The most logical time for advisors to level the participant data sharing playing field is at the outset of the relationship with the plan sponsor and plan administrator.

Advisors need to be clear about the type of data they need, and for what purpose. They can clarify that they are not seeking the data for collateral sales opportunities, rather, they need data to implement appropriate financial wellness and education initiatives for the organization, as well as to assist participants with financial and retirement planning.

Advisors should also note that it is possible to allow their participants to opt out of—or, opt into—personal data sharing agreements set up by the plan sponsor for the purposes of retirement planning. The advisor’s record-keeper can customize the level of data sharing for each plan participant based on individual instructions.

Setting Up The Back Office

Of course, even before the plan fiduciaries are on board, financial advisors must work with their retirement plan record-keepers and other service providers to make sure their operations are set up to deliver information seamlessly into their systems.

For example, advisors can ask for notifications to be set up for key events or milestones, such as contribution rates, plan termination dates, asset thresholds, variance to known risk tolerances, eligibility for catch up contributions, bonus payrolls, required distributions and the like. Just because it is not being done now does not mean it cannot be done.

In fact, all of the advisor’s technology vendors should have a level of integration for retirement planning that mirrors their interconnectedness on the wealth management side of the business.  Those that lack these capabilities should be willing to build them.

In the highly competitive and technology-driven world of retirement planning, it is impossible for advisors to succeed without leveraging data from their service providers and other partners.  Advisors that are unable to pull participant data into their own systems and manage communications flow face a real threat of being put out of business.

Mark Klein is the founder and CEO of PCS Retirement, a leading provider of retirement plan solutions. He can be reached at [email protected].

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