Whether or not financial wellness is effective depends on how it’s defined. For T. Rowe Price, it means achieving a balance between immediate needs and long-term savings initiatives, according to Rachel Weker, the firm’s vice president and group manager for technology and product development.
Her title is a fancy way of saying she’s responsible for innovation and “what comes next” at what’s arguably a pretty innovative firm, synonymous with target dates, glide paths and so many other terms now part of the routine industry lexicon.
So what does come next?
At the 401(k) Summit in Nashville on Monday, Weker mentions the aforementioned financial wellness program, and specifically points to the firm’s partnership with SmartDollar from consumer finance guru Dave Ramsey. In April, the Baltimore-based investing behemoth made the online financial wellness solution available to clients for integration into its “Retire With Confidence” program. Upon plan sponsor election, participants have access to SmartDollar’s online tools and interactive lessons designed to help them pursue a better path to retirement readiness.
“Look at the traditional industry markers of plan health and 401(k) plan success,” Weker adds. “First it was adoption and enrollment rates, then it was deferral rates and how much participants were saving and then it was retirement income. Any of those three might be important to plan sponsors, but they might also want to hire and retain good employees. So we can’t have one, monolithic way to define success, it will be different for everyone, and we need to realize that.”
Noting that “auto-everything” is great until the participant has an emergency, she argues that participants need more foundational support in 401(k) education.
T. Rowe Price’s Retire With Confidence program was introduced in 2012 as part of an already established solution to retirement preparedness, and includes an Online Learning Center, webinars, one-on-one consultations, and personalized check-ins. The program is designed to increase participant engagement and help them understand actions that can lead to more positive outcomes. With the integration of the SmartDollar program, participants will benefit from additional educational components with a highly engaging multimedia experience to help them manage their personal finances. Key features of the SmartDollar program for plan sponsors and their participants include:
- On-demand video lessons, educational materials and coaching
- Regular communication to encourage participants to take action
- Easy integration into T. Rowe Price’s Retire With Confidence participant experience
- Aggregate reporting, enabling plan sponsors to track progress
When offered in tandem with an employer-sponsored qualified retirement plan optimizing best practices in automated plan design, a financial wellness program, like SmartDollar, “can help employees address emergency savings, debt elimination and budgeting and build a firmer, financial footing that could ultimately result in more successful retirement savers.”
SmartDollar is currently offered to more than 1 million eligible participants.
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.
