Latest Perspectives

On July 27th, the RLF hosted our annual DCIO Executive Forum and this year was definitely different than most.  The sentiment in the room was that the business has gotten significantly more difficult.  Relationships matter less, metrics (performance, fees) matter more than ever before, margins remain under pressure, and competition for large flow opportunities (plan QDIAs) is fierce.

Since the concept of the QDIA was first introduced by the PPA in 2006, it’s taken the DC world by storm.  There’s no shortage of statistics to prove the point: a recent Callan study found that more than 90% of plans use a QDIA as their default investment option and Cerulli predicts that by 2020, 90% of all new assets will flow into a QDIA.

As the boomers move into retirement, Millennials are making their mark on the workplace and will soon become the largest presence in our workforce.  By 2025, 75% of global workers will be Millennials.1 Providers have devoted a good amount of time to learning about how to engage Millennials, understanding their perspective on retirement, and their perception of financial services firms.

We have a lot of discussions with our members about their key issues, and growth of the core DC business always tends to top the list. In the small market, this conversation often includes Multi-Employer Plans (MEPs) and whether these products hold the key to small plan profitability. For those less familiar with MEPs, they provide a way for small employers to band together into a single plan and gives small employers access to products and pricing often reserved for much larger plans.

Technology is a perennial topic for our members, and interest in the topic increases each year as firms look to use technology and data analytics to engage participants as well as plan sponsors. Across the board – in the plan business and in other lines of business – financial services firms are looking for opportunities to leverage technology and most believe there is more they could be doing.

It’s a bit of a paradox.  As retirement assets continue to reach record levels, the providers of retirement services to these savers face tough growth prospects and shrinking margins. Nowhere is this issue more prevalent than with defined contribution recordkeepers, who have faced pressure for years and see no end in sight (according to a survey that we published in our recent retirement trends research).

Our May 15th newsletter featured a link to our new HSA Blog and it received more clicks than any other content we’ve shared.  We also received a number of follow-up requests looking for more information on the HSA business.  Recognizing the interest in the topic, we wanted to share additional resources that should helpful as you and members of your team consider the HSA opportunity.

If you subscribe to any of the regular retirement industry publications or have been to a conference in the last 6 months, you’ve been hearing and reading about health savings accounts.  Traditionally, these triple tax-advantaged accounts have been viewed as a resource to help individuals pay for immediate medical expenses and have been sold as a bolt-on product by health insurance providers.

The Retirement Leadership Forum attended NAPA’s 2017 401(k) Summit. After three days of sessions and networking with our members, some key themes emerged: Government-driven change is coming. The uncertainty of exactly how and when the Fiduciary Rule will take effect is making industry professionals uneasy. A proposed 60-day delay of the rule is under review, and Washington experts anticipate additional delays.

Welcome to the RLF! The Retirement Leadership Forum is dedicated to the research and advisory needs of senior executives at the leading providers of employer-sponsored plans and investment solutions. We offer a full suite of executive decision-making resources, each focused on a simple concept: helping executives affect change that drives growth and profitability.