Staying abreast of all the issues facing plan advisors and their clients these days can seem overwhelming, especially with so much attention being paid to retirement issues by so many sectors of our society. Plan participants are concerned about not having enough to retire or outliving their savings; employers are concerned about costs and liability; and the government needs to balance its budget and wants to try to protect and inform relatively unsophisticated investors as well as expand coverage. As a result, advisors, broker dealers and the providers who supply the products and services are seeing the business changing before their eyes.
How can you keep up with what’s really important? One way is to create categories or “buckets” to keep track of and analyze issues as they arise, and then create a simple acronym to help you remember them.
In preparing a new presentation, which I do every two to three years, the idea of “Five Trends” came to mind. What are the five trends that are really important to plan advisors in the market? Can all the issues really fit into five buckets? And most importantly, is there a clever acronym so we all can remember them?
So here’s my attempt — what I call “FOOT,” which stands for “Fees, Funds, Fiduciary, Outcomes, an Opportunities/Threats.” Here are the relevant issues within each trend:
Fees
• Disclosure
• Compression
• Transparency
• Revenue Sharing
• Share Classes (Tibble)
• ETFs vs. Collectives vs. SMAs
• Commissioned vs. Fee Based
• Passive vs. Active
• Effect on Outcomes
Funds
• Asset Allocation
— TDF/Risk
— Managed Accounts
— LDI
— Glide Paths/Model Portfolios
• Capital Preservation
— Stable Value/Bonds/Money Market/Fixed Income
— Investors vs. Savers
• Monitoring and Selection
• Retirement Income (in/out of plan)
• Active vs. Passive vs. ETF
• Wrapper — GA/MF/CT/SMA/ETF
• Share Classes
Fiduciary
• New Definition
• SEC vs. DOL
• Levels
— Plan
— Participant
— Rollover
• Level Comp
• Outsourcing — 3(21) vs. 3(38) vs. 3(16)
• BDs and Provider Liability
• Future of Advice
• Future of Commissioned Broker
Outcomes
• Auto-plan
— Participation
— Deferral/Escalation
— Investments/Packaged Products
• Auto IRAs
— California
— Other States
— Federal Government
• Participant Measurement/Income Replacement Ratio
• DC Alpha
— By Plan
— By Advisor
— By Provider
• ‘DB-ization’ of DC Plans
• Role of Advisor – Value
• Retirement Income – The Power of Pooling
Opportunities/Threats
• Consolidation
— RK
— BD
— IO
— Advisor
• Commoditization
• Scale/Profitability/Fee Compression
• Government
— MEPs
— Thrift Savings Plan
• Advisor Market – ‘Blind Squirrels’ (135,000) vs. ‘Super Elite’ (1,500)
• Industry ‘Coopetition’
• Advisor as General Contractor/Doctor
• Future of Employee Education
• Engaging Plan Sponsors
• Savings/Retirement Security
• Cross Selling
— Wealth Management
— Rollovers
— Benefits
• Technology
• Health Care Advisors
• Government-owned Business – Advisor Role?
• Auto-plan
• Coverage
Did I miss anything? Do you think my “FOOT” acronym really stinks? Start a discussion in the comment box below.
