Edelman Financial Engines announced today it has teamed up with Principal Financial Group with a new program to offer personalized retirement advice and financial wellbeing guidance to select large employers on its recordkeeping platform.
The relationship, which launched last month, adds to robust wellness offerings from Des Moines, Iowa-based Principal by providing access to Santa Clara, Calif.-based Edelman Financial Engines’ national network of financial planners, for in-person and virtual advice in addition to a broad array of financial education tools and online advice.
A recent Edelman Financial Engines survey found that 84% of workers would value a financial advice benefit from their employer. The relationship addresses this growing demand by complementing existing offerings through Principal to provide personalized retirement advice as well as guidance on day-to-day budgeting, debt management and dozens of other financial topics that affect long-term financial security. All advice will be offered by Edelman Financial Engines without conflict from product sales or commission-paid advisors.
“We’re honored to support over 10 million American workers on a journey towards greater financial wellbeing and retirement readiness,” said Kelly O’Donnell, Executive Vice President at Edelman Financial Engines and head of the firm’s workplace business. “Alongside Principal, a leader in providing best-in-class recordkeeping and wellness solutions, we have a great opportunity to further expand access to high-quality, independent financial help to more employers and their employees.”
Principal is a top three defined contribution recordkeeper and a leader in the industry, serving more than seven million retirement plan participants and individual clients. Edelman bills itself as “America’s top independent financial planning and investment advisor,” with 150+ offices across the country and managing more than $270 billion in assets for over 1.2 million clients.
“Employers are continuing to search for solutions that help improve financial wellbeing for their workers and guide them in retirement planning,” said Jerry Patterson, senior vice president, Retirement and Income Solutions at Principal. “By utilizing Edelman Financial Engines services we’re able to help employers provide additional advice, educational resources and support, particularly during such a pivotal time in their employees’ financial planning.”
Principal sharpens focus on retirement market
In late June, Principal announced results of a strategic review of the company’s business mix and capital management options that was undertaken as a part of a cooperation agreement with one of Principal’s largest investors, Elliott Investment Management, L.P.
As a result of the review, Principal announced it would discontinue sales of all U.S. retail fixed annuities and consumer life insurance products along with new initiatives to focus on its higher-growth retirement, global asset management and U.S. benefits and protection businesses in an effort to make it “a more capital-efficient company” and generate long-term value for shareholders.
Principal will continue selling its variable annuity offering, which plays an important role within its complete suite of retirement solutions.
“This thorough and intensive review considered strategic fit, client needs, financial impact, and the risk profile of our business lines. The outcome will result in a more focused portfolio and stronger capital management strategy that we believe positions Principal for strengthened leadership in higher growth markets and greater capital efficiency, leading to higher expected shareholder returns,” said Dan Houston, chairman, president, and CEO of Principal, in a June 28 statement.
Houston also announced a new $1.2 billion share repurchase authorization, which he said underscores the company’s commitment to return excess capital to shareholders.
“We appreciate the constructive dialogue and the company’s demonstrated commitment to build a less capital-intensive business and to focus on its higher-growth target markets,” said Mark Cicirelli, U.S. Head of Insurance for Elliott. “We believe Principal’s refined focus will result in substantial returns of capital to investors and that the implementation of today’s decisions will leave Principal better positioned to leverage its quality franchise and create significant additional value for both its shareholders and its customers.”
Finally, Principal announced July 6 that Shawn Johnson, formerly Chief Information Officer of Empower Retirement, is joining the company as its new CIO of Retirement and Income Solutions.
“Shawn brings a wealth of digital and IT experience to Principal that’s critical in ensuring our Retirement and Income Solutions business is on the leading edge of recordkeeping technology and digitization,” said Renee Schaaf, president of Principal Retirement and Income Solutions. “Shawn’s hands-on experience in technology modernization and digital transformation within the retirement recordkeeping industry will be invaluable as we continue strengthening our top-tier provider status.”
In his role, Johnson’s responsibility for the technology and digital strategies for the Retirement and Income Solutions business will continue to evolve the company’s retirement savings and analysis platforms for small, medium, and large plan sponsors as well as participants.
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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.
