What’s Hot and What’s Not at the NAPA 401K Summit
The NAPA 401K Summit, held in Las Vegas March 19th – 21st, was a smorgasbord of Plan Advisor and Defined Contribution industry presentations. While I found some topics to be of value, what was ironically missing was a substantive conversation about how to measure and deliver Plan Health and successful participant outcomes. After all, isn’t this the raison d’être for our industry?
What was missing?
The closest I came to encountering a dialogue about measuring Plan Health and participant outcomes was when one person spoke about measuring deferral rates over time in the “Bench ‘Pressed’: Effective Plan Benchmarking” session. It’s a start – but what about tools that measure retirement readiness? Or true benchmarking? What about turning a discussion about plan participant retirement needs into a compelling and dynamic presentation with actionable information?
In my mind, what the industry thinks sponsors are looking for is not hitting the target. Research shows that plan sponsors are much more worried about the day-to-day operations: things like not getting sued, the investment lineup (related to not getting sued), fees in general, and DOL/compliance-driven plan reporting deadlines. Participant outcomes – the reason for having a 401(k) to begin with – lag far behind as a top priority for plan sponsors! It is time for advisors and recordkeepers to take the lead and promote Plan Health and participant outcomes to sponsors.
While advisors do use some benchmarking to bolster their value proposition to plan sponsors, most of the benchmarking out there is around investment and plan service fees, and does little to measure plan health or participant outcomes. This emphasis on fees is reflective of what plan advisors are most concerned about, but what do sponsors and participants actually care about? I would contend they care most about whether their participants have enough of an income stream to retire and if important milestones are being met towards this goal.
Aside from what was missing; what were some of the valuable take-aways? In terms of Washington and a post-fiduciary world, it appears that most advisors and firms are adapting to a best-interest approach regardless of what the Trump administration may do in the end. This does not mean that firms won’t happily jettison the BIC; but regardless of the regulatory outcome, plan providers are streamlining product to remove perceived conflicts – that trend is here to stay.
One of the most encouraging sessions was the economic update (Investments – Under the Macro “Scope”) where representatives from TIAA Investments and Fidelity gave a clear-headed and optimistic view of the American economy. Bottom-line: they believe that the economy is doing well, and will only do better in the coming year or two.
Finally, in the session “The Ultimate Customer Experience,” Scott McKain delivered a very inspiring and practical talk about the five steps to distinguish yourself in the marketplace and delight your customers.
There were many other interesting topics, but because space is limited, we won’t go into detail about many of the other valuable sessions.
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