Financial Engines, the mega-RIA founded by Nobel laureate Bill Sharpe (pictured), said it will make its advisors available to its individual 401(k) participants. The announcement addresses a vexing and long-standing industry problem; namely, how to cost-effectively provide customized financial advice for plan participants.
Previously, access to the company’s advisors was a feature for those enrolled in the Financial Engines managed account program. Participants can reach advisors via phone, webcam and live chat. Advisors are non-commissioned and do not sell investment products.
“We’ve found that many 401(k) participants value the ability to talk with a financial professional, and that has informed our hybrid strategy that combines technology-enabled advice with a human touch,” explained Kelly O’Donnell, a Financial Engines executive vice president, in a statement. “Plan sponsors want their participants to have access to conflict-free advisors. This enhancement makes broader access to our advisors official so that more people – regardless of account balance and at no cost to them — can get the independent help they need.”
Financial Engines’ advisors can talk with participants about their specific situations, including analysis of their retirement plan and outside accounts, savings rate recommendations, and assistance with Social Security claiming strategies. In addition, they can help participants with a variety of other topics that can impact a participant’s financial wellbeing, including:
- How to respond to market volatility
- How to use target date funds appropriately
- Other financial wellness topics, including budgeting, creating a rainy day fund and deciding between Roth vs. traditional IRA program.
“Over the last 20 years, Financial Engines has leveraged technology to make high-quality investment advice available to all retirement investors,” said O’Donnell. “We’re now using technology to democratize access to experienced, independent advisors, which will help more people get on the right track and have greater confidence in their retirement and financial plans.”
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With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
