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Practice Management

As advisors contemplate the changing landscape of the retirement industry, the decision becomes evident: either embrace the latest trends and advancements or risk falling behind.

This Practice Management article is intended for financial advisors only (registered representatives of broker dealers or associated persons of Registered Investment Advisors).

As the retirement plan industry continues to become more complex and specialized, a stark contrast between yesterday's advisor and the twenty-first-century advisor has developed. In the past, retirement plan advisors wore multiple hats throughout the day; some would service small and mid-size 401(k) plans and then quickly switch gears to handle financial and investment planning for individual clients.

But new fee-disclosure legislation, technological innovations, and a looming retirement crisis are driving an industrywide evolution toward specialized retirement plan service and expertise. Today's retirement advisor must also navigate increased scrutiny from local, state, and national governments to address Americans' savings woes, especially as defined benefit plans continue to decline.

Thanks to the ever-changing digital era in which we live, plan sponsors and participants of the twenty-first-century are more technology savvy than ever before, thus requiring personalized service and the ability to be more actively engaged in their retirement planning. For the advisor, this means embracing twenty-first century tools such as retirement calculators, on-the-go mobile tools, and even social media.

At Ascensus, we've found that as advisors contemplate the changing landscape of the retirement industry, the decision becomes evident: either embrace the latest trends and advancements—or risk falling behind.

In speaking to our top advisor clients, we've identified five best practices of the twenty-first-century advisor:

1) Auto start—One of the best ways to increase participant retirement readiness is to make the first tough decision for them: getting started. Get them going with automatic enrollment.

2) Make it easy: do it for them—Incorporate investment options such as asset allocation models and target-date funds so participants can balance and diversify based on their personal risk profile and goals.

3) Smarter choices—Use an open-architecture platform to choose from a wide range of investment options and create best-in-class investment menus.

4) Think like a fiduciary—Although advisors aren't required by law to be fiduciaries, a twenty-first-century advisor will adopt a fiduciary mind-set on behalf of plan sponsors and their employees, and even step into a co-fiduciary role.

5) Redefine success—The 401(k) industry was once driven by participation numbers. Yet time has proven that high participation at low levels does not yield long-term success. The focus is shifting from a great participation rate to a great retirement income rate.

For advisors, twenty-first-century changes to employer-sponsored retirement plans have meant keeping up with the latest on multiple fronts—from changing smart phone technology to changing fee-disclosure rules.

Neil Smith is Executive Vice President, Strategic Business Support Services, at Ascensus. For more information, visit



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