Products May 3, 2011

Genworth Develops Portfolio Strategies

Genworth Financial Wealth Management is introducing Genworth Portfolio Solutions (GPS), providing advisers with four asset allocation models.
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GPS strategies incorporate a variety of asset allocation approaches, including strategic, tactical constrained, tactical unconstrained, and absolute return. Genworth Financial says it created GPS for advisers to offer clients more than just “stock-and-bond” diversification options, which are not always effective in times of market volatility.

Genworth says some of these approaches aim to capture the peaks of rising markets and others seek to help protect portfolios from volatility and mitigate downside risk. GPS combines approaches to create a unified strategy that is positioned for both up and down markets.

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Advisers will be able to mold the GPS strategies to each client’s investment objective, risk tolerance and the long-term market outlook to identify an investment mix suited to their individual goals. The minimum investment is $25,000.

“The idea is that the adviser can use a turnkey investment solution to deliver a fully diversified portfolio to a client regardless of size or situation,” said Mike Abelson, senior vice president of Investment & Product Management. “As always, advisers play the valued role of portfolio navigators, helping each client define goals and outlook, and determining the best course for moving toward their desired destination.”

Data & Research May 3, 2011

Benefits Education Lower in Importance to Employers

Though employees are expected to take on more decision-making and financial responsibility for their employee benefits, employee education and communications have become a much lower priority for employers.
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“Helping employees make better benefits decisions” and “addressing the diverse benefits needs of your employee population” are at the bottom of the list of objectives in terms of importance, with 35% and 28% of plan sponsors rating them as “highly important,” according to Prudential’s Fifth Annual Study of Employee Benefits: Today & Beyond. “Increasing employee education and/or advice” was the top-rated benefits strategy with 34% of plan sponsors rating it as “highly important” in 2007, while this year, it has fallen to fourth with 28%.

For “tailoring communication and enrollment,” 21% rate it as highly important this year, compared to 26% in 2007. In 2007, plan sponsors rated benefits education (34%) as a more important strategy than cost-sharing (19%) or giving more financial responsibility to employees (21%).  

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The study found few plan sponsors give their benefits communications/enrollment efforts high marks on overall effectiveness; only about one in five (23%) rate their communications as “highly effective.” This number has remained flat over the past few years. In 2007, 21% of plan sponsors thought that their benefits communications were “highly effective.” 

Targeted communications?

Plan sponsors remain cautious about targeting communications to specific employee segments. Just one in five companies are “very willing” to use select personal information about their employees (with their permission) so that benefits providers could more effectively tailor communications to better address employees’ and/or their families’ situations and needs. This is a decline from 2007, when one in four plan sponsors said they would be “very willing.”  

This year, 44% of plan sponsors “strongly agree” that they give their employees adequate time to make employee benefits decisions. This figure also has not moved in the past few years; in 2007, 45% of companies surveyed said they give their employees adequate time.  

In 2007, 35% of plan participants rated their benefits communication as “highly effective,” compared to 34% today. Plan participants who are among the least satisfied with their employers’ benefits communications (highest “neutral/not effective”ratings) tend to be male workers, those under age 35, and workers in the manufacturing industry.  

Most employees (68%) indicate that they tend toward the “little to no effort” end of the spectrum when it comes to benefits selection; 24% tend to just choose the same benefits and 44% read some information and possibly discuss options with a relative/friend, but in general don’t make many modifications from year to year.  

Reading benefits materials is the most commonly used resource when making benefits decisions by 78% of plan participants. Nearly one out of every two U.S. workers (47%) spends less than one hour in total researching, thinking about, and making decisions regarding employee benefits during their annual enrollment period. About one-third (34%) spend anywhere from one to two hours.

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