Francois Gadenne, executive director of the Retirement Income Industry Association (RIIA), kicked off the organization’s spring conference in Chicago on Monday with a look back at the organization's five-year history, highlighting changes and outlining its goals for the near future.
“The trade group was set up to function much like Switzerland,” Gadenne said during his opening keynote presentation. “There was to be no pre-determined outcomes and we were to be completely agnostic in the information we provide.”
Referring to a 2006 whitepaper that was the genesis for the organization’s founding, he noted the focus was on effective market segmentation and delivery channels. High-net-worth, affluent and mass market clients were all examined from the perspective of the manufacturer, intermediary and distributor, but as time wore on, the organization realized it was lacking an important voice—the customer. Adding overfunding, constrained or underfunding elements to the focus (with client input) helped round out the organizations core mission.
“Our goal now is not to expose clients to the upside, but to first build a solid floor using reasonable expectations,” Gadenne said. “If we have anything left over we can talk about exposure to the upside, but not at the expense of additional downside risk.”
He then outlined the key questions and challenges the organization, and the industry as a whole, must address moving forward. They include:
- What are the new building blocks and who are the new component suppliers?
- What are the winning retirement products and processes and who is providing them?
- What are the key retirement distribution channels and who are the emerging leaders?
“It is in this third question that the game is really being played,” Gadenne said. “But ultimately those with the right tools will succeed. Accumulation tools are as different from de-accumulation tools as plumbing tools are from electrical tools.”
The companies that find success will be those that understand the business model implications of “payments (writing a check each month) vs. collections (simply collecting assets).” They will do this by conducting several small experiments with a range of possibilities to construct the income floor. Those that answer the needs of specific client segments by promoting the proper combinations of products and processes will do particularly well.
Gadenne also unveiled the first issue of the Retirement Management Journal, a peer reviewed publication with both practitioner and academic versions. A cash award of $5,000 for the top submission will be awarded later in the day Monday.