Financial Wellness Insights From 2 Advisers

During a PLANADVISER Practice Progress webinar last week, two industry experts sought to help retirement-focused advisers understand what financial wellness means for retirement plan participants, how it has evolved and where the industry is heading.

Retirement plan participants have had a tough year, with many experiencing rising inflation, portfolio value reductions and the effects of geopolitical uncertainty. While everyone’s participant base is different, John O’Brien, director of retirement plan consulting for Venture Visionary Partners, said that he hasn’t yet seen a “high stress point” when it comes to retirement planning.

Since 2008, most participants have received enough financial wellness education to understand that retirement planning vehicles are long-term investments, O’Brien said. But, he noted, it’s important to stay mindful of what circumstances are changing for participants so that they can stay aligned with their long-term goals.

Kelli Send, participant services senior vice president at Francis Investment Counsel, leads her firm’s MoneyAdvice@Work adviser team, which focuses on providing just about anything related to financial planning, she said.

“We are unique. I will say that we are the unicorn in the industry in two ways,” Send said. “A lot of financial wellness providers are not RIAs [registered investment advisers]. So therefore, they can do everything except they can’t start talking about investments. And to us we can do both because we have a large RIA that services as planned consultants and so we’re able to give specific investment advice even on outside investments.”

Send said the second reason they are unique is because they have intentionally avoided having any wealth management service. This allows them to service their clients with no hidden sales angles, which she said is important for both the firm and the participant.

The team covers the entire lifecycle of all financial planning topics, Send said, noting that financial planning isn’t only about investments.

“It is all of the financial planning elements, and it’s very much age-based,” Send said. “For the young’uns, we’re talking about emergency funds for the pre-retirees, we’re giving advice on Social Security. We are currently expanding our offering to provide advice on will prep and things like that, as well as Medicare.”

Financial stability and emergency savings are both important, O’Brien said, but it may be best to make those savings harder to access and “not one or two clicks away.”

“They see it once a quarter, maybe, because that’s what’s going to enable them to see that traction,” O’Brien said. “It’s no different than 401(k) savings: starts small, but overtime gets bigger and bigger.”

His main concern for those using an employer sponsored emergency savings program is that they will divert savings away from their 401(k) plan and lose out on investment opportunities, O’Brien said.

“It’s going to be strictly transactional,” O’Brien said. “They’re going to be, for all intents and purposes, chopping off their nose to spite their face. You’re going to sacrifice your retirement savings and your long-term potential for an immediate need.”

Advisers should have conversations about service benefits available to their clients and then become the positive reinforcement, O’Brien said.

“They don’t need a special tool accompanying their retirement benefits. In order to get it, they just have to have the education, the backup, the support and then the knowledge,” O’Brien said. “I’m a big believer that if you can help others succeed, then you’re going to be successful yourself. There’s no need to leave it up to regulation or new products and features that the bureaucracy wants to put into place for us to do the right thing for participants.”