The Key Ingredient in a Financial Wellness Plan

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Financial wellness is a hot topic – talked about a lot, but rarely implemented successfully. But financial wellness is critical.

In a recent Aon Hewitt study there were a number of high-level takeaways that impact advisors:

  • Nearly 6 out of 10 employers are very likely, and another 33% moderately likely, to focus on financial wellness in ways that extend beyond retirement decisions. Approximately 44% of employers said they were very likely to measure the competitive position of their retirement plan;
  • At of the beginning of 2017, 58% of employers have a tool available to workers covering at least one aspect of financial wellbeing and that is expected to climb to 84%;
  • Increasing savings rates is the primary focus of many employers, with only 15% stating they are comfortable with the average savings rate in their plan; and
  • Only 10% of employers feel satisfied with their workers’ knowledge about how much they need to save in order to pursue a successful retirement.

The message here is clear – employers are going to need much more than just a good retirement plan from their advisor. They will be looking to impact employees at a much greater level. And this will put many plans up for bids. And the winner will not be the lowest cost provider. It will be the one who offers many of the elements the employers need to deliver, well beyond just the retirement plan itself.

The role of advisor in the retirement-plan space is changing. It is no longer good enough to bring a good retirement plan platform or to show up semi-annually and conduct the enrollment meetings. Advisors must change the way they approach this business. They must evolve into true strategic partners with their plan sponsors.

In the Winter 2018 NAPA Net Magazine, Edward O’Connor summarized it best when he said, “The endgame is now financial wellness, not just retirement readiness, and this is broadening what needs to be delivered by financial advisors.”