Please, Mr. Postman, is there a letter in your bag for me?

The Marvelettes didn’t get an answer to that question, posed in the chorus of their 1961 Motown hit Please, Mr. Postman, but the Department of Labor sure did.

Financial advisors, trade groups, consumer advocates and individual Americans submitted more than 40,000 comment letters to the DOL about recently proposed regulations that would, among other significant effects, expand access to private assets and other alternative investments within workplace retirement plans. The deadline for comments came and went Monday, by which time a veritable mountain of material had been sent to the agency. The comments show views on the proposal are complicated and decidedly mixed, including within the financial services industry itself. To what extent the DOL will respond to the commentary as it prepares a final version of the regulations remains to be seen, but advisors will do well to study up on the proposals.

Divided Opinions

Critics include the likes of Christine Benz, director of personal finance and retirement planning for Morningstar, who characterized the proposal as a solution in search of a problem. The firm’s formal comment further questions the broader implications for the investment selection process by retirement plan fiduciaries. The safe harbor it would create, Morningstar argues, will allow fiduciaries to rely on potentially conflicted guidance from parties with “the strongest commercial interest” in 401(k) plan investment selections. If enacted as proposed, the rule’s safe harbor framework would insulate plan fiduciaries from litigation based on the selection of investments, alternatives or otherwise, as long as they consider and are satisfied with six factors:

• Performance
• Fees
• Liquidity
• Valuation
• Benchmarking
• Complexity

Many individual public comments highlighted the complex risk profiles and opaque fee structures that come with some alternative asset classes, calling them inappropriate for workplace retirement accounts owned by everyday investors.

Supporters include the Investment Company Institute and the American Securities Association. These groups say the proposal would democratize access to potentially lucrative investment opportunities that are commonly used by institutional investors, while tamping down on cookie-cutter class action lawsuits that have plagued retirement plan sponsors for decades. The latter claim stems from the very same safe harbor framework criticized by other commenters.

Supporters also point to the likelihood that alternatives will most likely be folded into professionally managed investment options, including target-date funds, rather than offered as standalone funds that could be misused by novice investors.

Who Said Bailout? The most skeptical takes, like the one shared by the consumer protection organization Americans for Financial Reforms, paint the proposal as a would-be bailout for struggling private equity firms. “The proposal unleashes private equity’s high-fee, opaque and risky investment model on workers’ retirement savings,” the group wrote. “Driving workers into the arms of private equity firms and crypto insiders would let the president’s Wall Street and crypto cronies pocket billions at the expense of families’ retirement security.”

Love may make the world go round, but it’s not enough to make the most of your clients’ 401(k) contributions.

Roughly one in five couples leave employer matching money on the table by not coordinating their contributions to employer-sponsored retirement plans, according to a new study from the Center for Retirement Research. On average, those couples could receive an average of $757 more per year just by moving some savings from the account with the less generous dollar-for-dollar match to the more beneficial one. The researchers looked at regulatory filings and employees’ tax returns and W-2s to analyze roughly 185,000 couples and found that a lack of coordination can cut retirement wealth at age 65 by an average of about $14,000 for all married couples. (That’s nearly enough to cover a full year of health care costs for a couple in retirement.)

“Retirement feels more personal and individualized than, say, a joint credit card bill might,” said Georgia Lord, a financial planner at Corbett Road Wealth Management. “However, what your spouse contributes affects your joint future equally as much as what you do, and optimizing your household finances requires seeing the whole picture.”

Better Together

For many, the lack of coordination may be an accident. An accompanying survey by the CRR asked respondents hypothetical questions about 401(k) planning and found that nearly half who chose not to maximize a match benefit didn’t realize they’d done so. More than a third of respondents where both spouses have a retirement plan hadn’t considered that coordination could mean more money.

For others, it’s deliberate:

• Forty-five percent of respondents who picked an allocation that didn’t take advantage of the maximum match said they knew they were doing so. The study suggests the strength of a couples’ marital commitment could play a role, since couples who ended up getting divorced were more likely to have foregone a match.
• Misunderstandings around what happens to your money after divorce also seem to be a factor. Respondents to the survey who were (mistakenly) under the impression you keep all of your own retirement savings in a divorce were more likely to deliberately pass up maximizing a higher match in a partner’s account.

The Fix. Lord said she advises clients to treat retirement as a standing agenda item in their financial conversations at minimum once a year, and any time there is a significant change for either partner, such as a new job, move or addition to the family. “The goal is to make coordination a habit rather than a one-off conversation,” she said.

The Certified Financial Planner certification remains the most widely recognized and largest accreditation for financial planners, with just shy of 110,000 professionals now holding the designation and a record 4,391candidates having sat for the most recent exam. Earning the CFP has traditionally been seen as a capstone achievement, one that gives advisors critical knowledge about taxes, estate planning, retirement, investments and insurance. That remains true, advisors say, but some now feel holding the CFP marks alone isn’t enough, especially when it comes to advising clients on drawing down savings during retirement. As a result, more advisors are pursuing targeted credentials to complement their capabilities, and marketability.

“The future of the profession isn’t fewer specialists,” CFP Board CEO K. Dane Snowden told Advisor Upside. It’s more.

Let’s Get Specific

While there are hundreds of designations in the field today, advisors seem to be coalescing around a select group of both newly developed and longstanding credentials. Two brought up consistently in informal surveys of Financial Planning Association members and Dynasty Financial Partners-affiliated advisors were the Tax Planning Certified Professional and the Retirement Income Certified Professional designations offered by the American College of Financial Services. The former was launched just last year but has since become the fastest-growing certification in the college’s nearly 100-year history. The Chartered Retirement Planning Counselor accreditation also came up frequently, as did the Enrolled Agent designation from the IRS.

“The CFP does a great job of providing general financial planning training,” said Dwight Dettloff, founder of Winding Trail Financial Planning. “But the RICP goes into specific areas that are most relevant to retirees, including Social Security, cash flow, taxes and investments.” Others agreed, noting both clients and advisors spend years focused on accumulation and “climbing the mountain.” However, coming down the mountain requires a different skillset and mindset.

When it comes to claiming Social Security, a number of advisors reported obtaining the Registered Social Security Analyst designation, and some like Antonio Lugo, advisor at Smart Wealth Strategies, have complemented the RSSA by becoming certified with the Centers for Medicare & Medicaid Services. “The landscape around taxes, Medicare, extended care and retirement account regulations evolves constantly,” Lugo said. “Staying current is essential.”

Two Birds, One Stone. Some advisors, including Maggie Beach at NexJenn Financial Services, said their need to obtain continuing education credits to maintain one credential has led to a virtuous cycle. “I’ve obtained the RSSA, RICP and other certifications just to satisfy ongoing CE for my CFP and CPA, and they have become key to my retirement planning engagements,” Beach said. “Not to mention, they give a bit of a leg up on AI, which doesn’t understand some of the nuances yet.”