When we named the new InvestmentNews website focused on the defined-contribution market RPA Convergence, I’m not sure we knew exactly what convergence was or why it is so important. I have come to realize that convergence can enable the vast majority of employees who have limited wealth and little access to personalized advice to use their workplace platforms to transform their thinking and situations, leading to the transcendence — or at least improvement of — their financial and health issues. And it can help RPAs elevate their practices to the next level.
There is power in combining two things, just as working with another person brings new ideas and solutions. When three things like wealth, retirement and benefits are combined, the ideas and solutions expand exponentially. The power of three, or the trilogy, is a well-known concept in life, science and religion.
Before delving into the power of convergence at the workplace through 401(k) and 403(b) plans, let’s look at other examples.
I personally am exploring the convergence of mind, matter and spirit through yoga and meditation. Recently I have been thinking about the convergence of my work and spiritual life, and how each adds to the other.
Though some believe the present is all that exists, understanding the interplay of the past, present and future is healthy. We can learn from the past and make beneficial changes. We can plan for the future, but it is essential to be able to live in the now, experiencing the present, moment by moment, to see reality.
The problem people have in saving for retirement is that we think of our future selves as strangers. Why give up immediate gratification? This is why we must bring the future into the present for participants, learning lessons from the past.
DC plans bring together the distinct and sometimes divergent interests of three parties: the company, the participants and the retirement plan.
Though DC plans are more complicated in many ways than wealth management or financial planning, they can also yield much greater results and affect many more people.
Convergence at the workplace is a powerful way to deliver benefits at reduced costs. It is also a way to help people save for retirement through payroll-deducted, tax-efficient plans. People are 15 times more likely to save at the workplace than on their own.
Wellness, both physical and financial, is the convergence of helping people to be better savers, spenders and benefits users. Rather than the terms “financial wellness” or “retirement,” I prefer “financial freedom,” which is the ultimate goal.
How do we get there?
First, there needs to be a convergence of providers, starting with record keepers, consultants or advisers, and the plan sponsor, to provide retirement and benefits plans along with other financial tools like emergency savings.
Science progresses only when people can think and explore without limitations imposed by politics, denial or embedded ignorance. That is aided by the communication of new ideas and the deployment of new technology.
The same is true for wellness.
We need to overcome conflicts of interest, inherent biases and special-interest lobbyists to uncover new truths. Research must be more academic, as seen with discoveries like the power of automatic enrollment. Technology like mobile apps and fintech will be imperative. And communications need to be transparent. That is why the convergence of InvestmentNews, which is known for its journalistic integrity, and The Retirement Advisor University, with its singular focus on the adviser-sold DC market, is an ideal partnership.
This convergence might seem theoretical, especially to retirement plan advisers trying to survive and grow, record keepers dealing with thin margins and employees coping with economic upheaval. But we make little progress if we focus just on retirement and the “Triple Fs,” or fees, funds and fiduciary.
RPAs should be transforming their practices to focus on the convergence of retirement, wealth and benefits, even if they are just starting to have the conversation with clients or rethinking their businesses.
As Oscar Wilde once wrote, “We are all in the gutter, but some of us are looking at the stars.”