Reimagining Market Commentary

As we set out to reimagine retirement, one of Endeavor’s goals is to filter the noise and help advisors enhance their retirement practice. With that in mind, let’s take a candid look at why market commentary within retirement plan quarterly materials might not be the most useful tool to accomplish these goals. Here are four reasons why it may fall short when it comes to serving the long-term goals and needs of retirement plan management, but don’t worry, we’ve got some alternatives in mind!

First, let’s talk about timing. Market commentary often ends up feeling a bit stale by the time advisors sit down with plan sponsors. Financial markets move daily, and what may have been relevant and insightful just a few months ago might already be outdated at the time of the committee meeting. Think Silicon Valley Bank (SVB) and the relevance it has on a retirement plan’s outcome today…or in 20 years from now for that matter. Retirement plan management requires a forward-thinking approach, so relying on quarterly market commentary can distract you from focusing on items like plan design enhancements or participant outcomes.

Next up, we need to consider the long-term focus of retirement. When it comes to building a nest egg and securing financial stability for retirement, we’re talking about a journey that may span decades for some participants. Quarterly market commentary, on the other hand, tends to get caught up in the short-term volatility and performance. Trying to align long-term retirement plan objectives with short-term quarterly market commentary seems to be a bit of an oxymoron. Advisors may be better served by shifting focus to the big picture and prioritizing strategies that truly support long-term goals.

Now, here’s a harsh pro-tip: there are experts out there who specialize in providing market commentary and analysis. Instead of trying to reinvent the wheel, why not tap into their expertise? Many of these market specialists, or asset management companies, offer white-label solutions, oftentimes at no cost. By outsourcing market commentary, advisors can free up their time to focus on what they do best…plan sales, relationship management and participant education.

Last but not least, the DOL has never issued guidance requiring that an advisor focus on quarterly market commentary. So why is it done in the first place? One would assume it is because “it has always been done this way” or because market insights suit the advisor’s strength. Instead, maybe focus on fiduciary training or explaining investment basics to a committee so that they can make more informed plan and participant benefit decisions.

Some committees may value market commentary, but it is important to acknowledge the limitations in terms of timeliness and long-term relevance. In addition, by exploring alternatives from third party market specialists, advisors may be able to streamline quarterly reporting and reduce turnaround time. Remember that reimagining retirement requires that you filter out the noise and provide valuable insights and guidance for a secure and fulfilling retirement plan business.