Retirement income and what to do about it … the perennial subject that always gets advisors talking. What products are available? What products are needed? How well is the industry responding? Will reform help or hurt the retirement income equation? We put these questions and more to Kristi Mitchem, and she didn’t hold back on the work still to be done.
Mitchem is a senior managing director of State Street Global Advisors and head of global defined contribution. She’s responsible for SSgA’s global defined-contribution business, including product development, distribution, pricing, client service, operations and marketing infrastructure. Before joining SSgA, Mitchem was BlackRock’s managing director and head of the defined contribution business, responsible for delivering products for individual 401(k) investors.
Q: Are you happy with the current slate of retirement income products?
A: I still think that there’s a long way to go. I think there have been some early advances, but I think they are just that—“early advances.” There’s more that we need to do to heighten the sense of urgency around income and retirement security.
Q: What, specifically, needs to happen from an educational standpoint?
A: People are in a wait-and-see mode with income. We just conducted a client listing campaign where we go out to a large number of plan sponsors and talk to them through a structured interview about what they’re looking for. We heard loud and clear that while plan sponsors are very interested in income, very few were moving to execution stage. There was a reticence that hinged partially on the regulatory structure and fears around litigation and fiduciary liability. That’s a challenge to all of us in the investment management industry when understanding the importance of retirement income.