Editor’s Note: This is part of an ongoing series that provides a look at content available through the NTSA Advisor’s weekly MarketBeat feature, an archive of which is contained in the Industry Intel section of the NTSA website here. This installment concerns serving clients and participants.
Communication
Improving the Client Relationship Through Effective Communication
A Jan. 28 session at the NTSA 30th Anniversary Summit offered tips from Toews Corporation Director of Sales and Marketing Eben Burr on how to adjust one’s ways of communicating in order to boost one’s practice, effectiveness and service.
Participants: Be Concise and Cut the Jargon
Recent research shows that retirement plan participants are among those who prefer communication that is not riddled with jargon and “inside” terms that are familiar to plan providers, sponsors and administrators but mean little to those whom the plans serve. John Iekel discusses a report about communications and how it is worded.
The Importance of Effective Retirement Plan Communication
Having a retirement plan and a commitment to facilitating employees’ saving for their retirement is important. John Iekel discusses a recent blog entry that argues that the good that accomplishes can be blunted if the employer and the plan administrators don’t communicate about the plan effectively.
Communication Best Practices
Communication with employees about benefits is always critical. And in 2020 there’s an added wrinkle—the pandemic. John Iekel writes about a recent column that argues that current challenges have changed the rule book and offers suggestions on communicating in this upended environment.
Context and Clarity Key in Communicating with Participants
Communicating with participants is, well, required. But more than that, it’s central to helping participants make the most of their participation in a plan. John Iekel writes about an industry insider’s argument that it is best to use an approach that is clear and presents information in a way that makes it real and actionable.
Plan Participants to Sponsors: ‘Watch Your Language’
A study reports that many participants often find their DC plans confusing and wish for clearer language to help them understand their options and make more informed decisions, writes Ted Godbout. He adds that the study examines the impact that language can have on participants’ overall understanding of plan investment menus, the potential benefits of staying in the plan post-retirement and how best to communicate retirement income benefits.
Serving Clients and Participants
Financial Literacy Workshops: Helping Your Employees Fill Their Savings Gaps
A new report of reductions in state pension benefits (published by the Center for Local Government Excellence in April 2014) should cause employers to have a new sense of urgency in helping employees participate more fully in their voluntary retirement savings (403(b) plans) and deferred compensation (457(b) plans) plans so that employees can comfortably retire at normal retirement ages. Ellie Lowder discusses the report, and the changes that a number of states have made their sponsored retirement plans.
Knowing the Client May not Always = Knowing Client Needs
In order to serve a client effectively — and fulfill fiduciary duties, BTW — a fiduciary of course must know their client. And one also must pursue the client’s best interest. But it’s possible that those goals may not always be congruent; in fact, they may even be mutually exclusive. John Iekel discusses a blog entry that makes that argument and discusses what it means.
Separate the Wheat from the Chaff
We have more access—and easier access—to information than at any time in human history. John Iekel discusses a recent blog entry that argues that a good fiduciary can identify which information will most affect clients and their accounts.
A Giant Leap for Mankind…
Nevin Adams writes that as we ponder the accomplishments and planning that helped our nation put men on the moon, it’s worth remembering that our “mission” is not only to get tomorrow’s retirees safely to retirement, to take those “small steps” along the way—but ultimately to position them and their finances to carry them safely through retirement… to their “tranquility base.”
Helping Participants Make the Most of Their Paycheck
The relentless “save more” message from the retirement industry is quickly becoming dated. Participants are more aware than ever that there are competing interests for their next dollar and retirement savings may not be at the top of their priority list. Shelby George and Cherie Moser offer insights on what employers can do to provide participants with robust financial wellness programs that assist with basic financial education and cash flow tools.
Understanding the Mindset of Participants Who Take Loans
Most participants tend to be under financial stress when taking a loan from their retirement plan, so repaying it becomes an afterthought that later adds to their stress, says a 2019 study. Ted Godbout writes about a survey of 500 plan participants who took at least one plan loan; it included in-depth interviews.
Making a Change to a Retirement Plan? Grandfathering May not Be a Panacea
It’s common practice to put some kind of grandfathering in place when a change is made to a retirement plan. John Iekel discusses a recent analysis that observes that grandfathering some aspects of retirement plans may be helpful, but in some circumstances, it may only seem to be so.
What Do Rising Prices Mean for Retirement Saving?
We all know what rising prices mean for the pocketbook and balances now, but what do they portend for retirement plans and saving? John Iekel writes about Chris Carosa’s discussion of what a plan sponsor can do within to help plan participants incorporate inflation into their retirement planning calculus.
Helping Participants: More than Providing a Plan
The most important step in helping employees to save for retirement is to provide a plan in which they can participate. But a blog entry argues that is only a first step, and that there are important matters that should not be overlooked.
Considerations for Plan Sponsors Mulling SDBAs
While the current environment appears ripe for self-directed brokerage accounts (SDBAs) as various plan participants welcome the opportunity to select investments that reflect their values and priorities, plan sponsors should carefully consider the tradeoffs, a study suggests. Ted Godbout writes that while SDBAs provide retirement plan participants with access to numerous investment options, the resulting investments can also create potential risks to those participants and plan sponsors, according to the findings.
A New Matrix for Personalizing Retirement Income Strategies
A new study identifies a set of scorable retirement income factors that can help define preferences for an overall retirement income style, which can point toward an appropriate retirement income strategy. Ted Godbout writes that the researchers explain how they developed a multidimensional tool based on an analysis of existing research and a multipart survey of more than 1,400 participants.
Advisors Should Educate the Educators
Teachers are woefully unprepared for retirement, argues Edward Dressel, and most are not even aware of what their retirement picture looks like. He argues that rather than leaning on legislatures, we should remember problems often create opportunities, and that proactive advisors could use this as an opportunity to grow their business.
How to Improve Retirement Readiness in Under-represented Groups
Ted Godbout writes about a new paper that outlines plan features and strategies that can help bolster savings for underserved workers and can help plan sponsors that wonder what they can do to help diverse workers increase their retirement savings.
Providing Advice
Delivering Investment Advice: Key Differences between 403(b) vs. 401(k) Plans
Asset allocation models are among the key drivers that advisors use to provide education and advice that will help participants make the best possible decisions about saving, investing and preparing for retirement. Amy L. Simonson and Robert J. Toth provide a discussion of the use of such models and the sensitive issues that can entail.
Outside of the Box: An Approach for Providing Participant Level Advice
Amy Simonson writes how more Americans than ever are feeling worry about their ability to retire one day, and she discusses how advisors can help them save and grow their nest egg, starting right now.
Robo Advisors: ‘Danger, Will Robinson’
Robert Young discusses the increasing use of robo advisors and argues that they are here to stay, but that nonetheless human advisors remain important.
Why Personalized Advisory Services Are Essential for Retirees
Ted Godbout looks at a paper in which Cerulli argues that there is no one-size-fits-all solution to making plans more effective decumulation vehicles, and that it often takes a personalized experience that includes designing a comprehensive financial plan and an investment and withdrawal strategy that meets retirement investors’ spending requirements and long-term objectives.
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