Although long-rumored, Wells Fargo officially announced Wednesday that it will offer Financial Engines’ suite of retirement planning solutions to companies with 401(k) plans recordkept by Wells Fargo.
Financial Engines, co-founded in 1996 by Nobel Prize-winning economist Bill Sharpe or Sharpe Ratio fame, provides advisory services to retirement plan participants. Wells Fargo anticipates a release date of mid-2016, at which time retirement plan sponsors on the Wells Fargo recordkeeping platform can elect to add it to their retirement benefit plans to help participants “make the most out of their retirement savings.”
The new direct offering consists of Financial Engines’ suite of advisory services for 401(k)-type retirement plans, including:
- Professional Management – a discretionary personalized management service for participants who want to partner with or delegate the management of their retirement accounts to a professional;
- Online Advice – personalized online savings and investment advice and retirement income projections for investors who want to manage their retirement themselves;
- Income+ – a retirement income solution that provides steady and flexible income in retirement; and
- Income planning and Social Security claiming guidance through Financial Engines’ Social Security Planner.
Under the agreement, Financial Engines will serve as the advisor and plan fiduciary for the advisory services. All participants will have access to non-commissioned Investment Advisor Representatives, as well as ongoing personalized communication and education that assess their current retirement outlook and make suggestions for improvement.
“We know that people want help with many aspects of their 401(k) plans – this includes everything from how much to save and how to invest to how to make their money last once they have entered retirement,” Joe Ready, head of Wells Fargo Institutional Retirement and Trust, said in a statement. “This gives companies an independent option for offering that help to their employees wherever they are in their retirement journey.”
According to the Wells Fargo/Gallup Investor and Retirement Optimism Index for the first quarter of 2015, one in three investors in a 401(k) say they need advice from others. When asked which of five aspects of investing they most need advice on, 32% of 401(k) investors want help knowing which funds to invest in, and 29% want help knowing whether to reallocate their investments according to changing conditions.
“We are excited to be working with a trusted company like Wells Fargo to expand the availability of our independent advisory services to more plan sponsors and 401(k) participants,” added Lawrence Raffone, president and chief executive officer of Financial Engines. “Financial Engines’ sole focus is to provide high-quality, un-conflicted retirement advice and management. We look forward to working with Wells Fargo to help more Americans achieve the retirement security they deserve.”
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.
