Background: The DCIIA RRC partnered with TRAU on a recordkeeper study involving interviews with 18 defined contribution (DC) recordkeeping senior executives. The goal was to explore the key threats and opportunities facing the DC recordkeeping industry and their individual firms. These findings were then discussed with industry leaders at the TRAU Roundtable in Washington, DC, in early June. This is the second Research Minute in this two-part series, focusing on the “Golden Rule” and technology.

Findings: The recordkeepers often point to what they call the “Golden Rule,” the ideal of growing the number of plans that they service without increasing staff, which is made possible in part through new technologies.

Plan sponsors, regardless of plan size, expect higher levels of service quality through innovation and efficiency. Innovations cited at the Roundtable include automation, simplification, financial wellness programs, and emergency savings accounts.

Technologies, such as artificial intelligence (AI) and machine learning, were frequently mentioned as primary tools to address staffing challenges while delivering improved service. Yet, a major challenge remains in how to integrate these new technologies into legacy recordkeeping systems, a process that is more costly and complex in comparison to implementation within newer start-ups.

Bottom Line: As discussed in both our recordkeeper interviews and at the TRAU roundtable, the ability to modernize legacy infrastructure will be critical to meeting plan sponsor expectations. The DCIIA RRC will continue to follow and report on developments in the recordkeeping space.

Read more in Wealth Management.