The Markets March 8, 2022

401(k) Index Underscores Investor Jitters

Facing some jarring geopolitical events, 401(k) investors reacted with above-normal trading activity during February.

Reported by

Alight Solutions has published February updates from its 401(k) Index, noting that it was another busy trading month for 401(k) investors, who traded an average of 0.02% of balances daily, compared to 0.017% last month.

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As international political events drove Wall Street lower, Alight says 401(k) investors reacted with above-normal trading activity. Investors favored moving assets into fixed income funds during 14 out of 19 trading days. Total transfers as a percentage of starting balance rose to 0.24%, compared to 0.15% in January.

According to the index, a “normal” level of relative transfer activity is when the net daily movement of participants’ balances, as a percent of total 401(k) balances within the index, equals between 0.3 times and 1.5 times the average daily net activity of the preceding 12 months. A “high” relative transfer activity day is when the net daily movement exceeds two times the average daily net activity. A “moderate” relative transfer activity day is when the net daily movement is between 1.5 and two times the average daily net activity of the preceding 12 months.

The index shows trading inflows mainly went to stable value, bond and money market funds. Outflows were primarily from target-date funds, large U.S. equity funds and mid-cap U.S. equity funds.

Alight also found that, after reflecting market movements and trading activity, the average asset allocation in equities decreased from 70.0% in January to 69.5% in February. Additionally, new contributions to equities decreased from 70.1% in January to 69.5% in February.

Products March 8, 2022

CFP Board Rolls Out Advisory Firm ‘Roadmap’

The Certified Financial Planner Board of Standards has also published a new resource guide for firms, detailing the ways to engage with the CFP Board and its Center for Financial Planning.

Reported by

The Certified Financial Planner Board of Standards has released two new resources for firms to help them develop their financial planning capabilities and support their advisory professionals.

The first is called Designation Policy to Designation Strategy—A Roadmap for Firms. It urges firms to be intentional in the designations and certifications they approve.

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The second, a Resource Guide for Firms, provides firms with ways to engage with the CFP Board and its Center for Financial Planning to support and grow their CFP population.

Kevin Keller, CFP Board CEO, says the resources will support his organization’s mission of helping advisory firms grow their workforce while increasing the access Americans have to competent and ethical financial planning.

“In creating these resources, CFP Board aims to help firms equip advisers with the skills and education they need to meet clients’ changing needs,” he adds.

The CFP Board says the designation policy roadmap “addresses the emerging trend of advisers pursuing credentials simply for the sake of having letters behind their name.” To this end, the roadmap outlines how firms can evolve their financial planning services into a quality offering by “moving from a designation policy to an intentional strategy that focuses on the skills and knowledge advisers need to become competent financial planning professionals.”

The resource guide describes the full suite of services firms can expect to receive from CFP Board and the Center for Financial Planning to build out their financial planning programs. The guide offers information on such topics as how to leverage the CFP Board’s corporate relations team within an increasingly competitive landscape and how the Center for Financial Planning can help firms attract and retain talent and diversify their workforces.

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