Workplace Retirement Voice: Adding the Two “P”S to the Three “F”S

The advisor of the future needs to embrace a new value proposition, according to John Kutz, Head of Workplace Retirement Distribution at Franklin Templeton. This means moving beyond the “three F’s” and taking a more holistic approach to changing client needs.

The needs of clients are changing, and that means the advisor of the future needs to think differently, too. The value proposition needs to look beyond the “three Fs” of funds, fees and fiduciary, toward more customized plan designs and client engagement.

Plan advisors still need to focus on the historical table stakes:

  • Funds – Provide the appropriate investment lineup for the plan and its participants
  • Fees – Drive costs to be reasonable/low.
  • Fiduciary – Ensure that the investments are being reviewed regularly and make changes when necessary.

Today, it’s that and more. Advisors who focus on these additional two “P”s deliver more value to the plan and participants:

  • Plan Design – Plan design to maximize participant outcomes and income replacement (auto-enrollment, auto-escalation, stretch match).
  • Participant Engagement – Participant engagement to help with holistic needs (financial planning, budgeting, emergency savings).

This may mean advisors utilize technology and/or outsource some tasks to bring a higher level of service to a larger number of participants. You could think of the advisor of the future as an orchestra conductor—understanding the goals of the plan sponsor (the composer)—and guiding all of the providers (musicians). All work in harmony to create beautiful music for the audience—in our case, a highly successful plan measured by participant outcomes.

To bring this to life, our workplace retirement specialists recently had an exchange on the “new value proposition” which included Kevin Murphy, Head of Workplace Sales, John Kelley, National Retirement Plan Consultant, and Matthew Beaulieu, Senior Retirement Plan Strategist. The following are highlights.