In the Sea of Sameness

In the sea of sameness set yourself apart and say something different. In an industry full of copycat products and similar solutions (albeit with different color schemes and logos affixed to the top of the proposals and marketing materials) consider offering something uncommon….. real value.

We are open architecture, have a robust website with tools and calculators, offer the best Target Date Funds, a “fiduciary warranty” (of some sort), and provide targeted participant communications to improve engagement. All at a “reasonable” price. Sound familiar?

Ask yourself the all-important question, “So what?” What does this actually mean for plan sponsors as well as participants?

  • Does the plan sponsor, investment committee, or possibly that lucky individual identified by name within the plan document remain the trustee bearing all of the responsibility and liability? Yes.
  • Have the aforementioned features and benefits translated into greater numbers of participants being on track for a funded retirement? No.

The reality is that for most participants retirement readiness has not significantly improved. Depending upon which survey you look at, roughly 25% to 43% of participants are on track for a funded retirement. A very low F if we were to give it a grade. Things aren’t much better for plan sponsors after a year in which large lawsuits related to qualified plans dominated the headlines. Sponsors are becoming increasingly aware of their responsibilities and liabilities. A 2016 Cerulli Associates Plan Sponsor Survey reported that nearly 25% of Plan Sponsors of plans with assets less than $100M describing themselves as “very concerned.” For all of the hype, is the industry solving problems for sponsors and participants? Sadly no.

What if someone were to ask your best prospect, or worse yet, your best client, “If you did not have to be the trustee for your plan would you be?” Chances are, they will answer ‘no.’ That’s where we come in. Unified Trust serves as the discretionary corporate trustee named in the plan document for every plan that we serve. At a time when most in the industry have spent an enormous amount of time and money to avoid being “cast under the fiduciary net”, being a fiduciary has always been the cornerstone of our business. At Unified Trust, loyalty and the duty to operate at a prudent expert standard of care is a legal responsibility and one we take very seriously.

How do you truly show value? At Unified Trust, we believe the true measure of plan success is the number of its participants that are on track to achieve success in retirement. But the reality is that most retirement plans are a one size fits all solution.   Could you imagine if the one question a doctor asked you was, “How old are you?” With this singular data point in hand they then prescribed medication for high blood pressure and cholesterol. My guess is you may seek a second opinion. While most would agree that Target Date Funds were an improvement over participants doing the heavy lifting, they still represent a generic solution.

A customized approach tailored to a participant’s specific circumstances, goals, risk tolerance, and time horizon would obviously be a more thoughtful and as you could imagine, effective approach. It appears as though sponsors are beginning to agree as the inclusion of a managed account option within qualified plans has doubled since 2009. Yet the adoption rate by participants remains in the single digits. Why? Inertia. What if you can make inertia work for participants instead of against them? The UnifiedPlan® Managed Account Solution does just that, defaulting participants into the answer, thus turning a potential detrimental behavior into a positive one. The numbers say it all. Our managed account has an adoption rate of 84%, which is 10 to 12 times the industry average. Most importantly, nearly 70% of UnifiedPlan participants are on track to achieve a successful retirement outcome.

So to answer the initial question of “So What?” the “So What” is this, partnering with Unified Trust affords you the opportunity to offer the win-win-win scenario. It’s good for your practice, it’s good for the sponsor, and it’s good for participants. Let us throw you a lifeline and pull you out of the sea of sameness. Give us a call today. You can reach us at 866-680-7000.

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