WASHINGTON -- Later this week, Fidelity Institutional Wealth Services plans to unveil a new set of tools for its RIAs to navigate the retirement plan market -- a potentially lucrative segment that has been garnering increasing attention from advisors.

In a 2013 Fidelity survey of plan sponsors, 84% of respondents said that they rely on advisors to help guide their plans, up nine percentage points from the previous year -- yet many of the RIAs on Fidelity's platform are merely "accommodating" retirement plans, often in response to requests from established clients who run small businesses, according to Meg Kelleher, an executive vice president with Fidelity's RIA custody unit.

The Retirement Plan Growth Strategies program that Fidelity plans to roll out on Thursday includes a new set of tools and services aimed at helping advisors understand whether the retirement market would be a good fit for their firm -- and then helping them build out a business in providing advice to plan sponsors.

"It is an underserved market," Kelleher said in an interview here at Fidelity's Inside Track conference.


Advisors aren't completely ignoring the segment. In a separate Fidelity survey of RIAs, 61% said that they are advising at least one retirement plan.

Of those, however, 91% said they are only working with between one and three plans, making the retirement segment a sideline to a core wealth management practice.

Fidelity's new program will aim to encourage broader participation in the retirement market for advisors where that business line would be a sensible addition to the practice.

"I think that for the target market for this program, there's just a lack of awareness," Kelleher said. "So I don't know if I would call it confusion so much as just lack of knowledge ... They haven't seen enough of the different scenarios in which they can actually participate, and that's really the design of this program -- to really help them think through it."

With the rollout of the Retirement Plan Growth Strategies program, Fidelity's relationship managers will move toward a more consultative approach to help advisor clients determine whether and how to pursue the retirement segment.


Kelleher acknowledges that the market isn't for everyone: Advisors targeting retirement plans need special expertise and must dedicate staff and resources to build out that wing of the practice. Those that can't might do well to keep their focus on wealth management.

This summer, Fidelity plans to partially automate that self-assessment process with an online evaluation process and introduce a new modular education program. The diagnostic tool is expected to consist of 20 to 30 questions that will help advisors gauge whether to move into retirement and identify areas where they could use more education -- such as fiduciary responsibilities -- or what type of service provider to work with.

"We have some subset of all those questions that we're [currently] asking in our consultative engagement," Kelleher said. "The beauty of the diagnostic tool is that there's some science behind it, which will trigger the response back to the advisor that says either, no, this isn't the right space, or, here are the five things based on how you answered these questions that we think you should be doing. And we'll then follow up with them on that."


Fidelity isn't the only custodian with new programs focused on the retirement plan market. TD Ameritrade Institutional in January announced its own retirement plan program for advisors, with account management tools and materials for advisors, enrollment and education support for employers, as well as planning tools and IRA rollover assistance for plan participants. But Fidelity has its own expertise in the area, with its parent company commanding the largest share of the 401(k) market.

The new Fidelity rollout, set for this Thursday, focuses on advisor training and marketing, with the custodian offering interested advisors a set of tools that they can use to develop their firm's brand and zero in on the areas of the practice that differentiate them from the competition.

The company's Firm Story program -- already available for RIAs' wealth management practice -- has been updated to include a retirement-specific focus that aims to help advisors carve out a marketing and branding strategy that they can use to pitch services to plan sponsors.

"This sort of toolbox that we have around the firm story forces that advisor to really step back and think about who am I, what do I want to be and how do I tell my story," Kelleher said.

Also on Thursday, Fidelity is planning to launch an updated version of Referral-EDGE, a prospecting database for RIAs powered by a third-party vendor, which will be tailored for the retirement space. The Referral-EDGE for Retirement product will offer information about retirement plans, affluent individuals and other information that could produce qualified prospects for RIA firms ready to expand into retirement plans.

"We asked the folks who power Referral-EDGE to really dig deep into the retirement plans. And so they have an opportunity now to look at who's the record keeper, what's the investment lineup. Everything about being able to look at a plan and figuring out what is the plan doing today, with whom, and with what investments is much more rigorous and much more rich in the new version," Kelleher said. "This just kind of gives another layer of mining the information, and so we're providing that to those folks who are pretty serious about retirement."

Read more:

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access