Carson’s Financial Planning Head Brings Together 401(k), Wealth Advisement

Erin Wood of the Carson Group believes 401(k) plan advisement and individual financial planning are headed, “like a freight train,” toward an intersection.

Her position at Carson Group certainly gives her a good vantage point. About three years ago, she took the role of senior vice president for financial planning and advanced solutions, and she now oversees those services across Carson’s wealth and newer 401(k) practices.

“The wellness programs have been a huge focus for employers as they’re trying to figure out how to help their employees, not just with their health, but [with] their financial health,” Wood says. “Through me having both departments, I was able to see this real crossover and this genius happening on both sides. It hasn’t quite hit the mainstream yet, but I believe it is coming very quickly.”

Erin Wood

Wood says the idea of bringing in a 401(k) practice came from clients with businesses that wanted help with their retirement plans. Through that demand, the 401(k) group was expanded, and now, Wood says, the departments share planning and education resources.

“We’ve now been able to cross-function a lot of our team members from the retirement planning side and the wealth side to help boost the resources our advisors have access to,” she says. “We’re building everything into our [client relationships management system] so that advisers have access to the wellness programs and offerings. … It has been a big focus to tighten those up.”

In January 2023, Carson Group expanded its 401(k) services via a partnership with retirement plan provider Vestwell. The two firms created Carson Complete 401(k), giving Carson-affiliated advisers access to a proprietary plan offering. In December 2023, the firm acquired Oakeson Steiner Wealth & Retirement, which includes retirement consultancy services.

The Omaha, Nebraska-based firm currently has an advisory network of more than 150 partner offices overseeing a combined $38 billion in client assets.

Managing Wealth

Some in the retirement industry have been critical of advisories mixing 401(k) advisement and wealth management. In a report issued in August, the Government Accountability Office stated it is looking into potential conflicts of interest, including when advisers recommend participants roll over into an individual retirement account.

When asked about the potential conflict of interest in offering participants coaching and planning that might move to individual, paid advisement, Wood says that while some firms may approach it differently, Carson operates with a strict fiduciary standard.

“Every firm is going to have to make a decision on where they stand, on what rules they’re going to make their advisers follow,” Wood says. For Carson, “it’s been very clear that when [a participant] start[s] going outside of the plan and the resources we offer to the plan, then that individual needs to know exactly what they’re getting and what they are paying for and why are they doing it.”

At Carson, Wood says, 401(k) advisement and wealth management teams work together to ensure there is not a “tug of war,” but the business is looking at outcomes and fiduciary responsibility from both sides.

“I have been both on the financial planning and the retirement side, and [at other firms,] they frequently don’t talk to each other at all,” she says.

Wood says artificial intelligence is driving planning and advice forward quickly by offering things such as AI coaching to participants. That can get close to financial advice, she says, which the industry needs to manage carefully. One positive of the innovations, Wood says, is that they will make financial education and planning available to more people.

“It’s the idea that you can raise all boats just by helping give this information,” she says. “The whole economy gets better if we can help retirement plans get this right.”

Wood says a challenge comes when advisers operating with an assets-under-management pay structure are not incentivized to work with some of the clients. Some advisers, particularly younger ones, are working with a fee-based model of payment, better for this new system and, to Wood, a promising development.

A fee-based system may also work better for younger investors, who are interested in help with broad financial advice concerning investments, taxes and insurance, Wood says, whereas the Baby Boomer generation was more solely focused on investment management.

Job Movers

Wood is also focused on the savings risks for the more mobile workforce, a trending retirement topic. Recent Vanguard research highlighted the concern that, when workers move jobs, they often reset to a lower contribution rate or go long periods without contributing at all. Wood sees this as an opportunity for workplaces to step in—with the assistance of an advisory—to educate and communicate with participants on the correct contribution rate.

“This is where I think retirement planning and wealth crossing over becomes so important,” Wood says. “What we’ve been working on with our advisers is to make sure that when [an employee switches jobs], we’re talking with them about how much they were saving … and here’s what your new percentage should be, particularly as job moves often result in higher pay.”

Technology can also help employers—and advisers—get employees’ attention in times when workers need advice, she says.

“Giving advice on demand when someone needs it is the most important thing any of us can do,” she says. “Financial decisions can happen in an instant. Most people aren’t sitting around going, ‘Oh, six months from now, I’m going to have this emergency.’ But when it happens, they need that advice.”