As the nominations for the prestigious Wealth Management Industry Awards wind down, it’s important for the RPA industry to participate for a number of reasons—starting with the convergence of wealth and retirement at work.
Begun eight years ago, the Wealthies were created to recognize the many companies and services that support advisors to help them manage their practices and provide better outcomes for clients. Most awards, especially in the 401(k) market, focus on the advisors and plan sponsors. But where would they be without the help of providers, technology companies and home office professionals? It’s why the NAPA Wingmen Awards recognizing the top DC wholesalers that I created for NAPA were so popular even though I got stiff resistance at first.
Recognizing the importance of enabling providers and the convergence of wealth and retirement are important enough, but there’s an even more critical role of the Wealthies for the DC industry. New and innovative technology and services models are abundant and growing exponentially in the wealth management industry to better serve the high-net-worth and mass-affluent investors. It was overwhelming to me when I attended the ceremony last September compared with the lack of innovative technology and service models in the DC market.
As I wrote last week, innovation and progress in the DC industry is slow and difficult as we finally begin addressing the needs of the participants, especially the needs of the less affluent, which make up about 97% of the 110 million participants. Along with clunky record-keeping technology and onerous regulations from a multitude of federal and state entities, three groups have to agree when a new service or technology is introduced—the plan sponsor, advisor and record-keeper. I can rarely get three people to agree on anything.
But even worse, product innovation is controlled by risk managers, lawyers and lobbyists whose main interest is avoiding risk further exasperated by the recent spate of litigation. Not only are they ill-equipped to guide or foster innovation, but it’s also just not their job.
So the Wealthies are a way for the retirement and wealth management industries to learn and help each other to enable and support the brave RIAs and RPAs that want to provide better outcomes for clients while growing their practices.
I urge the DC industry to not be shy and to nominate themselves if not for the recognition they receive from the 600,000 subscribers to WealthManagement.com and the fast-growing RPA Edge, then to also recognize the hard work and dedication of their team that might just attract others to join.
At the closing of the 2021 Wealthies, Bill Crager, CEO of Envestnet, noted how far the wealth management industry had come over the past 20 years when most of the companies that had won one of the almost 300 awards did not even exist. He asked what the next 20 years would bring. I knew.
We need to bring these innovative services and technology to the masses that today only the wealthy and affluent enjoy. Granted, there need to be different models than one-on-one personalized advice, but the need is there for the over 100 million underserved DC participants. We just need to figure out how to leverage what the wealth management industry has developed and convert it to meet the needs of people at work.
Fred Barstein is founder and CEO of TRAU, TPSU and 401kTV.
