The tool, Financial Wellness Monitor, is being offered free to clients using the firm’s Advice Access service. It calculates an overall “Financial Wellness Score” indicating to employers whether their employees are exhibiting behaviors within their retirement plan that may lead to successful long-term savings. The monitoring can also pinpoint “at-risk” saving and investing behaviors among individuals or segments of plan participants or identify specific audiences that may benefit from targeted communications and financial education programs, often in partnership with a Merrill Lynch financial adviser overseeing the plan.
A positive score is based on metrics such as how much employees are saving within the plan, whether their assets are appropriately diversified or if they using target date funds improperly, and whether they are they fully benefiting from the company match, among others. Scoring for each participant is weighted as follows: 40% savings, 40% investing, 10% monitoring and setting goals, and 10% preserving retirement assets. The average of all employees’ scores produces a plan’s “Financial Wellness Score.”
The Financial Wellness Monitor was designed in 2009 and initially tested among four of Bank of America Merrill Lynch’s largest 401(k) plan sponsor clients, along with a handful of other mid- to large-sized retirement benefit plan clients. From February through April 2010, the tool is being introduced to more than 300 plan sponsor clients who use the Merrill Lynch Advice Access service. Then, later this year, Bank of America Merrill Lynch plans to further refine the tool’s scoring methodology in order to make it broadly available to all of its plan sponsor clients.