Technology - Fixing a Broken Model

BridgePoint Group

Description

POINT of View 3. Plan Sponsors inserting themselves as control points in production processes (e.g. “I need to see it before it goes out”) thus “breaking scale” 4. An average 12,000+ fund choices per Recordkeeper – with 80 percent of the money in 200 choices or less.

Still, the Recordkeeper is required to price, track income and corporate actions, maintain fund fact sheets and information, train telephone representatives, print on statements and present all 12,000 options online. The question we need to ask ourselves is whether or not these service variables ultimately lead to better retirement outcomes for the Participant? While you can argue effectively that some of these may be important for the Sponsor’s brand image or other legitimate purposes, is the Participant truly served by ultimately paying for the lack of scale, and corresponding average service experience that results? Consider this – in a typical Defined Contribution phone center 40 percent of the calls made by Participants are calls they didn’t want to make (e.g. “I don’t understand this form, I didn’t get my check yet, I don’t understand my 50 investment choices”) and the Recordkeeper didn’t want to take. All of these services ultimately end up being paid for by the Participant. What do we do about this? First, we must obtain a collective and common view of the challenge. In subsequent articles we will expand upon this subject in an attempt to provide education and insight into a tremendous opportunity we have to help our current and future retirees. Second, we need to start talking about servicing value and hold ourselves accountable for designing services that help Participants retire while simultaneously building scale.

The goal is to eliminate those service variations that do not benefit the Participant, Sponsor, or Recordkeeper (there are more of these than you can imagine). What can Sponsors do? In order to fix this broken model, it’s important for you to engage in a productive discussion with your Recordkeeper to talk about how together you can focus on the highest value priority service items to achieve scale. Connect With Us  (855) 274-3434  connect@getBridgePoint.com  www.getBridgePoint.com _____________________________________________________________________ About BridgePoint BridgePoint is not your typical consulting firm. We take a practical, results-based approach focused on executable strategies. We specialize in helping retirement, financial services and benefits providers improve their business performance by better aligning efforts with what customers value - and are willing to pay - for services.

We are experienced business professionals who have managed all facets of retirement and benefit services, including delivering major transformation programs. We bring hands-on leadership and deep industry expertise to helping our clients overcome the common obstacles that often derail strategic initiatives. We provide the guidance needed to accelerate execution and deliver results. connect@getBridgePoint.com  (855) 274-3434  www.getBridgePoint.com ©BridgePoint Group.

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