‘No Question’ Wealth and Retirement Are Converging: Bill Crager

Financial advisors are increasingly being called upon by their clients to provide service across a broader range of topics, and according to Envestnet CEO Bill Crager, there’s a particular demand for support on all things retirement.

Crager and his team wrapped up their 2023 Elevate conference late last week in Denver, and among the many product enhancements and partnerships revealed by the firm was a new integration with Empower.

During the conference’s opening keynote address and in a subsequent interview with ThinkAdvisor, Crager took time to highlight the importance of the collaboration with Empower, which stands among the U.S.’s largest retirement plan service providers.

According to Crager and other leaders, the partnership will see Empower integrate its administration technologies and asset management capabilities within the Envestnet ecosystem. The ensuing partnership will expand both firms’ distribution opportunities, Crager said, while also providing a powerful solution for wealth managers who have traditionally shied away from serving plan sponsors and participants.

As recounted in the Q&A interview below, Crager sees the retirement marketplace as an important domain of growth and competition for wealth managers, and this helps to explain the collaboration with Empower. However, he emphasized, “retirement” will continue to mean very different things for different clients, and that fact will require advisors to be responsive and embrace new technology solutions.

For business owners, “retirement” may be more about efficiently starting and operating a defined contribution retirement plan while also planning for their own eventual transition away from company ownership. For wealthy late-career professionals, tax efficient investing and income planning is an essential “retirement” topic, as are estate planning preparations and the pursuit of charitable giving.

Finally, mass affluent and middle-income Americans have their own “retirement” needs that tend to involve goal-setting, budgeting and other shorter-term financial wellness matters.

Ultimately, with a smart client service approach and an embrace of emerging technology solutions, advisors can position themselves to compete effectively across all these areas, Crager said, and this will become an essential part of doing business as well-equipped and forward thinking firms seek to break down some of the traditional barriers that have existed between retirement and wealth.

As Crager put it, the topic of retirement is about as good a lens as any to understand the pressures and opportunities facing advisor professional in the years ahead.

THINKADVISOR: There are a lot of firms and executive leaders in the advisor marketplace today talking about a “convergence” of wealth management and retirement planning. Do you subscribe to that outlook?

Bill Crager: Yes, I really do, and that’s one of the reasons why I’m excited about the Empower partnership and why I emphasized it during my opening presentation here at the Elevate conference. I think that’s one of the most exciting partnership announcements we are sharing this week.

If we think about our advisor-clients, we know that many of their own best clients on the wealth management side are those small- and medium-sized business owners. We also know that many attractive potential wealth clients in the high-net-worth and ultra-high net worth market tend to be entrepreneurs.

What does that mean? It means they have their own employees, and in today’s environment, they need to offer decent retirement plans to keep these employees loyal and happy. So, from our perspective as a service provider to financial advisors, it just makes sense for us to work to offer a more turnkey approach to serving workplace retirement plans.

The blend of our proprietary technologies with Empower’s capabilities will help advisors to service new and existing retirement plans with much less of an administrative burden.

I see this as an essential service offering, and I think it’s fair to say that Ed Murphy and his leadership team at Empower see things the same way.

Beyond making their business-owner clients happy, do you think some wealth advisors today continue to underestimate the opportunities that can come along with serving retirement plan participants?

Yes, I think that’s right, too. Part of the reason why it’s important for today’s advisors to be able to serve retirement plan participants is that this is a pathway to create relationships with the future mass affluent.