Many Providers Are Prioritizing Participant Financial Advice in 2023

Advisory shops and providers are launching new workplace programs, updating others and sometimes bypassing the plan sponsor altogether to reach participants.

This week, SageView Advisory Group clients are starting to use its recently announced PersonalSAGE financial education platform. Voya is working on upgrades to its myVoyage financial platform. Managed account and advice provider GuidedChoice launched a retirement planning service that bypasses plan sponsors, and on Thursday an upstart called BrightPlan began offering employers an artificial intelligence-guided financial wellness tool that aggregates and implements employee data.

Most plan sponsors are offering financial planning, budgeting, and health savings accounts in their benefits packages, according to research conducted in late 2022 by the Defined Contribution Institutional Investment Association. That survey found that 77% of plan sponsors offer financial planning help to participants, 11% plan to add it, and 9% are undecided. When you ask Kerry Woods, SageView’s new hire to oversee participant engagement and education, has even loftier goals for her firm’s new PersonalSAGE wellness solution.

“I’d like to see 100% of people engaging with it in some shape or form,” she says.

A Personal Mission

Of course, having plan sponsor clients offer participants financial literacy tools does not mean everyone will use them. Woods, who joined SageView in October 2022 after roles at Voya Financial and Empower Retirement, knows half the challenge of such tools is to make them engaging and useful for the end users. But as she spearheads the launch of PersonalSAGE to employers ranging in workforce size from a couple of hundred to more than 20,000, she has confidence that people will engage.

“I think if we can have at least one touchpoint from participants in the form of an education meeting, or one of the financial wellness webinars that we are doing monthly, that is what success looks like to me,” Wood says.

SageView’s new vice president grew up in the retirement industry, with a mother working for what is now Empower Retirement, based in Greenwood Village, Colorado.

The opportunity to join SageView to help further develop and then launch PersonalSAGE was a chance for Woods to get back to the participant side of the retirement industry and, she says, follow her passion for helping people learn about and manage their financial lives.

“I know that there’s no shortage of a need for education,” Woods says. “We’re not here to solve all of the world’s problems, but if we can help all of our participants just a little bit then that would be extremely meaningful.”

Woods says PersonalSAGE stands out because it seeks to drive people to better habits and outcomes through whatever format works for their needs. That could mean a participant attending a group-based educational meeting with an employer, calling in and speaking with a financial coach, or logging in and answering question to develop a mini-financial plan, Woods says.

Phase 2

Woods’ prior employer, Voya, launched a workplace benefits and financial offering, myVoyage, in September 2022. But the New York-based insurer, investment manager, and recordkeeper is already preparing upgrades to the tool, according to Andrew Frend, Voya senior vice president and head of strategy and analytics for employee benefits.

“We’ve brought a single engagement tool together that helps people from health plan, dental, vision, supplement health, retirement, HSA, and emergency savings, and it optimizes those choices holistically,” Frend says. “It is the first tool of its kind that brings together guidance around benefits and retirement.”

Frend says myVoyage Version 1 has been rolled out to tens of thousands of participants with the goal of helping them optimize all their various financial and wellness variables to best meet their goals. Now his team is working on Phase 2 of the offering for enhancements later this year. That will include upgrades to the user experience of the financial wellness tool, as well as adding potential new variables for users, such as inputting charitable-giving goals, Frend says.

The firm is also deepening integration with human-resource firms and just recently completed an acquisition of Benefitfocus Inc., a benefits administration technology company. Much of the work, Frend says, is being assisted by a team of Massachusetts Institute of Technology  experts in optimizing data sets for best results.

“We don’t consider financial wellness a product; we consider it an outcome,” Frend says. “When I think about financial wellness, I think about how we can show a sponsor that by working with Voya their people are better off … We will help them retire on time, be more productive, have better savings, make better choices across product solutions, and roll it all up and quantitatively say, “‘People are better off because of Voya.’”

Straight to the Participant

Voya and SageView, of course, are just examples of the many advisory firms, recordkeepers and third-party vendors offering participant financial wellness tools and solutions.

This week, Principal Financial Group filed an investment adviser disclosure to the Securities and Exchange Commission noting an expansion of Principal’s in-plan advice offerings to include personalized, one-on-one retirement consultations with participants. A designated call-center team “can help participants with specific and actionable in-plan advice regarding how much to contribute to the plan, the funds they should select, and whether to enroll in the plan’s managed account service,” the company said in an emailed statement. “It is available to all participants within plans that have elected this service.”

In 2021, Empower launched a new website to give participants personalized financial planning technology from Personal Capital, a registered investment adviser and wealth manager the firm acquired in 2020. Last month, the firm announced that Carol Waddell, formerly head of the retirement solutions group, will be heading a new individual investor unit called Empower Personal Wealth. The unit will integrate existing Empower customers as well as those from Personal Capital to “transform the financial lives” of participants, the company said in the announcement. 

Meanwhile, some providers that used to work through plan sponsors to get to the participant are looking to go right past the employer to reach participants. A Reno, Nevada-based firm called GuidedChoice announced Tuesday a solution that allows participants from multiple retirement plans to receive advice directly.

“The retirement market can be segmented between those planning for retirement and those nearing or in retirement,” Jim Grabot, GuidedChoice vice president, said in an emailed response. “GuidedChoice serves both segments, while most in-plan services focus solely on those planning for retirement. … Given the closed architecture, consumers don’t always have the best options. This provides another option.” 

GuidedChoice is available to participants for an annual fee of $299 and will be offered through a combination of recordkeepers, advisers, employers and consumers, Grabot says.

Other organizations, like financial wellness provider BrightPlan, are offering to leverage data from the employees themselves to help employers shape their benefit programs. The San Jose, California-based firm announced Thursday a tool that will provide real-time insights for employers and HR leaders through anonymized, aggregated employee financial data.

The firm says that as employees engage with its app, BrightPlan’s AI-driven financial wellness coach will assign each employee a score. That score helps deliver personalized advice on aspects of personal finance, including spending and budgeting; retirement and goals-based planning; investments; estate planning; and insurance needs. It also, however, rolls up into a wider employer score and measurement, which the company can use to cater benefits, according to the firm.

More to Come

If the start of 2023 is any sign, more offerings are sure to come this year. Woods of Newport Beach, California-based SageView notes that her firm’s timing of launch has fit conveniently with the recent passage of the  SECURE 2.0 Act of 2022. She sees the increased adoption of auto-enrollment features and auto-escalation in retirement plans as differentiators.

“I think that, as a society, we have a responsibility to do a better job of educating ourselves; educating our children,” Woods says. “When I was in high school, I learned how to write a check; that was the extent of my financial knowledge. I didn’t have a lot of financial background until I joined the industry. … The more we can automate processes for people and drive people toward making decisions easier, I think it’s a win for everybody.”