Employees Want More Retirement Guidance

American workers are expecting more help from their employers in regards to retirement planning, according to a new study from American Century Investments. The survey, which included responses from over 2,000 defined contribution plan participants, found that retirement is top of mind for employees but they still need more help.

80% of participants believe that they would have saved more if their employer had given them more of a “nudge.” Participants were especially interested in investing help.

Employees are also open to more aggressive saving targets; 70% support automatic enrollment at 6% and nearly 80% support automatic contribution increases. 90% of participants had at least some regret about retirement savings.

Not saving enough for retirement was mentioned more frequently than not doing better in careers or personal relationships.

Other studies support Americans’ desires for more financial guidance and growing trust in financial professionals. The Allianz LoveFamilyMoney study found that 92% of respondents who have used financial professionals said they believe that the relationship is helping them achieve their financial goals, and 74% believe that the extra guidance is worth the cost.

Even respondents who have never used a financial professional believe that professionals are helpful in achieving financial goals.

The differences in behaviors and feelings of financial well-being between those who use financial professionals and those who do not are clear: 12% of those who have never worked with a financial professional are unsure of how to fund their retirement, compared to 3% of those who have worked with a financial professional.

60% of respondents who work with an advisor feel very secure about their retirement, as compared to 32% who do not, according to Deloitte.

Working with a financial professional also encouraged more savings, investing, and long-term goal-setting.

Deloitte also found that 78% of consumers surveyed in 2014 trusted their own financial professional, compared to 68% in 2012, indicating an ongoing upward trend. The positive sentiment towards financial professionals and openness towards receiving help should be good news to plan sponsors.

However, employers still have a lot of room to expand their engagement and guidance. Only 14% of respondents believed that their employers had done everything possible to help with retirement planning, and employers underestimate the amount of employees that want at least a “slight nudge,” according to American Century Investments.

Financial Wellness Is Coming to Mountain View!

Want to improve employees’ financial wellness?

Come learn how to design an impactful financial wellness program at an interactive workshop in Mountain View, California.  You’ll get to learn first-hand how today’s technology, including iPads, can better engage employees and help them get on track to reach their financial goals.

The workshop content was developed with leading behavioral economist and NY Times bestselling author, Dan Ariely, and is based on his research on how people make decisions in the real world.

In the spirit of learning while doing, every workshop attendee will get to use an iPad to simulate the financial wellness workshop experience.

Space and iPads are limited, so please register today.

Eventbrite - Designing an Impactful Financial Wellness Program

Retirement Readiness Webinar- You’re Invited!

Want to learn how you can boost employees’ retirement readiness and help them reach their financial goals?

Then join us for an upcoming webinar on “Retirement Readiness: Designing an impactful program.”

Thu, Nov 8, 2012 2:00 PM – 2:45 PM EST

Wed, Nov 14, 2012 4:00 PM – 4:45 PM EST

In this short webinar, you will learn how to:

  • Design a measurable, holistic retirement readiness program
  • Use behavioral economics to nudge employees to save more
  • Affordably deploy today’s technology to engage employees and boost enrollment
  • Calculate the cost savings of helping employees prepare for retirement

Key findings will be presented from a collaboration with leading behavioral economist and NY Times bestselling author, Dan Ariely, as well as lessons learned from testing a new employer-branded iPad app with employees.

You will also learn about where plan education is heading in this informative webinar. Be our guest and help ensure sure employees are on track to reach their financial goal and achieve a secure retirement.

How Providers Can Grow Advisor Share

As retirement plan advisors become increasingly important sources of distribution, virtually all providers want to know how they can grow their share of advisors.

In this short video clip, Jason Chepenik, who in 2010 was named the Top Advisor in the Mid-Market Retirement Plan space by the 401kWire, explains some of the steps providers can take if they want to deliver real value to advisors like him (scroll over “Playlist” to view more videos):

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Why Income Products Matter

One of the coming trends in the retirement plan space is the “DB-ization” of defined contribution plans.

In this short video clip, Jason Chepenik, who in 2010 was named the Top Advisor in the Mid-Market Retirement Plan space by the 401kWire, explains why the next generation of retirement income products from leading fund companies matter:

Jason Chepenik: Succeeding in the retirement plan industry

As part of a new video series interviewing advisors and other folks involved in the retirement plan industry, Jason Chepenik, CFP® AIF® who is a Managing Director at Chepenik Financial, offered to kick things off.

If you haven’t already heard of Jason, in 2010 he was named the Top Advisor in the Mid-Market Retirement Plan space by the 401kWire and is a frequent speaker at conferences. More importantly, Jason is fun to watch on video (though we did edit out his on-air sneeze).  

Here are some videos of Jason explaining what he thinks drive success in the retirement plan industry for advisors, as well as providers (scroll over “Playlist” to view more videos):


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Plan Advisors: Retiremap’s Key Benefits

For top retirement plan advisors, Retiremap helps them differentiate their services when it comes to engaging participants and delivering education. At the same time, Retiremap measures their impact on plan outcomes by boosting participant savings rates and reducing plan sponsors’ fiduciary liability.

For producing advisors, Retiremap provides them with access to participant level data in order to better serve participant needs in less time.

Unlike providers’ tools, Retiremap is advisor centric and offers a holistic participant assessment by analyzing their short term goals and household profile. This short six minute video provides an in depth overview of the benefits and how the software helps top advisors win more plans.

***To download this video for your iPad, tablet or computer, click here***

Plan Sponsors: This Is How Retiremap Works

If you’re a plan sponsor and want to see how Retiremap works to engage participants and reduce your fiduciary liability, just watch the video below. Retiremap was developed with a leading behavioral economist to be highly engaging, while reducing fiduciary liability through pushing education out to all participants and offering verifiable 404(c) disclosures.

To download a copy of this video onto your iPad, tablet or laptop, just click here.

Here’s how it works:

Making It Easy For Advisors

Having worked with financial advisors for a few years now, we recognize that they are a busy bunch often running in many different directions.

To make things easier for them, we are formalizing the Retiremap sales and implementation process so that all they really have to do is come up with a list of plan sponsors who would be interested in improving plan outcomes and reducing fiduciary liability and then make the introductions. We’ll take it from there.  Of course, the advisor is always part of the process, but they do not have to drive the process and we make sure to stay in regular contact.

This flow chart helps make Retiremap’s sales and implementation process more clear for advisors, so that they better understand all the ways that the Boulevard R team provides support.  Our mantra is:

“You make the introductions and we will do everything else.”

In addition to creating a landing page like this for advisors (you can request your own landing page here), we will also create a powerpoint slide deck that you can present on its own or we can incorporate it into your Overview of Services presentation.  Here is a firm-branded version of the presentation:

Finally, to make things even clearer, here are some common FAQs that advisors have about implementing Retiremap:

How do we get participants to use it?
Boulevard R helps you actively promote plan education and engage participants through unique delivery options that include:

  • Webinars
  • Email activation links that originate from the benefits contact, but are sent by Boulevard R on their behalf
  • Mobile computing (eg. iPads)

How do we roll it out?
Once the agreement has been signed, Boulevard R will work with you and the plan sponsor to create a timeline for an initial participant webinar, as well as presentations and email campaigns. Our support team is also available to do presentations throughout the year and can coordinate email campaigns or tablet (eg. iPad) deployments based on your schedule.

What if I do not meet with participants?
Retiremap offers more personalized educational value to participants than most plan education meetings and in significantly less time. For participants seeking advice or financial planning assistance, you can refer them to a qualified advisor you trust through your Advisor Management Interface.

What Happened In Vegas

Not everything that happens in Vegas stays in Vegas. Last week I attended the 401kWire Influencers’ Summit, as well as the ASPPA 401k Summit and after a brutal five days of hardly ever seeing the light of day, I learned a lot.

Let’s start with the 401kWire Influencers Summit, since that was where the industry leaders and top advisors gathered to discuss what is happening in the industry. I’ll outline the top trends that struck me and then expand on a few below and hit on more in a later post.

Top trends:


  • Fee disclosure will collapse margins
  • Big focus on improving plan outcomes / savings rates, with the idea floated of doing an industry “Got Milk” style media campaign to get savings rates to 12%
  • If the industry doesn’t improve outcomes, they are essentially inviting the government to gut their business model
  • Advisors are the key to better outcomes through one-on-one meetings with participants (advisors are the one part of the industry that are not yet a commodity)
  • Most vendors have drunk the behavioral finance Kool-Aid, around plan design and “free lunches” (see Dan Ariely’s book “Predictably Irrational”) that induce participants to improve their behavior
  • Investment solutions will increasingly move in the direction of defined benefit plans, with lifetime income solutions (for all the talk about meddling government  intervention, I heard someone float the idea that these investments should be government backed!)
  • Advisor or plan sponsor access to recordkeeper data is coming (my guess this is still a long way off)
  • Mobile technology is a trend/reality that vendors need to wake up to
  • The industry needs disruption (unlikely to come from an incumbent)
  • Social networking is something they feel needs to be harnessed, but have no idea how to do it
  • Recordkeepers are moving to an a la carte business model where services can be added, with a breakdown on cost for transactional (the 87 octane option) and advice (the non-commoditized 91 octane option);  also expect significant consolidation in RKs as margins flatten and technology costs increase
  • Plan sponsors are paternalistic when it doesn’t cost them anything (this doesn’t apply for non-profits)
  • Coming industry conflict will be between fiduciaries and non-fiduciaries

While we’re new to the 401k space, what stuck me is that advisors and industry leaders were thinking about retirement in the same way we were when we started Boulevard R in 2006 (focus on improving plan outcomes).  The main difference is that the landscape has shifted with the market of 2008, fee disclosure, the ascendance of behavioral finance and the growth of mobile technology.


Improving Plan Outcomes

One of the panelists at the 401kWire Summit asked the audience to think about not only their profit motive, but also the social good that 401k plans provided.  It’s pretty clear that Obama and many Democrats see 401ks as a vehicle for social good and new regulations aim to improve outcomes by lowering costs and reducing the industry’s profit margins.

The challenge is that the 401k was designed to be a secondary vehicle for retirement savings and as companies have cut defined benefit plans, they are not willing to increase the cost of their 401k plans.  Even though they save thousands of dollars per employee with a 401k plan, employers are hard pressed to add any cost to the plan, even if that means a further decline in plan outcomes.  The challenge is then to identify plan services that deliver no or little value (eg. daily trading capabilities, enrollment/educational brochures, etc.) and replace them with services that can measurably improve savings rates.

The further challenge is that plan sponsors don’t really want more participants to max out the company match, making the plan more expensive.  So we need to create some tools and processes to improve plan outcomes, while restructuring the company’s contribution in such a way that the overall cost to the plan sponsor is insignificant.

Advisor Is Ascendent
It was no coincidence that the 401kWire’s event focused on advisors (aka Distributors) for the entire first day.  Vendors echoed the importance of advisors as “boots on the ground” and the key changes agents when it comes to improving plan outcomes.  One panelist characterized advisors falling into one or at most two of these personality types:

  • Engineer (focused on plan design and all things quantitative and measurable)
  • Philosopher (focused on education and how to improve outcomes (caveat- I’m not 100% sure about this definition))
  • Networker (loves people, winning plans and the sales side of the 401k business a natural sales person)

As the industry moves towards independence, transparency and meeting fiduciary needs advisors are playing an increasing central role.  My guess is that more advisors will start breaking into the direct sold marketplace, since they have a better story to tell and can often provide a better mix of low cost investment options.

There was significant discussion about the generalist or advisor who dabbles in 401k plans, being pushed out of the market as plan specialist take away their share of the business.  However, it was also pointed out that many of the plans are run by advisors who have a personal relationship with the business owner or fiduciaries (eg. brother in law, college buddy) and that it won’t be so easy to terminate these relationships.

Though I don’t remember this being discussed explicitly, rollovers are a massive opportunity as the huge demographic shift from Accumulators to Retirees starts to happen.  According to Cerulli, by 2015 at least $2T or 48% of $4.6T will be “in play” which is why I’m guessing that Schwab is rolling out a new service that couples low cost ETF funds with some type of professional advisor/advice model for each participant (more on that in another post).

Leveraging Mobile and Social Technology
There was a lot of talk about using mobile and social technology to improve plan outcomes.  Personally, I think it’s hard for participants to have a very quality interaction on a cell phone.  They’re good for games, but I don’t think participants want to play a 401k games.  Where I see a real opportunity is with iPads and using both the interface to engage participants around their financial goals, as well use tools like video conferencing to reduce costs and improve outcomes.  There will seemingly always be a need for an advisor, but how do we make that experience more effective for both parties?

When it comes to social networking tools, I see the Fidelity’s of the world having a hard time getting traction on Twitter and Facebook.  Partly it’s a compliance issue, but mostly it’s a coolness issue.  Who wants to hear what a cooperation has to say, unless it’s hip, relevant and can save me time or money (JetBlue)?  Why would I want to add Putnam or Schwab to my flow of information overload?

Disruption: From Where?
I think most key industry players recognize that the 401k industry has been complacent.  What motivation did they have to change with such healthy profit margins?  It was pointed out that many of the current CEOs of major financial services companies came up through the DC side of the business, but are those really the people who are going to risk the future of a company in order to re-invent it?

While there is a need for a new way to evaluate the success of 401k plans and get them on track, I’d be surprised to see it come directly from the 401k industry.  I know Putnam has developed a monthly income forecaster, but most DC-IOs have few if any tools and even then, they are proprietary and provide no data through to the advisor.

Looking out across the 401k landscape, the only new disruptive company that I can think of is Brightscope.  All the rest are geared toward just helping vendors or advisors do a better job.  Financial Engines has had a somewhat disruptive impact in the Jumbo plan space, but they now sell by partnering with the vendor and have a big payout in the form of their Cost of Revenue.

The key to disruption is developing processes and software that leverage the impact of the advisors and cut out ineffective costs, while getting more assets into the plan by making it easy and compelling for participants to save more.  This is an approach that Boulevard R is committed to seeing through with Retiremap and look forward to sharing our results as we roll it out for the initial plans in the coming months.