Voya Investment Management of Voya Financial, Inc. introduced
a program centering on professional development for financial advisers who
serve both personal and defined contribution (DC) clients.
Named Retirement University for Advisors, or “Retirement U,”
the program gathers resources for advisers seeking to increase
retirement-focused guidance, including interactive web experiences such as live
seminars that provide CE credits.
“With ‘Retirement U,’ we believe that advisers will be able
to add demonstrable value in the retirement process and differentiate
themselves from their competition,” says Jake Tuzza, managing director and
head of intermediary distribution. “Advisers working with personal
retirement clients have specific challenges, not the least of which includes
managing their practices while also trying to help clients get ready to retire.
‘Retirement U’ addresses these specific concerns and needs in the most
practical, most-consumable way possible.”
Another resource available within “Retirement U,” is “Tap
into the Power of Consistency,” a course that offers advisers access to
Voya Investment Management’s Consistency Lens system, and provides
tips and strategies to help clients avoid emotional triggers likely to disrupt
long-term investment success.
The program’s launch comes a month after former CAIA for CIMA Joseph M. Labella was announced as Voya’s new retirement strategist. The
role was created to better assist financial advisers in addressing retirement planning
issues for clients.
Employers who help employees
improve their overall financial wellness and reduce financial stress can
reduce costs in a number of areas that positively impact the company
bottom line, as well as improve employees’ retirement prospects, a study
from Financial Finesse finds.
The study found that employees who
suffer from overwhelming financial stress or struggle to maintain
financial stability tend to incur both immediate and future financial
costs for their employer in the form of absenteeism, garnishments,
payroll taxes, and delayed retirement. As employee financial health
improves these costs diminish.
For its 2016 ROI Special Report,
Financial Finesse conducted a case study of a Fortune 100 company’s
comprehensive workplace financial wellness program from 2009 to 2014.
Depending on employer size, employers can save up to $433,007 in
garnishments, up to $682,034 in flex spending/health savings, and up to
$4,347,275 in absenteeism by improving the workforce’s financial
wellness score from 4 to 5 on a 10-point scale. The savings is even
greater when improving the workforce’s financial wellness score from 4
to 6.
Financial Finesse notes that higher rates of flexible
spending and health savings account contributions occur among
participants with higher wellness scores. As employees contribute more
into pre-tax flexible spending and health savings accounts, employer
FICA-tax expenses are reduced.
In addition, the study found
higher financial wellness scores correlate to the ability and choice to
make increased retirement saving deferrals. While employees overall were
not saving the recommended 10% to 15% of their income for retirement,
those with higher financial wellness levels made larger contributions on
average.
An analysis of retirement plan contribution rates found
that employees that improve their financial wellness score from 4 to 6
could potentially improve their retirement plan balance by more than
27%.
NEXT: Addressing different stages of financial health
As part of the study, Financial
Finesse separated participants into one of five levels of financial
health based on their financial wellness score: suffering, struggling,
stabilizing, sustaining, and secure.
Thirteen percent of
respondents are “suffering” employees. They averaged 17 hours of
absenteeism a year, 10.7% had wage garnishments and 49% reported having
taken a retirement plan loan or hardship distribution. They are also the
least likely to contribute to their retirement plan (80%), have the
lowest average retirement plan deferral rate (5.04%) and contribute the
least on average to flexible spending and health savings accounts.
Financial
Finesses suggests suffering employees tend to feel overwhelmed by their
circumstances and may lack the necessary guidance and motivation to
help them out of their situation. For this reason one-on-one guidance
and coaching on cash and debt management from financial professionals
via phone-based or in-person sessions is the best way to stop the
financial bleeding and to start on the road to financial recovery.
Additionally, employers should require employees to participate in
mandatory financial counseling when wages are garnished, or when
employees request a retirement plan loan or hardship withdrawal.
Employees that receive financial counseling at the time of requesting a
loan or hardship withdrawal are 35% to 50% less likely to request a
subsequent loan or hardship withdrawal compared to the average rate of
recidivism.
Contributions to flexible spending and health savings
accounts were a bit higher for “struggling” employees than those made
by suffering employees, and average retirement plan deferral rates
increased to 6.18%. Despite having substantially higher cash and debt
management financial wellness scores relative to their suffering
counterparts, struggling employees exhibit a severe lack of confidence
in retirement and investment planning. Only 18% reported feeling
confident in their investment strategy, and 5% indicated being on track
for retirement.
Best practices for financial wellness programs that target struggling employees suggested by Financial Finesse include:
Mandatory
financial counseling for employees requesting a retirement plan loan or
hardship distribution, or who are having wages garnished;
Employer-paid financial education offered during work hours; and
Access to financial coaches following workshops/webcasts.
NEXT: When employees are more financially healthy
“Stabilizing” employees have cash flow and debt under control, but
they generally lack progress toward longer term financial goals like
paying for college and retirement. Financial Finesse suggests employers
should offer financial education that incorporates company benefits
about these topics. Since stabilizing employees may not be able to take
time off to participate in these educational sessions, employers should
offer them during lunch periods, online, or via one-on-one coaching
either on the telephone or in person. Benefits planning should be
offered prior to open enrollment to improve benefits participation, and
general financial planning should be offered throughout the year to
assure budget, credit and risk issues are being addressed.
As
employees become more financially healthy, it will be important for them
to develop wealth protection strategies that preserve assets and manage
risks, Financial Finesse says. This can be done through advanced
financial planning and education that addresses wealth-protection
strategies through insurance, tax, and estate planning. This can raise
awareness of voluntary benefits such as prepaid legal and portable
insurance and help position the plan sponsor as an employer of choice.
Best practices for reaching “sustaining” employees include:
Promoting advanced financial planning in program communications;
Creating peer-to-peer learning opportunities through group learning sessions; and
Offering access to unbiased financial professionals for investment portfolio reviews.
Finally, best practices for assisting “secure” employees Financial Finesse suggests include:
Offering access to highly credentialed, experienced financial coaches, such as CFP professionals and CPAs; and
Promoting
secure employees as financial wellness program champions that can serve
as internal ambassadors and/or lead peer-to-peer learning groups.