Data & Research May 21, 2024

Employees Falling Short of Retirement Objectives

Lack of retirement preparedness is prompting employee interest in financial wellness, Qualified Plan Advisors found in its annual wellness report.

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Most employees are not on track to meet their retirement goals, motivating them to improve their understanding of retirement readiness, fundamental investment strategies and other financial wellness topics, according to Qualified Plan Advisors’ second annual Financial Wellness Report.

The statistics, while alarming, align with much of the retirement industry’s recent push to provide financial wellness programs and resources to employees alongside 401(k)s and other savings programs. Such resources and tools would also go toward overall mental wellness for employees who are stressed about financial topics ranging from budgeting to retirement security, according to the advisory.

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“Employees are actively looking to their employers for support to improve their financial well-being,” Makila Hennig, director of financial concierge at Prime Capital Investment Advisors, which provides product and advisory services for QPA, said in a statement. “Employers need to answer the call and take action to help minimize the financial stress felt by their employees. Financial wellness programs have shown to increase employee satisfaction and productivity, while creating a culture of support.”

Retirement Readiness

When surveying an employee pool across about 75 organizations, QPA found that 72% find themselves off course in achieving their retirement objectives, have yet to establish a retirement goal, or possess a goal but are uncertain about their progress.

Among respondents, just 19.04% feel they are on track to meet their retirement goals. This group represented individuals who have set objectives but are struggling to make progress.

Another 34.83% of employees admitted they have not set any retirement goals at all. Additionally, 18.42% of employees said they set a retirement goal, but do not know how to track their progress.

Meanwhile, just 27.71% of employees have well-defined retirement goals and are confident in their retirement futures, leaving plenty of room for support.

Overall, men fared slightly better than women when it came to planning, with 64% of men saying they are not on track for retirement, compared to 77% of women.

When it comes to age, younger workers were much more skeptical than those closer to retirement, with 80% of individuals under 30 saying they are not on track, followed closely by 82% of those aged 30 to 45. For the 45 to 60 age group, that percentage dropped to 66%, and for those over 60, it further decreased to 55%.

The consequences of financial stress also affect various other aspects of employees’ lives, perhaps exacerbating overall confidence levels, according to QPA.

Mental health issues and sleep problems top the list, each affecting 31% of workers. Debt is also a common burden, with 80% of employees carrying some form of it. The most prevalent types of debt include mortgages, credit cards, and student loans.

Financial Education Needs and Interests

Aligned with the statistics indicating deficiencies in retirement preparedness, investment acumen, and financial readiness, employees have pronounced interest to expand their knowledge concerning retirement readiness, foundational investment principles, and estate planning.

Employee’s interests vary, but include:

  • Budgeting: 31%
  • Retirement readiness: 22%
  • Investing basics: 20%
  • Estate planning: 16%
  • Debt management: 11%
  • Emergency savings: 8%
  • Insurance coverage: 7%
  • Credit score: 4%

When it comes to these areas of interest, there is a strong belief among employees that their employers should play a role in their financial well-being, with more than 70% of employees express agreement or strong agreement regarding the importance of employers assisting them in achieving financial well-being.

Furthermore, 70% of employees prioritize job opportunities that include a financial wellness program within their benefits package, while 65% of employees consider financial wellness programs an essential factor when choosing a job.

QPA’s survey was delivered to participating clients from March 4 to March 31, 2024. It tracks the financial IQ and wellness of 646 employees within 76 organizations.

Deals & People May 20, 2024

Advisory M&A News – 5/20/24

Blue Ridge Associates acquires TSC 401K; Alerus Financial Corporation and HMN Financial announce strategic transaction; Bluespring Wealth Partners acquires KDI Wealth Management; and more.

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Blue Ridge Associates Acquires TSC 401K

Blue Ridge Associates, a provider of administration and compliance solutions for employer-sponsored ESOP and qualified retirement plan benefits, announced that it has acquired Tax Sheltered Compensation, Inc.

“After an exhaustive search process, in addition to checking all the boxes, the complimentary fit between ESOP and qualified retirement savings plans made Blue Ridge the obvious choice for TSC,” Matt Slyter, president of TSC, said in a statement.

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Established in 1966, TSC now serves 3,100 plans covering over 152,000 participants across the small and middle-market business community. The addition of TSC will expand Blue Ridge’s service offering and geographical coverage.

“Our strategy has long been to create complimentary, market leading, people first businesses that leverage technology to enable our clients to provide wealth building benefits to their employees with peace of mind,” Bill Yoerger, CEO of Blue Ridge, said in a statement. 

Alerus Financial Corporation and HMN Financial Announce Strategic Transaction

Alerus Financial Corporation and HMN Financial Inc. jointly announced the signing of a definitive agreement and plan of merger pursuant to which Alerus will acquire, in an all-stock merger, HMNF, a savings and loan holding company headquartered in Rochester, Minnesota, and the parent company of Home Federal Savings Bank.

Under the terms of the merger agreement, HMNF will merge with and into Alerus and Home Federal will merge with and into Alerus’ wholly-owned bank subsidiary, Alerus Financial, National Association, in a transaction valued at approximately $116.4 million.

The merger represents the twenty-sixth acquisition for Alerus since 2000 as part of its long-term plan to continually expand its business segments, including banking, wealth services and retirement and benefits plans and services.

Upon completion of the merger, the combined company will have approximately $5.5 billion in total assets, $3.7 billion in total loans and $4.3 billion in total deposits, assets under administration and management of approximately $43.1 billion, with 29 locations across the Midwest, as well as Arizona.

Bluespring Wealth Partners Acquires KDI Wealth Management

Bluespring Wealth Partners, a leading acquirer of both independent RIAs and hybrid wealth management firms, announced their acquisition of KDI Wealth Management, a wealth management firm based in Scottsdale, Arizona.

KDI personnel currently oversee more than $750 million in client assets. The firm is run by husband-and-wife duo Kevin Dick, CEO and wealth adviser, and Carrie Dick, president and wealth adviser, alongside longtime business partner Shane Keith, vice president and wealth adviser. The firm was founded in 2005 and consists of 14 total employees.

The KDI team offers a full suite of services, including wealth and retirement planning, estate planning, cash flow management, tax planning and more. Bluespring will offer KDI streamlined solutions to outsource non-revenue generating tasks.

“Bluespring’s dedication to fostering entrepreneurship deeply resonated with us,” KDI CEO Kevin Dick, said in a statement. “We’re excited to have a partner that respects our vision for the business. With Bluespring we will be able to elevate our capabilities, expand our reach, and continue to deliver exceptional value to our clients.”

Avantax Acquires Integrated Tax & Wealth Strategies Wealth Management Business

Avantax Inc., a provider of tax-focused financial planning and wealth management, has acquired the wealth management business of Integrated Tax & Wealth Strategies, an independent wealth management firm with $760 million in total client assets, as of December 31.

Integrated Tax & Wealth Strategies’ founder Brian Stephens will continue with the tax practice. Integrated Tax & Wealth Management’s other financial advisers and wealth management team have become W-2 investment adviser representatives of Avantax Planning Partners.

“I’ve seen several other advisers align with Avantax Planning Partners, and while I looked at various options even outside of Avantax, I realized that other broker-dealers don’t understand our business model where tax preparation is such a key component of the investment relationship,” Stephens said in a statement. “I feel Avantax is the right answer because they are 100% aligned with my belief that the best solution for clients is to keep investment and tax preparation tied together.”

Stephens’ wealth team, including Matt Murch, Joseph Webster, Sabrina Pledger, Amy Villarreal, Kyle Pledger and Cheryl Wright, have joined Avantax as employees and will continue to support the relationships the team has built over the past 25 years.

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