Deals & People June 30, 2016

Ameritas to Take on Guardian 401(k) Business

However, the two firms have established a long-term strategic marketing relationship under which Ameritas will provide 401(k) products and services through Guardian's agency system.
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Ameritas Life Insurance Corp. (Ameritas), headquartered in Lincoln, Nebraska, has signed a definitive agreement to acquire the 401(k) plan business of The Guardian Insurance & Annuity Company, Inc.

With this acquisition, Ameritas is delivering on its commitment to grow its retirement plans business. The acquisition provides Ameritas the opportunity to further build business scale, enter into a new strategic distribution relationship and deepen sales efforts in existing distribution channels. The company says the transaction reinforces its commitment to helping business owners and their employees plan and prepare for a more rewarding retirement.

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“Guardian determined it will be challenging for us to achieve the scale necessary to make the 401(k) business successful for the long-term. That said, Guardian continues to believe there is opportunity within this demographic segment of the market and the 401(k) business and remains committed to being a part of the business’ ongoing success. As a show of that commitment, Guardian and Ameritas have established a long-term strategic marketing relationship under which Ameritas will provide 401(k) products and services through our agency system,” Guardian tells PLANSPONSOR.

In a statement to PLANSPONSOR, Ameritas said, “At the close of the transaction, the retirement plans division of Ameritas will have assets under administration in excess of $10 billion consisting of over 6,000 employer-sponsored retirement plans serving over 150,000 individual plan participants. Guardian clients can expect to receive the same high levels of service and support that they have come to expect.”

Bret Benham, Ameritas senior vice president – Retirement Plans, said, “We see this transaction as an opportunity to build on an exceptional legacy of success and add even greater value to [Guardian’s] agents, advisers, plan sponsors and participants. Our organizations are committed to working together to assure a smooth transition, and even more importantly, grow a brighter future for the customers who trust us with their retirement savings.”

The retirement plans division of Ameritas provides retirement plan investment and administration services to more than 3,000 businesses and public entities nationwide. Retirement plan clients range from sole proprietors to the large corporate, non-profit and governmental employers.

Data & Research June 30, 2016

Millennials Have More Investment Confidence Than Boomers

However, more Millennials than Baby Boomers expressed high levels of concern about market volatility and its impact on them reaching their retirement goals.
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Forty-two percent of Millennial investors say they are very knowledgeable about investments, compared to 17% of Baby Boomers, according to a survey by Securian Financial Group.

Twelve percent of Millennials say they are not very knowledgeable about investments, compared to 25% of Baby Boomers.

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While $1 million was most frequently cited by both generations as the amount they would need to save to feel confident in retirement, more Millennials (52%) than Boomers (45%) are confident that they’ll reach their savings goal. More Boomers (11%) than Millennials (4%) are not confident that they will reach their goal.

“Confidence is a trait younger generations of Americans have never possessed in short supply,” says David Kuplic, Securian’s chief investment officer and executive vice president of Advantus Capital Management, a Securian asset management subsidiary. “Their natural self-assurance, along with the market growth most have experienced since coming of investment age after the financial crisis, could explain the gap between Millennials and Boomers, who have experienced many more highs and lows.”

However, because Boomers have more experience with market volatility, more Millennials than Baby Boomers expressed high levels of concern about market volatility (42% and 29%, respectively) and its impact on them reaching their retirement goals (49% and 39%, respectively). Millennial investors also are more concerned than Boomers about protecting themselves from a volatile market (54% and 43%) and understanding the reasons behind a volatile market (51% and 37%).

Millennials are far more likely than Boomers to take action (i.e., buy more shares, sell shares, shift shares) during periods of market volatility. Most Boomers—59%—say their typical reaction to a falling market is to leave their portfolio alone, compared to 37% of Millennials. Similarly, in a rising market, 61% of Boomers say they make no changes to their portfolio, compared to 40% of Millennials.

Thirty-nine percent of Millennials and a majority of Boomers (51%) say they are moderate investors, but surprisingly, more Millennials (15%) than Boomers (8%) say they are very conservative investors.

Nearly two-thirds (65%) of both Millennials and Boomers seek investment advice from financial advisers. The second-most cited source of investment advice for Millennials is family (54%) and for Boomers is news outlets (39%).

Millennials are much more likely than Boomers to seek advice from money management websites (49% and 29%, respectively), banks (41% and 15%), friends (39% and 18%), blogs (25% and 7%) and social media (13% and 3%).

To compare generational investment behaviors and reactions to the market volatility that began late last summer, Securian Financial Group conducted a survey of 1,997 investors, inclusive of 1,040 Millennials and 957 Baby Boomers. The survey report is here.

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