Evolution of Recordkeepers’ Services and Interactions with Plan Participants: Navigating Technological Advancements and Financial Wellness
The role of recordkeepers in managing plan participant assets and guiding retirement planning is constantly evolving, especially with the advancements in technology and the changing needs of participants. These interactions play a crucial role in determining who ultimately manages plan participant assets and how retirement planning is conducted.
At present, participants have the option to check their account balances and manage their investments online or by calling their plan’s recordkeeper. However, larger recordkeepers are expanding their services to offer a wide range of resources to help participants manage their accounts, improve their financial health through educational materials, and plan for retirement. Some recordkeepers even provide integrated wealth management experiences by allowing participants to keep their non-plan investments on their platform.
For plan advisors, leveraging recordkeepers’ offerings can enhance their services to plan sponsors and participants, especially for smaller firms. However, there can be potential competition when the recordkeeper’s services overlap with the advisor’s business model, particularly for larger plan advisory-plus-wealth management firms.
Recordkeepers are now focusing on providing participants with financial education beyond just retirement savings. They are offering services that address participants’ overall financial well-being, including managing finances outside the retirement plan. This shift is aimed at helping participants overcome financial stress and barriers that may hinder their retirement savings.
Financial wellness and education are becoming increasingly important for employees, with many utilizing services such as coaching, webinars, workshops, and online tools provided by their employers. Recordkeepers are using various channels to meet this growing need, including call centers, live meetings, webinars, and personalized financial wellness plans.
In addition to educational services, recordkeepers are also offering financial and investment advice to participants. This includes digital advisory services, hybrid options combining digital platforms with dedicated advisors, and managed account solutions using the plan’s fund lineup. Some recordkeepers have sub-advisory relationships with financial advisory firms to provide participants with personalized advice.
Managing potential conflicts of interest in relationships with converged plan advisory and wealth management firms is crucial for recordkeepers. By establishing clear rules of engagement and collaborating with advisory firms, recordkeepers can avoid co-opetition and ensure the best outcomes for participants. This collaborative approach helps create a seamless experience for participants and enhances the overall retirement planning process.
Overall, the evolving services and interactions provided by recordkeepers play a significant role in shaping the future of retirement planning and asset management for plan participants. By staying abreast of technological advancements and meeting the changing needs of participants, recordkeepers can continue to enhance the financial well-being of participants and guide them towards a secure retirement.
