“I get to literally just have a seat and chat with my friend,” LeafHouse Financial President Todd Kading said at the opening of a morning session last week at the firm’s National Retirement Symposium (LNRS) in Austin, Texas.
Referred to as a “Retire-side chat,” it featured Yaqub Ahmed, Franklin Templeton Senior Vice-President and Head of U.S. Investment-Only Division, and was titled “The Non-Negotiable Expectation: Addressing the Age of Personalization.
He began with a table-setting recap of recent Franklin Templeton research. It found that 87% of Americans say, “My finances are part of my overall wellbeing,” and 80% of American workers are looking for more financial resources to promote financial wellbeing.” Individuals also expect their financial management apps and programs to use what they know about them to suggest the most appropriate resources.
“What we found is that it’s not really about retirement or retirement planning, but rather financial independence,” Ahmed said.
He added that 20 years ago, he asked an advisor why he concentrated on the defined contribution space.
“He said, ‘Because I can help so many people,’” Ahmed explained. “A lightbulb went off; that’s it—that’s why we’re in business. We can help so many people with this one retirement tool. And now there’s a reframe from product-based to goals-based and personalization.
That personalization feeds what he said was the company’s “Core Belief about Workplace Solutions,” which states:
“We believe every U.S. worker and household has the right to a personalized experience and financial wellbeing throughout each phase of life. New technology and regulations represent an opportunity for breakthrough innovation which will allow us to deliver solutions aligned with our core beliefs. We can only bring these solutions to life with imagination, creativity, and collaboration.”
Ahmed further emphasized the case for collaboration and aggregation, arguing that the industry overall cares about driving better coverage and outcomes for “those who need it most. That takes a lot of collaboration and a lot of leverage.”
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Kading turned the conversation to financial wellness, and Ahmed said it’s almost more important than the 401k, but quality data and personalized conversations are needed to drive engagement.
“I can have a personalized Netflix experience, and it recently recommended ‘Virgin River,’” he said to laughter. “I was like, ‘What? No, I’m not into this Hallmark Channel stuff.’ But it was pretty good, and Netflix knew I would enjoy it. We still can’t get that level of personalization in the 401k today.”
Kading concluded by noting the industry’s mixed—or rather missed—messaging.
“It never made sense to me that we tell people to save 3% or whatever in a 401k when they don’t have enough to fix a flat tire,” he said. “We target advice and wellness to those who need it least, not that they shouldn’t get it, but it’s an issue.”