Vanguard Targets ‘Max Savers’ With New Financial Wellness Tool

The firm’s Retirement Savings Maximizer provides guidance toward additional tax-advantaged options if a saver is projected to hit the maximum elective deferrals in their defined contribution plans.

 

The Vanguard Group has rolled out a savings nudge in its retirement calculator platform targeted at participants who are nearing or have reached their retirement plan contribution limit.

Dina Caggiula, head of participant experience at Vanguard, explains that the Retirement Savings Maximizer, which the firm has been rolling out for the past month, is meant to help participants save to the IRS 402(g) limit or beyond.

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The online tool is built into the recordkeeping platform and includes a calculator that allows a participant to enter their current income, allowing Vanguard to provide a projection of how much that person should be saving for retirement, as well as for other goals like a new home or college education. Along with these projections, the participant also has access to financial education materials and advice services.

The IRS limits the amount of retirement plan elective deferrals a participant can exclude from taxable income each year. The 402(g) limit for 2024 is $23,000, an increase from the 2023 limit of $22,500. This limit applies to 401(k) plans, 403(b) plans, SEPs and SIMPLE IRAs.

“Largely why we built the [Retirement Savings Maximizer] tool was [because] we have 16% of our participant base that’s hitting the 402(g) limit every year or coming within $5,000 of doing so,” Caggiula says. “We did a lot of research on that population, and what we found was that where they’re saving after the 401(k) pre-tax source varied significantly, and many were unaware of how they can save in a tax-maximized way.”

Caggiula says the Retirement Savings Maximizer will be available to all plans and participants that use Vanguard as a recordkeeper. However, Caggiula explains that the tool will be marketed heavily toward “max savers” who are nearing the 402(g) limit or toward those who have already hit the limit and are looking for advice on where else they can save beyond their retirement account. These savers tend to have a longer tenure with Vanguard and have been in their plan for at least 10 years.

Caggiula says these savers also tend to have larger balances, with the average greater than $400,000.

“They are an audience that is frequently engaging with our digital experience and are also more engaged with reaching out to our contact center and are more interested in our advice solutions,” Caggiula says.

She adds that more than 40% of Vanguard’s max savers tend to hit the IRS limit within the first three-quarters of the year, which is why the firm is rolling out the tool early this year.

“We’re helping guide participants after [they’ve] maybe hit the limit in their pre-tax [retirement plan] to see if there is [a health savings account] available [to contribute to] or if there is an after-tax [Roth] plan available to them,” Caggiula says.

Vanguard’s tool recommends a “tax-advantaged savings hierarchy” with up to five steps participants can follow to become a “max saver.” These steps include:

  1. Meet your employer’s retirement match;
  2. Contribute the maximum amount to a health savings account (if you are eligible to do so);
  3. Max out 401(k) pre-tax or Roth contributions;
  4. Make 401(k) traditional after-tax contributions; and
  5. Consider saving in an IRA outside the retirement plan.

Caggiula says this is one of the first times Vanguard has built a solution that guides participants to save beyond a 401(k) plan and to consider other options like an HSA or IRA. She said this focus emphasizes the importance of thinking about participants’ “full financial picture” to help them achieve a successful retirement beyond just their defined contribution plan.

“At the highest level, we believe that to truly help participants reach retirement success, we have to address those competing priorities that are getting in their way,” Caggiula says. “We want to make sure that we’re thinking about the spectrum of different needs that participants have, so that we can send them the personalized guidance and tools that they’re going to need to succeed.”

Advisory M&A News – 2/5/24

Mariner Wealth Adds $104B in Institutional AUA; Heffernan makes Florida acquisition; OneDigital adds WealthSource with advisers in 9 states; and more.

Mariner Wealth to Acquire 2 Firms to Bolster Institutional Presence

Wealth advisement firm Mariner Wealth Advisors will acquire Winter Park, Florida-based AndCo Consulting and Covington, Kentucky-based Fourth Street Performance Partners in a simultaneous transaction adding 100 employees and bringing in $104 billion in assets under advisement.

The deal will “significantly bolster” Overland Park, Kansas-based Mariner’s institutional advisement presence in such areas as defined contribution and defined benefit, as it has recognized “the evolving landscape of retirement-to-wealth solutions,” according to the announcement. Terms of the transaction were not disclosed; the deal is expected to be completed by April.

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The AndCo team will lead a new business vertical, Mariner Institutional, which will contribute to the firm’s advisement of both institutional and individual clients. Fourth Street will merge with AndCo after the close, with each maintaining existing teams and service of institutional clients under the Mariner Institutional brand.

“The complementary nature of our clients and services will support our joint growth and offer existing clients and prospects additional services that will help enhance the overall client outcome,” Marty Bicknell, CEO and president of Mariner Wealth Advisors, said in a statement.

The agreements were finalized on January 29, with Berkshire Global Advisors serving as financial adviser to AndCo Consulting. AndCo and Fourth Street will continue serving clients out of their locations in Covington, Winter Park, Chicago, Dallas, Detroit, Pittsburgh, Cleveland and Reno, Nevada.

Heffernan Acquires First Coast Wealth Advisors

Heffernan Insurance Brokers and Heffernan Financial Services have established their first presence in Florida with the acquisition of First Coast Wealth Advisors in St. Augustine.

First Coast Founder and CEO Jeff Helms and his team joined Heffernan Financial Services, effective January 1. Terms of the transaction were not disclosed. Helms has worked in the financial services industry for nearly 40 years, joining First Coast Wealth Advisors in 2003 and holding multiple leadership roles.

First Coast Wealth Advisors offers financial planning with consultative services, including investment strategy, tax mitigation, wealth transfer, asset preservation and charitable planning.

“With the addition of the First Coast wealth advisory team, we now have bicoastal expertise that includes team members who hold the prestigious designations of CFA and CFP,” Blake Thibault, president of Heffernan Financial Services, said in a statement. 

Heffernan’s companies include Heffernan Retirement Services, a full-service financial services firm that offers strategies and solutions for corporations, foundations and individuals. The firm is both vendor and investment neutral.

OneDigital Adds Wealth Management Firm Working in 9 States

OneDigital Investment Advisors, a wholly owned subsidiary of OneDigital, announced the addition of WealthSource Partners, bringing $2 billion in wealth management advisory assets to OneDigital’s $100 billion in assets under management.

WealthSource is a financial services company offering financial planning, investment management and insurance solutions. The 44-person team works with about 2,000 client families and brings more than 25 years of financial and M&A experience in nine states: Arizona, California, Colorado, Florida, Ohio, Oklahoma, Tennessee, Texas and Utah.

The firm was founded in 2016 by Bryan Sullivan of Vellum Financial and Eric Patton and Jon Dubravac of Avant-Garde Advisors when they combined their firms.

“We’re delighted to welcome the WealthSource team and weave their valuable expertise into our robust team of dedicated financial advisers,” Vincent Morris, president of retirement and wealth for OneDigital, said in a statement. “The wealth management industry is highly complex and demanding and, together with WealthSource, we will meet the increasing challenges with our depth of knowledge and mutual desire to put our clients’ needs first.”
 
Atlanta-based OneDigital is an insurance brokerage, financial services and HR consulting firm with more than 75,000 employees.

Carson’s $180M Partnership Starts Eastern Expansion Plans 

Carson Wealth is expanding into the East with the addition of offices in Hanover, New Hampshire, and Chester, Vermont, through a strategic partnership with Fisher Financial Advisors, which will be rebranded as Carson Wealth.

The offices will be Carson Wealth’s first in both states, which the Omaha, Nebraska-based firm intends to show its “commitment to extending its reach and impact.”

“Carson will be instrumental in elevating our client experience,” Tim Fisher, managing director and Wealth Advisor of Fisher Financial Advisors, said in a statement. “As we’ve grown, the need for additional expertise became apparent, and Carson’s expansive resources can help fill a lot of buckets for us, like portfolio management and tax and estate planning.”

The firm is also led by Fisher’s son, Nate Fisher, who noted in a statement that: “Succession planning was also a paramount consideration for us. We wanted not only to sustain our growth, but to continue expanding.”

The deal is Carson Group’s first of 2024, with FP Transitions serving as the M&A adviser for Fisher Financial Advisors.

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