Products July 16, 2018

MetLife Offers Tips for Creating Financial Wellness Programs

The second whitepaper in a series says a successful financial wellness program helps employees achieve financial security by bridging short-term needs with long-term goals.

Reported by

Given the diversity of the modern workforce, customizing financial wellness benefits is essential for strategically aligning interests across demographics and driving business goals, according to the latest in MetLife’s “Financial Wellness: Creating a More Productive and Engaged Workforce” white paper series.

The second whitepaper, “Tailoring the Program,” says financial wellness is centered around four core principles: financial awareness, financial health, financial security and financial inclusion. While a comprehensive financial wellness assessment can help employers determine which program elements take priority, an effective financial wellness program should strive to meet all four core principles.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Regarding financial awareness, the paper explains that just as demographics impact the type of information and services needed, demographics also determine the best communication methods. Online learning tools might work better with some employees while others might prefer one-on-one counseling or classes. Flexibility in the way information is delivered can be crucial to employee experience and overall success of the program.

As for financial health, the paper says budgeting and financial planning tools can help employees manage day-to-day finances and protect against unplanned expenses.

According to the paper, the ability to plan and protect for milestones such as buying a home or retiring is the lynchpin of financial security. A successful financial wellness program helps employees achieve financial security by bridging short-term needs with long-term goals.

In addition, it says most employees have a deep-rooted desire to take ownership of their financial situations and feel they are making wise choices. For this reason, a financial wellness platform that makes it possible for all employees—from entry-level to high-ranking executives—to access employer-sponsored benefits is most effective because it facilitates financial inclusion.

The first and second paper in MetLife’s series may be downloaded from here.
The Markets July 16, 2018

Alternatives Seen as a Panacea for Volatility

More advisers are turning to alternatives, according to a report from BNY Mellon | Pershing.

Reported by

Given the increase in market volatility and a close correlation between asset classes that heretofore provided diversity, advisers may want to consider suggesting alternative investments, such as real estate investment trusts (REITs), private equity and hedge funds, according to a report from BNY Mellon | Pershing, “The Alternative Advantage.”

In a recent survey, the firm learned that 53% of advisers expect to increase their allocations to alternatives by the end of this year. The firm also notes that at the end of last year, there was $7.7 trillion invested in alternatives.

Advisers are increasingly using alternatives, according to BNY Mellon | Pershing. Alternatives can also suit the increasingly sophisticated needs of high-net-worth individuals.

“A lack of recent product development and the delay in the resolution of the fiduciary rule are two reasons for slow REIT growth in the last few years,” according to CCO Capital’s Bill Miller. “However, hopes for sustained economic growth moving into 2019 fuel an argument for increased allocation to REITs going forward.”

Additionally, traded and non-traded REIT fees have come down, and they have increased their transparency. BNY Mellon | Pershing suggests that advisers looking into REITs should consider those that have buffers and cushions against rising rates. Additionally, REITs that feature tenants with mature business models and staying power could translate into more stability, as rental spaces may stay occupied for longer periods of time.

As far as private equity is concerned, it used to be only available for institutional and qualified investors. Today, however, it is available for the mass-affluent.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

“Before advisers secure access to a private equity fund, it’s critical for them to take time to perform thoughtful due diligence,” says Justin Fay, director of financial solutions at BNY Mellon’s Pershing. “These learning opportunities not only allow advisers to better understand exactly what’s on the diversified menu of funds but also decide whether it’s the right fit for their client.”

Hedge funds can fill a needed niche in a portfolio against current market outlooks of low yield and high volatility. “Above all else, it’s critically important for advisers to know what’s currently available, understand what’s under the hood of what they are recommending, and determine the right risk/reward combination for each client based on such factors as objective, risk tolerance and suitability,” Fay says.

BNY Mellon | Pershing’s report, “The Alternative Advantage,” can be downloaded here.

«