In just the past week, three companies of widely varying sizes introduced new products aimed at the retirement market, demonstrating the growing trends of personalized financial planning and providing capabilities (and pricing) previously reserved for larger 401k plans.
Innovation in the retirement industry continues to make strides in providing increased access to tools designed to educate and help plan participants start and stay on track toward personalized retirement goals.
Here’s a quick look at the new offerings from Charles Schwab, Rebalance and Security Benefit.
“Schwab Plan” means free digital planning for clients
Charles Schwab recently introduced free digital financial planning for clients seeking to establish and manage their personalized retirement goals.
The launch of Schwab Plan, available to all Schwab clients with no minimum asset requirement, significantly expands access to retirement planning to the millions of retail investors that Schwab serves.
With this move, Schwab says it is now the only large retail brokerage to offer complimentary financial planning to all clients, combined with no account minimums for individual investors, zero commission online equity, option and ETF trades, and a satisfaction guarantee.
“Saving and investing for retirement continues to be the most vital goal for investors of all ages, and a plan provides a path that helps people retire the way they want,” says Stephanie King, vice president of Charles Schwab’s planning and portfolio group. “Planning gives investors more confidence about reaching their goals, and it also helps them remain focused on things like saving, portfolio diversification, and staying the course—something that is especially important given this period of uncertainty we’re all in right now.”
Schwab Plan is a digital self-guided financial plan that helps investors build a personalized plan that includes a range of factors such as desired retirement age, retirement goals, Social Security expectations, portfolio risk profile and asset allocation, and various income sources.
To begin the process, clients complete a short questionnaire, and in about 15 minutes can generate a retirement plan that shows retirement goals and probability of funding those goals, a comparison of an individual’s current asset allocation to a recommended allocation based on plan inputs, and suggested next steps to get and stay on track.
“Our goal with Schwab Plan is to provide investors with a modern planning tool that is similar to what professionals use, but streamlined to make the experience easier and more accessible for people who want to get started planning on their own,” says Cynthia Loh, Charles Schwab vice president of digital advice.
In conjunction with the launch of Schwab Plan, Schwab has also created an online Financial Planning Hub that features an array of goals-based calculators, tools, and educational planning content to help investors get quick answers on topics such as retirement, saving for college, and buying a home.
“Better K” by Rebalance aimed at small biz
Bethesda, Md.-based investment firm Rebalance just announced the launch of Better K, a new 401k product designed to take the firm’s sophisticated, personalized approach to wealth management and apply it to retirement planning for small business owners and their employees.
Better K is unique in the marketplace, Rebalance says, because it provides each plan participant an investment strategy based on their own, personal needs instead of the traditional cookie-cutter approach to retirement planning.
“Our experience over the past decade of working with individual investors is the impetus for developing Better K,” says Rebalance Managing Director Mitchell Tuchman. “Time and time again, clients have come to us with 401k plans from previous employers that clearly weren’t developed with their best interest in mind. While many companies offer 401k plans to their employees, they provide no guidance or investment education. Employees are left to their own devices to select from a laundry list of investment options with no support from a professional financial planner or investment manager.”
Better K was developed by the Rebalance Investment Committee, the members of which have managed some of the most successful investment plans and endowments in the world: Professor Burton Malkiel, Dr. Charley Ellis and Jay Vivian.
Because Rebalance assumes the role as an investment advisor to the plan it also assumes most of the fiduciary responsibilities, thereby dramatically reducing a business owner’s liability exposure, the company says.
“Small businesses often get punished when it comes to options and fees associated with traditional 401k plans,” Tuchman continues, adding that Better K can reduce their annual 401k fees by up to 50%. “Not only that, at a time when more employers are getting sued over fiduciary issues related to their 401k plan, the added feature of greatly reduced legal risk to the business owner is a huge benefit.”
In partnership with EPIC Retirement Plan Services, Better K by Rebalance provides plan participants with 24/7 access to their accounts via mobile app, website, or multilingual telephone support.
Rebalance, headquartered in Palo Alto, Calif., and Bethesda, Md., currently manages over 600 clients with more than $750 million in financial assets.
Security Benefit rolls out new app, platform
Security Benefit Corporation has expanded its retirement plan service platform with a broad set of new digital enhancements, including its new “My Security Benefit” app and SmartChoice open architecture platform.
“While this has been a time when many companies have taken a step back or paused in the retirement space, we have been moving forward and upgrading our service capabilities to improve the experience and ease-of-use for retirement plan participants,” said Doug Wolff, senior vice president of Topeka, Kan.-based Security Benefit. “We believe our platform offers plan sponsors and financial professionals a powerful, flexible suite of solutions to help meet the challenges they face in today’s environment.”
Small plans in particular, the company says, may benefit from access to capabilities that have typically been available to larger companies. The app offers a number of features like estimating retirement income needs based on individual goals; tracking investment performance and updating investment allocations; analyzing different investment scenarios and their impact on retirement readiness; and a library of health and financial wellness articles and brief, online classes.
“We believe it is essential to address wellness for our customers in a broad, holistic sense,” noted Greg Kratz, Head of Mutual Fund Platforms at Security Benefit. “You can even link your fitness tracker to hit goals and earn rewards. We want customers to think about their overall well-being as they look to and through retirement.”
The new open architecture platform, SmartChoice, is aimed at providing the defined contribution market with greater investment choice and flexibility. Financial professionals can customize fund lineups for retirement plans, choose from various levels of fiduciary support, and set their own fee structure to service those plans. The platform also allows the option of choosing a bundled fiduciary services package or integrating an advisor’s own fiduciary services into the new platform.
“The combination of these toolsets provide independent representatives the ability to add value and expand their relationships with plan sponsors and their clients,” Wolff added.
SEE ALSO:
- Transamerica Launches HSA Product Offering
- Lincoln Rolls Out ‘Next-Generation’ 401k Auto Feature: Auto Income
- New Platform ‘Democratizes’ Custom Target Date Funds
- New 401k RFP Dashboard Aims to ‘Empower Advisory Firms’
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
