Bridging the Gap in Financial Wellness

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Bridging the Gap in Financial Wellness | Cogent Reports

As financial wellness programs gain popularity, questions arise about how to design an effective program that works for the employee and the employer. It was just a few years ago that these programs began to emerge as an employee benefit designed to help employees struggling with aspects of managing household finances. While only 16% of all DC plan sponsors currently offer a financial wellness program, 38% are likely to consider such an offering in the near future. As many employers begin to recognize that a financially secure workforce is both more productive and more motivated, they are increasingly looking to offer their employees additional support with personal finances—but what does that mean when building out a financial wellness program?

As popularity grows, providers must keep the goals of plan sponsors and participants in mind when deciding what components to build into these nascent financial wellness offerings. The most common components of current financial wellness programs according to plan sponsors are online access and guidance on health savings accounts or HSAs. Contrast this with the employee perspective. When asked about which employer offering would be helpful when making decisions about household finances, plan participants cite online tools and access to a financial advisor or coach most often. Notably, plan participants prioritize credit score guidance and discounted bank accounts over HSA guidance, highlighting the focus on “here-and-now” household finances and not longer-term additional savings required to cover health costs during retirement. Continue reading

Participant Satisfaction: What Can DC Plan Providers Control?

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Investment performance. It is both the biggest driver and one of the biggest barriers of DC participants’ satisfaction with their plan provider. Of course, participants seeing positive rates of return on their quarterly statements are naturally going to be more satisfied than those seeing lower returns. But this can often be rather frustrating for providers, who have limited control over how well the underlying investment managers perform on their line-ups.

But performance isn’t everything and there are a number of key aspects of the DC Participant experience fully within provider control ―website and online capabilities, retirement planning tools, account statements and enrollment processes round out the top five drivers of DC provider satisfaction. Continue reading

Rollover IRA Choice Pivots on Brand Trust

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Brand Trust

When it comes to attracting rollover dollars, brand trust and provider consideration are becoming increasingly interconnected. When plan participants are asked why they would consider a specific firm for a rollover IRA, 35% select brand trust, far outweighing all other factors. Additionally, the aspect of trust grows more essential as participants age. Among the Silent Generation, 65% of participants cite “is a brand I trust” as a reason for selecting a rollover provider while only 30% of Millennials cite trust as a consideration factor. This increase in the importance of trust with age stresses the need for providers to foster relationships over time. Continue reading

Retaining DC Assets is Simple…Just Not Easy

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The Challenge: DC participant satisfaction is down—and it’s not your fault.

Overall, participants in defined contribution (DC) plans report lower satisfaction with their plan providers than they did a year ago. To better understand the reasons for this decline, we use a derived analysis in which we are able to assess the extent to which a set of distinct experience attributes impacts participant satisfaction. As we found in previous years, the biggest factor that enhances participant satisfaction continues to be investment performance. What is interesting, however, is that investment performance actually serves as a bigger detractor than an enhancer, meaning it hurts more than it helps. This may explain the decline in the overall satisfaction of DC participants this year, as our most recent data were collected during a time of substantial market turbulence. Continue reading

DC Plan Providers Leave Participants Wanting More

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In positive news for DC plan providers seeking to grow cross-sell business through in-house retirement plans: 3 in 4 (74%) plan participants are open to being contacted by their providers about additional financial services and products. However, current participant engagement with DC plan providers is relatively weak as it is largely limited to interaction with websites and quarterly account statements. With DC providers relying primarily on passive and administrative interaction with plan participants, they are leaving a significant portion of hot prospects untouched. Continue reading