Empower Retirement, one of the largest providers of defined contribution plans, is trying to court retirement plan advisers with a new plan diagnostic tool that's free for advisers, whether or not they use Empower as a record keeper.
The launch comes at a time when 401(k) providers are continually trying to one-up each other with so-called "value-add" services to compete for advisers' attention.
The tool, PlanVisualizer, allows advisers to upload 401(k) participant data, such as age, salary, plan balance and contribution rate, and model in real time how changes to plan features such as the employer match, automatic enrollment and auto escalation affect the retirement readiness of participants, both as a whole and among different age groups.
In addition, the service projects the impact on a company's bottom line, so employers can preview the overall cost to their organization of making plan alterations.
David Hinderstein, president of advisory firm Strategic Retirement Group Inc., who has demo'd the service, believes the latter is the most compelling feature. Advisers can identify changes that will keep costs neutral for the employer but also improve participants' retirement readiness.
"Having a tool like this is incredibly important," said Mr. Hinderstein, whose name was provided by Empower. "This tool allows you to really amp it up, and I don't see anyone else that is offering [a similar service] to their advisers at no cost."
The capability to model out the impact of plan design changes isn't new — many advisers and consultants can do that now — but being able to do so in real time is substantial, said Matt Cosgriff, a retirement plan adviser at BerganKDV Wealth Management who has tried the service.
"It's certainly not the only thing out there," he said of Empower's tool. "It seems like every record keeper and fund manager has their own tool."
But he does think Empower's offering is unique.
"I think there's a ton of value in the tool," he said. "It's not like they completely reinvented the wheel, but they dressed it up a little bit so it's more powerful."
Empower, which provides record-keeping services for roughly $530 billion in retirement plan assets and more than 8 million participants, sees the service as a way for advisers to prospect new clients or beef up existing relationships.