Zoom calls and remote-offices. TikTok and Gen-Z. Cars and chip shortages.

These are just some of the new pairings we’ve become all too familiar with. But what about one that is perhaps less obvious?

Retirement and tech-forward.

While the last pair may not feel as natural rolling off the tongue, the recent findings of our survey prove it’s definitely a duo that deserves a spot alongside the others.

Over the past few years, innovative financial companies such as Robinhood and Plaid completely changed the game for the personal investing and payments industries. During that time, it’s been mostly crickets in the world of 401(k)s. But now investors agree that it’s the retirement industry’s time to shine. Big banks and private equity firms poured a whopping $250M+ into the industry over the past year alone.

This funding is long overdue for the retirement industry. The vast majority of 401(k) plans are run on outdated recordkeeping technology that was built in the ‘80s. This legacy technology leads to high costs, administrative headaches, and rigid plan designs for millions of plan sponsors. It also creates a barrier to entry for those in the small business space who don’t have the financial or administrative resources to support a quality plan. In fact, there are over 30 million small businesses in the US, yet only 600,000 401(k) plans in total.

The friction that small businesses experience along with the momentum from substantial funding is quickly leading us to a retirement revolution. Every aspect of the industry is changing and technology is at the core of it all. Advisors rely on social media to connect with prospects, employers depend on payroll integrations to keep their plans running smoothly, and participants expect the same experience with their 401(k) plan as they do with their online banking.

Advisors are feeling more and more pressure to deliver on clients’ heightened expectations. According to this year’s survey, 85% of advisors place a greater emphasis on the technology used to run their business as a result of the past year. Below, we take a look at several new ways in which the push for tech-forward solutions has manifested itself, from prospecting, to plan management, to client demands and beyond.

New technology is quickly turning the 401(k) world into a different kind of ball game, and it’s up to advisors to learn the new rules.

This trend towards favoring digital solutions may have accelerated given the past year or so, favoring a remote-first environment and limiting in-person meetings. So as these tools continue to permeate the financial services industry, it’s safe to say that if you aren’t on LinkedIn looking for leads, there’s a good chance your competitor is. In fact, when we asked advisors about their most valuable source of leads, the second most common answer was social media (referrals was first), beating out events, websites, and cold calls.

There has been a 300% increase in cybercrimes since early 2020, and 43% of those cyberattacks are on small businesses. Given that 401(k) plans are an attractive target for hackers (loads of PII and money!), it came as no surprise when the DOL finally released cybersecurity guidelines for plan fiduciaries in April of 2021.

Employers rightfully feel increased pressure to address these risks. In fact, 73% of advisors agree that their clients care more about cybersecurity following a year of uncertainty. In addition to releasing guidelines, the DOL has also begun auditing plans to test whether they were following proper security protocols. This added scrutiny means advisors are also feeling the pressure to carefully vet and select secure technology providers. According to our survey results, 30% of advisors listed cybersecurity as a top concern for the future of their practice, impressively beating out prospecting and client retention.