Post-crisis after shocks hasten innovation

Robert L. Reynolds, 06/13/17

Five years after the 2008 financial crisis, we are still feeling the after shocks around the world. Among the deepest sources of investor anxiety today are the lower returns and increased volatility that have persisted over the past decade — or longer — among core asset classes.

Investors are eyeing the impact of this new market environment on investments, and on long-range strategies in particular, such as retirement income planning. The next step is to identify ways to navigate as we deal with a backdrop of market volatility, risks, and non-traditional opportunities. Conventional wisdom, shaped by decades of high-return investing, need to be reexamined, revised, or even scrapped. New thinking has become an imperative rather than an option.

Innovation has also become an imperative in approaching long-term investing strategies, such as those involving retirement assets. We have the ideas and tools today to enhance Americans’ retirement security. But both the investment industry and policymakers need to support innovations that help workers provide for their own future incomes in retirement. To start, we need to expand access to workplace savings plans, take automatic plan features to a new level of implementation, and raise the bar on deferral rates.