Retirement Industry Facing ‘Greatest Transition Since the Depression’



The retirement plan industry is in transition on multiple fronts. At this year’s SPARK National Conference on Nov. 4, industry experts recently offered their take on meeting the challenges posed by today’s changes.

In the opening session of the conference in Palm Beach, FL, Philip Chao, Principal and CIO of Chao & Co., Ltd.; Dick Darian, CEO of Wise Rhino Group; and Peter Preovolos, President and CEO of Penchecks, shared their insights.

“Our industry is in the greatest transition since the Depression,” said Preovolos. Demographic changes, regulations, the technological revolution, the lingering effects of the Great Recession and the current political debates all spell tumult, the effect of which Preovolos likened to “the aftermath of a tornado.” Said Preovolos, “Everyone is in search mode for a path to survival and security.”

“What the CFO really cares about is financials,” said Darian, explaining that in his view, CFOs care about individuals getting to retirement readiness from a financial perspective.

Larger firms are bidding fees lower, plan sponsors view services in a more commoditized way and increased engagement with participants are among the current trends Preovolos identified. And vacating the fiduciary rule “allowed us to get in each others’ faces” to a greater degree, Chao added.

Recordkeepers and broker-dealers are going through changes, Darian said, but the current trends are “toughest for asset managers.” There is “massive change,” he said, changes in the way you view the world, changes in technology, and decisions regarding how to better distribute information and whether to acquire recordkeepers. And, Darian cautioned, patience is key. “The things you have to do are probably not going to bear fruit for another three years,” he said.

Size matters, Darian told attendees. Acquisitions and changes regarding aggregators “are happening quickly,” he said, and are technology-driven. “We all know that data’s an issue,” he said.

“We are in a place of unstable equilibrium,” summed up Chao.

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