pay forthat assistance. Newsletters, personal notes and phone calls canall have great value, while the human dialogue a professionaladvisor provides is often priceless.

Thirty years ago, advisors would help individuals with planenrollment and understanding their product vehicle. To bemeaningful today, advisors must provide a greater range ofservices. We are beginning to encounter the first generation inAmerican society that has no pension plan to rely on, so they needto determine how to create a distribution plan.

Individuals are also divorcing and inheriting plan assets, soprofessional advisors must help with these issues. Today'sretirement needs have created a larger role for advisors and it'sincumbent upon them to take on that challenge.Troy Dryer is Vice President ofBusiness Development at Investment ProviderXchange (IPX), a single-sourceend-to-end solution for providers in the 403(b) and 457(b) planmarkets. He has more than 25 years of experience in theretirement plan industry, serving in various management, sales,client relationship management and product leadership roles. Hisfirm recently published an educational paperto help 403(b) marketplace participants better understand thecompliance marketplace.

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