The successful implementation of retirement income solutions hinges upon the active involvement and buy-in of both advisors and plan sponsors. Advisors serve as indispensable guides, leveraging their expertise to navigate the complexities of retirement planning and tailor solutions that align with the unique objectives of each retirement plan. Their deep understanding of plan demographics, participant needs, and regulatory requirements enables them to recommend solutions that are both effective and compliant. Without the support and guidance of advisors, plan sponsors may struggle to assess the multitude of options available and may miss out on opportunities to optimize retirement outcomes for plan participants. Advisors play a crucial role in providing clarity, direction, and reassurance throughout the implementation process, instilling confidence in the chosen solutions and empowering plan sponsors to make well-informed decisions.
In a new edition of Wealth Management RPA RealChat, Fred Barstein, CEO of TPSU and 401KTV, interviewed Jeff Elvander, CIO at FlexPass Strategies and RPAG, discussing the challenges and potential solutions surrounding in-plan retirement income. Jeff highlighted the complexity of obstacles such as delivery platforms, provider transparency, and monitoring mechanisms. He emphasized the importance of education and collaboration within the industry to address these challenges effectively. The discussion also touched on the necessity of advisor and plan sponsor buy-in for successful implementation. Jeff discussed the potential of solutions like target date funds incorporating retirement income features within a CIT framework. Fred underscored the importance of industry-wide collaboration for widespread adoption of retirement income solutions, emphasizing the need to focus on adoption before comparing product superiority.
To view the full interview, visit WealthManagement.com’s RPA RealChat with Fred Barstein and Jeff Elvander.
Read Full Transcript Here:
Fred Barstein:
Welcome to 401k Real Chat. This is Fred Barstein, contributing editor at wealthmanagement.com’s RPA Omnichannel and CEO at [inaudible 00:00:18], TPSU and 401KTV. I invite the most interesting, innovative, and impactful retirement wealth management professionals, asking them to provide open, honest, and candid answers to three important and difficult questions. So let’s get real.
Today we are speaking with Jeff Elvander, CIO at FlexPass Strategies and RPAG. He held a similar position at NFP Retirement before that. So welcome, Jeff.
Jeff Elvander:
Thank you, Fred. Nice to be here.
Fred Barstein:
So we’re looking forward to hosting you at the June RPA Retirement Income roundtable, and we’ve been hearing about in-plan retirement income for a while. What do you think have been the obstacles for having that in-plan retirement income being available to more plans and more participants?
Jeff Elvander:
Yeah, certainly a lot of buzz and talk about having an income feature. You talk about the obstacles, and I would say it’s almost a literal minefield out there because there are so many obstacles out there which have prevented advisors from getting in this space. And it is anywhere from what’s the delivery, the record-keeping platform, are they in-plan, out of plan, who’s the provider, who’s the insurance company, are they portable, what’s the transparency for these? So there’s a lot of issues there that aren’t necessarily even addressed right now within an advisor’s investment policy statement to even start having those conversations, and how will they be monitored?
So Retirement Plan Advisory, we are in the process right now. We have a matrix. We’re building out more information around all of these just in the education part of it, just to educate our advisors in terms of what are the different features, what are the different product solutions? And they vary across the board, depending on record-keeper or partner and who you’re aligned with. So that’s where we’re at right now with regards to the process and education, but I think that’s really the natural starting point. And so that’s where we’re at right now and what we’re doing for our advisors.
Fred Barstein:
You think we can ever come together and figure this out and overcome all these obstacles? It’s been a while, but we still have hope, right?
Jeff Elvander:
Yeah. So another great question. Certainly I know why you’re hosting a retirement income roundtable to get some thought leaders together to discuss this, but it goes more beyond just advisors or a certain investment manager or a certain record keeper. And I do think it does take a village to put together some of these solutions and come to together and have some offerings that address these challenges. And when I say that, it’s the investment manager partnering with a record keeper, partnering potentially with another fiduciary or a three to oversee everything. And when I say that, that’s what we’re doing on the flex path side of things, which is the RA for really the RPAG membership, and for some other firms where we brought together partners that include Empower on the recordkeeping, TIA for that annuity component, BlackRock and [inaudible 00:03:55] to design solutions where we can incorporate retirement income inside a target date fund, for instance, on that platform.
Which again, there’s recordkeeping builds that have to be done, there’s costs that have to go on in this, but I really do think that that is, that’s where you’ll start seeing this, is because of the industry coming together to address this and certainly there’s a lot of solutions out there, but I think those may be some of the most effective solutions is when you get that partnership and the investment manager coordinated with the annuity provider, coordinating with the record keeper. So a participant can log in and go, “Wow, I can get this. The optionality is there. I can get this much income or this much, and this is how I do it through the record keeper,” and everybody else is coordinated in terms of fulfilling that mission of retirement income.
Fred Barstein:
But even if you do get the record keeper and the investment and provider, the annuity provider or the 338, and in the case you’re using a CIT with Great Gray, you still got to get the advisor to push it and you got to get the plan sponsor to agree, right?
Jeff Elvander:
Correct. So that’s where education is key. And that’s also where I think what we built with Great Gray and a traditional CIT framework. Target date fund, that’s where I think originally a lot of the thinking was maybe a managed account solution would be the way to do this, because it is more of a personalized decision. How much of an annuity, how do we do this, what’s the delivery? The fact is there’s still not widely used that much in terms of the adoption rate for managed accounts. And the TDF is really the primary retirement vehicle for participants, and so some of the solutions we’re building, which is the one I mentioned for Empower Index select income is within a CIT framework, a target date fund available to most participants out there and utilized by most participants. And the QEIA. Some great things I think that are in the works right now with the industry and how we’re addressing this that are just starting. Some of these new products that I just mentioned just launched a couple of months ago with Empower [inaudible 00:06:14].
Fred Barstein:
Yeah, and that’s why we have this retirement income. It used to be the CIO Roundtable. And so much talk was about retirement income, we now have not just CIOs, but product managers from record keepers, asset broker dealers and aggregators. How can we bring them all together? Because it’s going to take all of us. It’s not like one company’s going to win. It’s we got to get adoption. And if there’s adoption, then everyone wins. And then we can get into, “Okay, whose product is better?” But we’re not at that point yet. So, yeah.
Jeff Elvander:
I think so.
Fred Barstein:
Great. Thank you, Jeff. Look forward to hosting you at the roundtable. It’s all the time we have. I’ve been talking with Jeff Elvander, CIO at Flixpath and RPAG. Thanks Jeff for joining us today, and thank you all for watching Wealth Management’s RPA [inaudible 00:07:17].
