Chris Augelli

PA: Obviously, there is a lot going on in the retirement space. Where is this market headed? What are the biggest challenges for plan advisers?

Augelli: First, from a high level, retirement readiness continues to be an evolving focus, and plan advisers need to move along with that change. In the past, plan sponsors and advisers most frequently worked together on employer-level issues—provider searches, investment reviews, pricing comparisons—the scope is now broadening to include an employee-level focus and centers around the challenge of retirement readiness.

As the work force continues to age, it’s in the best interest of plan sponsors and advisers to be focused on this important topic so they can best support the need of employees. Retirement readiness is an extensive subject that includes: the de-accumulation phase for retirees, how to manage your money in retirement, an appropriate income replacement ratio—just to name a few. Plan advisers need to make sure that they’re completely educated on the topics that comprise retirement readiness and have an employee education plan in place to support plan participants. Retirement readiness is going to be a continuing challenge and opportunity.

Second, at a micro level, one opportunity that’s being overlooked is the impact of the implementation of the Patient Protection and Affordable Care Act (ACA). Health care was formerly the single most important benefits package for key talent; retirement was widely acknowledged as second. As health care becomes homogenized, retirement plans come to the forefront as a way for employers to attract and retain their most valuable commodity: their employees. So, advisers have a great chance to get sponsors focused back on retirement and take advantage of that now.

PA: How do you assist these plan advisers and sponsors?

Augelli:At ADP, we view the plan adviser as a critical extension of our ability to service our joint clients. Their local presence, the trusted nature of their relationships and the independent guidance they can give to plan sponsors are valuable in servicing the client’s needs. So we look to see how we can best equip advisers to service our joint clients.

At the employer level, it’s about giving them access to information and tools to help better service the plans. For example, we recently launched a plan health report. This comprehensive plan review provides key information about how the plan is functioning. It gives advisers and plan sponsors potential areas of improvement for the plan and suggestions about how to address the situation and benchmark it over time.

We do the same thing now at the employee level through our Retirement Paycheck Report. It’s about giving advisers the tools to help them service the needs of their retirement plan clients. We also launched a new mobile enrollment tool that’s had a dramatic impact on increasing enrollment and deferral rates. We make these tools available to support the advisers so they can have the necessary, critical conversations with plan sponsors and make sure they convey the benefit of the plan.

You’re going to keep seeing differentiation in terms of the advisers who can best engage the employee community in this challenge of retirement readiness. The industry is doing a fair job now in terms of general awareness of some of the issues participants should think about to help guide their savings activity.

But it comes down to the retirement advisers who can give their plan sponsor or client the confidence that they can engage a multigenerational work force in meaningful ways, and get them to change their behaviors and start thinking about the deeper issues. Retirement itself is not a standalone issue. It’s part of a whole ecosystem of financial decisions that impacts every working American’s life.

At the end of the day, the plan advisers who can have those conversations, who can improve financial literacy in general, they’re going to have a huge leg up.

Fees may no longer be the loudest voice in retirement plan discussions, said panelists on the Changing the Focus panel.

The industry has undergone slow but logical change, said Chris Augelli, vice president of product marketing and business development at ADP Retirement Services. “It took time for people to understand the DC world,” Augelli said. Moving from the defined benefit (DB) to the defined contribution (DC) world was a monumental shift that has changed the industry’s focus from the employer to the employee level of retirement readiness and outcomes.

Adoption of automatic features is stronger in the larger plans, according to Augelli, and “auto” features need to be optimized at higher rates among all plan sizes. “Participants need to understand what it is they are saving for,” he said. “We are not yet talking sufficiently about outcomes, making sure participants have the information about health care costs, how to balance paying for children’s education and other goals with saving for retirement.”