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David Blanchett: More Retirees Are Shunning Rollovers

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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.

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.

More on this topic

5. Are you changing any of your work habits at this stage of the pandemic? Why/why not?

I started a new job like five months ago … so I’d say quite a bit has changed since the pandemic!  I’ve been remote now for over a decade, though, so being remote isn’t exactly a new thing for me.

6. What’s your biggest hobby and what was the last event/activity you did related to it?

I enjoy running, but I’m not all that fast. I wanted to try and mix things up so I actually ran my first trail half marathon last weekend (the actual race was only 10 miles, though, so go figure!). I fell during the race and banged up my knee. I’m still not running and hopefully the knee heals up soon, and if so I definitely plan on running more trail runs/races in the future!

7. How about your latest community/charitable activity/event/cause?

I would say I’m mostly involved with my church in various activities, but with work, a working spouse and four young kids (age 2, 4, 6, and 9), things are a bit chaotic these days at Casa Blanchett!

8. What book are you reading now and why?

Antifragile by Nassim Taleb. He’s one of my favorite authors and I love the general message that by trying to make things too safe we can actually make them more dangerous.

9. Any special holiday plan, activity or focus you’d like to share as we near year-end? Or a New Year’s resolution that you’ve decided on?

I don’t usually do New Year’s resolutions … I figure if I need to change something I shouldn’t wait until the new year!  I haven’t really been in the office at all since I started at PGIM/Prudential, so I am looking forward to meeting everyone in person when the offices open up in 2022.

10. Any other personal update or piece of advice or wisdom you’d like to share with our advisor audience? 

I’m a big fan of education and think advisors need to continually get their learn on. You can get a lot of that from actively following trade publications (like ThinkAdvisor!) or through more structured designations (like The American College), but wherever/whatever it is … never stop growing!