“The battle for the participant, and in particular participant data, is not so much about the quantitative information because the recordkeepers have that, but it’s the qualitative data,” Greg Ward said in an interview at the Wealth@wor(k) conference in Nashville on Tuesday.
Ward, head of the Financial Wellness Think Tank at Financial Finesse, explained that qualitative information will change participant outcomes, adding that the desire to help participants achieve retirement is undoubtedly there, and he increasingly hears financial professionals refer to participants as employees. It’s a slight semantic change to reflect a broader perspective beyond just helping them with retirement.
“EBRI research finds participants want help with their financial stress; they want financial coaching and they believe their employers have a responsibility to help them make good decisions,” he said.
“When a participant says, ‘financial planning,’ they just want guidance on taking that next step, not the massive financial plan that lacks accountability.”
Greg Ward
Referencing the Edelman Trust Barometer, he said financial services as an industry is moving in the wrong direction, and trust continues to decline.
“Yet, at the same time, corporate America is seen favorably, so if the advisor can align themselves with the plan sponsor and have that be the way participants see them, they gain that credibility.”
Technology is key and critically important for scale and leverage. While it’s altruistic to want to do a financial plan for every participant, it’s not sustainable.
“Let’s face it, 1% of the [industry] population is wealth management, and 99% are financial planners. Out of that 99%, how many of them do the full 300-page financial plan?” he rhetorically asked. “Very few. When a participant says, ‘financial planning,’ they just want guidance on taking that next step, not the massive financial plan that lacks accountability.”
It’s why Financial Finesse routinely discusses intention versus action; the purpose might be real, but rarely is the follow-through.
“That’s what Aimee is doing,” he concluded, mentioning the firm’s groundbreaking artificial intelligence platform that positively influences financial behavior and decision-making. “It helps employees reengage and drips on them, but it’s a personalized drip. It’s moving the needle, and people go back to it because they’re not threatened by it. Since it comes from the employer, they’re moving from skepticism of the financial services industry to, ‘my employer genuinely cares about me because they’re paying for this benefit.’”
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.
