Simple and easy—keys to success in 401(k) saving and critical to getting more Americans enrolled at a younger age.
Add one more ingredient, low cost, and you’ve really got something, or rather, Monte Malhotra and Money Intelligence really have something.
It’s right there in their tagline, “401(k) made easy.”
The hybrid automated/advisor retirement platform provider believes there shouldn’t be any reason employees can’t save, and they’re removing traditional biases and barriers to help.
“Our vision is to get retirement plans in the hands of as many companies as we can, and then indirectly, as many employees as we can,” Malhotra says.
Money Intelligence recently joined with fintech fellow-traveler EvoShare to offer the latter’s credit card cash-back program on its platform, furthering what Malhotra claims is a “paradigm shift” in the tools and techniques used to positively influence participant behavior (more on the collaboration in the upcoming issue).
He sat with 401(k) Specialist to discuss the current state of retirement saving, what Money Intelligence (truly) does differently and what it means—by default—for traditional providers in the space.
Q: We’ll cut to the chase, how do we get more people enrolled in retirement plans?
A: Our vision really centers on two or three key aspects.
It’s making it cost-effective and hassle-free for every small business in America to be able to afford to offer a retirement plan without taking on a huge administrative burden.
Once we make it cost effective for a company and we take all the work off their plate, it allows us to spend our time designing a great plan for employees.
How do we actually make employees successful? It’s giving them the financial advice and guidance they need, and it starts with what traditional robo advisors do, which is the risk allocation, the contribution amount, and whether they should they be contributing to a Roth or pre-tax.
But we’re taking it much further, because we think great financial advisors proactively recommend things to you. If you’re off track, let’s have a conversation about the two or three big levers we can pull and help you quantify that, so that you know we can get you there.
That’s what we’re really focused on; let’s make 401(k) plans hassle-free and cost-effective for companies, and let’s give employees the financial advice that they need to be successful.
Q: When you talk about giving employees the financial advice they deserve, are you talking about financial wellness or are you talking about one-on-one sessions?
A: There are some companies in our space that moved towards offering this hybrid approach, which has really been a core focus for us from day one.
We offer advice through our platforms—everything from the risk allocation you should have to the contribution amount and the type of account.
I think it then goes a step further. If you’re off-track, can you take more risk, can we contribute more money, can we shift between pre-tax and Roth?
Let’s help you quantify the impact these have, and then have a conversation about it. You can then speak with an advisor on our team, or if this is an advisor-driven plan, let’s get you in the hands of that advisor so they can add their value and have that conversation.
Whether you’re working with an advisor or if we’re offering those advisory services, let’s actually have the people and the service providers add real value to your plan.
Q: How do you make use of technology, and specifically digital technology, in order to get them to act?
A: So, No. 1, all of that is built into our website, and off to the side we’ll have—for instance—our key recommendations for retirement. But every month, we’re e-mailing them a summary of their account, and we’re including our top recommendations for the employee in that email.
There’s a lot of inertia in 401(k) plans where people set things and they never come back, an that’s true with any provider.
I think what we’re trying to say is, let’s at least make you aware of the fact that you’re not in an optimal account and let’s catalyze those conversations. That’s where we’re adding a lot more value.
Also, a lot of financial education and things in a normal 401(k) are linked off to the side. There are calculators and links that require you to add all these inputs, and there’s as a huge drop off in terms of people that actually complete it.
With us, you can’t set your investment selection and you can’t set your contribution amount without seeing our recommendation. It’s embedded in the workflow.
They can still tweak it and we’re never forcing them to go with something that we recommend, but we definitely have a lot of influence in terms of what they end up choosing. We make it really simple for them to enroll with this education and information right in front of them as they’re making those decisions.
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.
