RPAs need a new name to reach the next level

At a recent Vestwell webinar, I had the privilege of sharing the stage with elite retirement plan adviser Jeanne Fisher, who used a term to describe herself that I thought was not only brilliant, but important, if RPAs are to evolve.

Naming our roles matters. Gertrude Stein’s famous quote, “A rose is a rose is a rose,” underscores the importance of naming things. Simply using the name of a thing evokes the imagery and emotions associated with it, and that's especially important when describing what we do for clients, partners and colleagues. One of the first questions we ask strangers is, “What do you do?”

In the adviser world, I made the term "blind squirrel" famous, adapted from the idiom, “Even a blind squirrel finds a nut once in a while.” That was meant to be a bit humorous, but it was also intended to underscore the difference between the financial advisers who focus on defined-contribution plans and those that dabble.

While “retirement plan adviser” has been a good description of those who serve ERISA retirement plans, it's actually quite limiting to focus on the plan, rather than the participant. It's important get the Triple F’s (fees, fund and fiduciary) services right, along with compliance and plan design, but these have become table stakes. Most have been commoditized, either taken over by technology or expected to be, allowing humans to perform higher level tasks that require greater intelligence, emotion and compassion. Technology cannot replicate that — at least for now.

When describing what she does for her clients, Fisher, a managing director at Strategic Retirement Partners, used the term “financial benefits adviser.” Rather than offer financial wellness — which can mean different things to each person — she has specific tools and services, like student loan debt repayment plans, emergency savings and health savings accounts, to help employees manage their debt and assets, while wisely choosing the worksite benefits.

By calling themselves RPAs, those advisers are limiting the scope of their services to helping employers offer a retirement plan.

DC plans have evolved not just as a replacement for pension plans but also as a platform and means to communicate with and help employees with all their financial issues. Robo-advisers emerged because most people can't afford traditional financial advice or, put more bluntly, they don't have enough money to interest most financial advisers.

The worksite is the perfect place to help the 99% of people who are ignored by traditional financial advisers. Not only is there greater access, trust, data and fiduciary protection, the worksite offers employees the opportunity to get better pricing, such as institutional versions of annuities. It's where they spend the most time and have their largest asset pool, which includes their paycheck and their retirement plan.

All of that makes financial benefits advisers, or FBAs, the key advisers for business owners and managers who find themselves in a war for talent, with benefits as a key weapon.

As I wrote recently, the most effective financial wellness program is to help workers wisely choose their benefits based on the limited dollars they have to spend. FBAs not only have to understand an employee’s overall family financial situation but also all benefits offered at work. In turn they can help employers understand what benefits they should offer.

“I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail,” psychologist Abraham Maslow wrote.

It’s time for RPAs to expand their tool chest and become financial benefit advisers. Thanks, Jeanne.

[More: Who will win the 401(k) battle in the 2020s?]

Fred Barstein is founder and CEO of The Retirement Advisor University and The Plan Sponsor University. He is also a contributing editor for InvestmentNews’​ RPA Convergence newsletter.