Many experts are predicting that the convergence of retirement plans and health benefits, spurred on by the ACA, high deductible health care (HDHC) plans and health savings accounts (HSAs), offers huge opportunities for plan advisors.
So why aren’t more plan advisors jumping in?
I discussed this question with a DC provider who was making a big bet on the health care/retirement convergence. Though the logic is sound and the provider’s bet will probably turn out to be as well, to understand others we have to get out of the selling mode and into a listening mode. That is very hard to do. It’s a mistake that most of the DC industry made when it declared that the focus has shifted to retirement outcomes. Did we check with the small and midsize employers to understand their needs and concerns? Or did we just start selling, bolstered by flawed industry research that always reaches the conclusions we want?
For plan advisors, especially specialists, business is really good. More plan sponsors, especially larger ones, are hiring these specialists; the final DOL fiduciary rule will only serve to accelerate that trend. And there are lots of opportunities to sell wealth management and financial planning to participants.
So if it ain’t broke, why fix it? Why risk getting into a new business like health care, spending time and resources, when things are going so well? Some entrepreneurs follow a different adage: “If it ain’t broke, break it.” Take the risk to go into new but complementary businesses when things are going well; don’t wait for a crisis. That thinking entails short-term risk, as well as more people, technology and resources. It’s hard to argue that with so much change happening, advisors should be taking on more risk.
Though pundits will probably continue to predict the convergence of benefits (myself included), it may not be right for all advisors, and this may not be the best time to take the plunge.
Opinions expressed are those of the author, and do not necessarily reflect the views of NAPA or its members.
