The new normal for RPAs post-pandemic
In the wake of the pandemic, RPAs will need a fully integrated technology stack to leverage the convergence of wealth, retirement and benefits at the workplace.
There’s hope that life will return to “normal” sometime in 2021, but there’s no doubt that the world has changed forever. For retirement plan advisers who eagerly embrace the “new normal,” this will create a once-in-a-generation opportunity to expand their businesses and distance themselves from the competition.
What will not change, unfortunately, is the challenge of RPA fees declining at the same time that client expectations increase, as plan sponsors wake up to the importance and realities of their defined-contribution plan.
As noted in a recent RPA Convergence column, the pandemic has increased the adoption of technology by Americans. A Harris poll showed that 73% of Americans think the use of fintech is the new normal, and a greater number of people are comfortable using mobile devices to make financial transactions, especially previously reluctant seniors.
Likewise, the pandemic accelerated the use of technology by plan sponsors and RPA firms. More than ever, RPAs will need a fully integrated technology stack to leverage the convergence of wealth, retirement and benefits at the workplace.
Obviously the adoption of remote video communication has become widely accepted and will be the default communications mode. With plan sponsors more willing than ever to interact with their service providers remotely, RPAs and their staff can be more productive handling more plans than before at a reduced cost.
Video conferencing also provides the opportunity for RPAs to expand their footprints into more remote geographic areas and perhaps allows them to focus on certain types of businesses and organizations as the pool of potential clients expands.
Likewise, RPAs can meet with more employees through remote access, offering some additional benefits, interacting with spouses and overcoming the reluctance of some plan sponsors that do not want their workers to take off time during the workday. Access to participant data will become even more critical.
Prospecting has changed during the pandemic, as most RPAs have successfully won new mandates without meeting in person. That trend will continue, but the stakes are higher. Real value, knowledge and experience has become more important than relationships and personalities, which will continue putting more importance on referrals and education than ever.
So how will things change when the most severe restrictions of the pandemic subside and more people are able to meet in person and travel?
Meeting with plan sponsors and their employees in person will continue to be important but with a hybrid approach. It will be easier to get all retirement committee members to meet if there is a remote option. Likewise, group meetings can be broadcast live to those working at home that day or in remote locations. RPAs also need to integrate the use of mobile technology to communicate with participants as part of their hybrid communication, guidance and advice plans.
With seniors able to work remotely, the workforce will continue to get older, so the new normal needs to include services like retirement income. Likewise, RPAs and their staff will be able to work longer, preserving their relationships and leveraging their wisdom — both hard to replace.
RPAs and their staff have become more comfortable working remotely, resulting in greater productivity due to reduced commuting and office costs. Most RPAs do not expect to completely give up their offices, but office layouts and locations may shift.
The layout should be geared for the work to be done, with common and flexible work areas, and offices limited to people in certain positions. Offices in urban areas that had been convenient because they were close to clients will give way to cheaper and easier-to-access suburban locations — clients are moving out of downtown offices anyway.
The cliché that change is the only constant has never been more true than in the new normal. For those that embrace the changes, the future is indeed optimistic as we all emerge from this once-in-a-lifetime crisis.
[More: The online evolution of retirement plan practices]
Fred Barstein is founder and CEO of The Retirement Advisor University and The Plan Sponsor University. He is also a contributing editor for InvestmentNews’ RPA Convergence newsletter.
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