10 Resolutions for the Retirement Industry
9. We'll think of the "power users."
There are plenty of folks who abandon their workplace 401(k) for an IRA because don't like the investment options.
It wasn't so long ago that 30 or more investment options might be available within a plan, but today that number has dwindled to a handful.
The logic behind the shrinkage wasn't malicious or to force folks into cookie-cutter portfolios. A very real concern was that too many options would confuse the average employee, leading to a sort of paralysis by over-analysis. Unfortunately, we may have veered too far in the other direction, limiting investors and guiding most into target date funds.
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We wouldn't want to see a return to the wild west, but might plan sponsors and the firms they contract with find some way to offer some additional options for those experienced, well-versed folks one might refer to as "power users"?
In any event, we'd hope companies look out for their employees and demand greater variety and transparency in the year ahead. Participants deserve the ability to keep fees reasonable. We are well aware that doing so might seem "dangerous," but would it really be so bad to offer better options for alternative assets, especially when some have been among the only consistent bright spots for investors in recent months?
10. We'll listen even more to customers, in more ways.
The financial services industry took a hit to its reputation during the recession, and it will take more time to regain fully the trust of angry clients.
The truth is, many advisers did well for their clients, but a loss is still a loss, and anger is still out there.
To help themselves, anyone who works with investors needs to resolve a more open approach with clients in the year ahead. Be more easily available, experiment with instant messaging and webcam chats, be even more willing to meet whenever and wherever a client needs you.
Our hope is that the extra effort put into even better client relations will be worth it in the long run.
-- Written by Joe Mont in Boston.
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