De-Gapping Retirement | Smith Bruer Advisors

De-Gapping Retirement

By Steve Hiraga

I recently attended the industry-leading EXCEL 401(k) conference with Rene in Las Vegas.  We were able to spend time attending sessions, meeting with other retirement plan advisors, speaking with retirement plan vendors, and discussing with each other how we can expand and improve our clients’ retirement plan experience.  Here are some of my thoughts and highlights:

  • We have moved past the discussion of the 3 Fs; fees, funds, and fiduciary.  While those still remain extremely important to retirement plan sponsors and are still benchmarks for all plans to monitor, it is participant outcomes that have emerged as the focal point for both plan sponsors and plan advisors.
  • Participant outcomes specifically focuses on how we are truly helping prepare employees for retirement and measuring retirement preparedness at all points of a career.  
  • It is up to plan advisors to help “de-gap” the U.S. retirement system. The coverage gap, or workers who do not have access to a workplace plan, can be “de-gapped” by advisors working with employers to find appropriate retirement plan solutions with the use of new technology and more competitive pricing.
  • The participation gap, workers who have access to a plan but don’t participate in it, can be “de-gapped” by advisors who work with employers who encourage time for one-on-one meetings combined with web based retirement tools and intuitive technology.
  • The savings gap, or employees who participate but don’t save enough, can be “de-gapped” by using one-on-one meetings and platform technologies that encourage features like auto-escalation and provide context as to what a career of savings will actually result in.
  • The retirement income gap, or employees who have saved enough for retirement but need guidance on how they should be spending, need established relationships with a qualified advisor who can provide guidance on exactly how long their retirement savings will last and how social security income will play a part in their retirement.

I genuinely believe that the retirement plan advisor community is well staffed to help attain these goals in a manner that will be truly helpful; serving as fee-only advisors with no commission products to sell and remain unconflicted under a fiduciary standard.  It will not happen overnight but we have the tools to overcome the current deficits of the U.S. retirement system.