Just a few short years ago, many thought the Web would lower the traditional barriers to entry in a business that has always had a notoriously high investment requirement.
Sure enough, a number of new providers did emerge – and some managed to successfully leverage the new technology to gain a competitive edge. GoldK President Brian Boyle notes, “We once said if we build it, they’ll be interested. But we have to educate them (participants and plan sponsors) in how we do things.”
Another Web realist is Chris Guarino, President of Bisys Retirement Services. “You have to build it, then they have to use it,” he cautions. Ironically, while the Internet was initially viewed as an equalizer of sorts in the space, Guarino says it may actually have accelerated the consolidation in recordkeeping. “The Internet was supposed to save money, but it required firms to spend more than ever,” he notes.
Still, at least on the surface, the investment in technology offers a growing parity in offerings between providers. All of the respondents to this year’s survey now offer online account balance lookup and balance transfers, compared with “just” 95% a year ago. That increase in capability holds up across the board, including:
- 95% offer savings calculators, versus 88% in 2001
- 93% offer investment education and online enrollment, versus 81% in each category a year earlier
- 91% offer loan modeling, compared with 81% previously
- 91% offer online deferral changes, compared with 83%
- 89% now offer online loan initiation, compared with 80%
Furthermore, roughly two-thirds now offer online withdrawal and distributions, compared with just 53% and 60%, respectively, a year ago.
Plan sponsors are faring better as well, with a growing number of online tools and capabilities. The vast majority (95%) of provider respondents now offer plan sponsors online plan summary information, but only 78% offer customized reporting capabilities compared with 79% a year ago. All in all, it appears that participants continue to gain most of the attention, despite an expanding array of plan sponsor services. For example,
- 86% now offer online vesting information, up from 77% a year ago
- 81% now support contribution transmissions, up just a bit from the 77% in 2001
- 81% offer plan demographics, up from 68%
- 66% support compliance testing compared with just 52% in last year’s survey
Roughly two-thirds now support some form of account aggregation, compared with 60% in last year’s tally.