With his recent move from Morningstar to PGIM/Prudential, David Blanchett has continued to hone his expertise in the retirement arena. His new position as managing director and head of retirement research at PGIM DC Solutions offers Blanchett a closer look at the defined contribution universe, especially as PGIM is the $1.5 trillion global investment management business of Prudential Financial.
Via email, we asked Blanchett our VIP series questions that touched not only on his professional knowledge but what he does off the clock.
1. What market indicator, industry statistic, regulatory change or advisor trend are you watching most closely right now and why?
David Blanchett: The one thing I’m probably most interested in is the increased focus from defined contribution (DC)/401(k) plan sponsors on providing in-plan solutions for participants during retirement.
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That has pretty significant implications on the entire financial advice industry, because it suggests a pivot towards DC plans being a “through” retirement option versus a “to” option (which is how they’ve been used/viewed historically).
2. How has it been changing recently (2021) and how do you expect it to change (2022)?
The pace of change has been increasing, not only in terms of regulatory but also general interest among plan sponsors in ensuring their employees/participants can enjoy a successful retirement.
Large DC plans have tremendous economies of scale and have the potential to offer high quality solutions at a relatively low cost.
3. What would you suggest advisors do now or consider doing in the future about it?
Well, some advisors are already getting in on the game by focusing on helping participants inside a DC plan, versus focusing entirely on rolling over assets.
The trend does have implications for things like compensation, for example, since under an AUM model you have to effectively be managing the assets while other fee approaches (e.g., hourly, retainer, etc.) can still work even if the assets are on a different platform (e.g., in the 401k).
4. Who or what critical source of information do you track, or follow online, to keep up with this or other trends?
I wouldn’t say it’s a single source, rather it’s all the different surveys/studies in the industry across different organizations and companies. The trend is definitely there, and it looks like it’s accelerating.