Products April 11, 2018

Vanguard Guide Helps Define Retirement Goals, Risks, and Resources

Vanguard analysts have published a new framework to help guide retirees as they set investment goals, define their risk budget, plan for health care expenses, and tackle other challenging tasks.  

Reported by

Vanguard has published a “simple, easy-to-understand framework” to help new and established retirees prioritize conflicting financial goals.

“From constructing an investment portfolio to considering health care options, retirees face unique decisions on complex issues, which can be daunting. Our framework is both practical and prudent, giving retirees guidance and confidence in making thoughtful financial choices,” says Colleen Jaconetti, a retirement planning expert in Vanguard’s Investment Strategy Group.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

Dubbed “The Road to Retirement Security,” the framework helps retirees address basic living expenses, establish a contingency reserve, account for discretionary expenses, and structure a legacy. Each individual can prioritize these goals differently, the firm explains, balancing cash flow goals of meeting immediate expenses and reserve goals, such as leaving assets to heirs.

According to Vanguard, retirees next need to understand and address potential risks, including market risk, health risk, longevity and mortality risk, event risk, and tax and policy risk.

“All investors face corrections and bear markets; such large pullbacks have occurred every two years on average since 1980, according to Vanguard’s Investment Strategy Group,” the firm notes. “Inflation is also a risk, with the potential to erode a retiree’s purchasing power over time. For investors holding bonds in their portfolios, rising interest rates are another factor to consider, with the potential to decrease the value of a bond portfolio. Rising rates can also increase the cost of some annuity products.”

Vanguard further points to health risks as a major retiree consideration, which can vary greatly depending on genetic and lifestyle factors; the amount of available support from the government, an employer, or private insurance; and the desired level of care.

The next step in Vanguard’s framework is a thorough evaluation of available resources, which will enable retirees to achieve their highest-priority goals while managing the accompanying risks. These can include guaranteed income such as Social Security or a pension plan, liquid assets, and additional resources such as work after retirement.

The final step is developing a plan that accounts for competing priorities, risks, and finite resources, given a retiree’s unique circumstances, the firm explains. Vanguard believes a well-formulated plan, combined with ongoing oversight and evaluation, will give retirees the best chance to achieve financial security.

Products April 11, 2018

Internal UBS Memo Details New Equity Plan Advisory Services Push

An internal memo circulating this week at UBS announces a series of senior hires and details the launch of an expanded digital platform supporting advisers’ delivery of equity compensation plan services.

Reported by

In a memo shared today with PLANADVISER, Michael Barry, head of UBS Equity Plan Advisory Services (UBS EPAS), suggests the firm is making a new push to expand the business line and revamp its digital offerings in the area.  

Writing to UBS financial advisers that support the firm’s Equity Plan Advisory Services business, Barry highlights the recent introduction of an enhanced equity plan recordkeeping platform, “UBS Plan Admin Pro.” He also commends his colleagues for “the planned launch of our transformed participant digital experience (UBS One Source) later this year, which will include a more streamlined experience as well as access to both digital advice and financial wellness tools.”

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

“In the highly competitive environment in which we operate, we cannot afford to be complacent and must continue to drive our business and the marketplace forward with new and innovative solutions,” Barry writes.

The memo notes that UBS EPAS has successfully launched the first clients onto the UBS Plan Admin Pro platform, and Barry says the firm will be dedicating significant resources to seeding the new platform.

Other details in the memo include a description of the team that will lead the EPAS expansion effort. Mike Nannini will serve as head of EPAS Corporate Business Development, reporting to Barry. In the role, Nannini will work closely with wealth management, investment banking and asset management teams “to engage both public and private companies with our equity plan, broad-based financial wellness and executive planning solutions,” Barry says. Before joining UBS, Nannini held sales-related management roles at both Paychex and Bank of America Merrill Lynch.

Steve Cahoon has also joined UBS as an EPAS divisional sales director, reporting to Nannini; he will lead corporate business development efforts within the wealth management USA East Division. Prior to joining UBS, Cahoon had a 30 year career with Fidelity Investments. With Nannini’s transition, Patrick McGrady will take on a new and expanded role as head of Education and Advice Delivery within Employee Wealth Services, reporting directly to Peter Vincent.

“These organizational changes are effective immediately and reflect an ongoing commitment to provide our internal talent with new opportunities while also acquiring external talent where appropriate,” Barry writes.

The announcement comes as evidence mounts that equity compensation plan participants are hungry for advice. One recent survey, for example, showed that just half of respondents feel confident in their ability to make the right decisions about their equity compensation plan on their own. The data further showed equity compensation serves a number important and diverse functions in workers’ overall financial planning. While employees utilize their benefits in multiple ways, they are most likely to do so to increase liquid cash on hand (35%), make a large purchase (28%) or help prepare for retirement (11%).

According to the survey, the average total value of U.S. individuals’ equity compensation holdings is $72,245, and approximately two-thirds (63%) of employees are fully vested. The study also revealed approximately three-quarters (76%) of respondents consider equity compensation part of their long-term financial plan, and most report their equity compensation helps them feel less stressed about their finances (76%) and more prepared for retirement (63%).

Most notably, 80% of all respondents say they would be much more confident with the help of a financial adviser. Respondents would like advice on the tax implications of their decisions (50%), using the benefit to help prepare for retirement (44%) and knowing when to exercise or sell their equity awards (35%).

«