As I tell my teenage children daily, actions speak louder than words. In the retirement services ecosystem, we hear and read a lot about how advisors are seeking to build a bridge between retirement and wealth. Still, it often feels like a bridge to nowhere.
The connection cannot be made if employers and service providers are not taking meaningful action. In the contemporary landscape of advisory relationships to workplace retirement plans, the paradigm is shifting from a singular focus on retirement planning toward a more comprehensive approach centered around holistic financial planning and advice. This evolution underscores the necessity for financial advisors and their clients to transcend traditional roles and embrace a holistic strategy tailored to the dynamics of modern organizations.
This is not a new concept. In my nearly 25 years in the workplace savings industry, most of those years as a client-facing salesperson or sales leader, a vast majority of advisors specializing in the retirement space were drawn to the segment in the interest of being able to efficiently reach and help more people. The one-on-one enrollment and education meetings were a differentiator for leading advisors willing to invest the time and resources to help ensure the participants under their care were well-positioned for a positive retirement outcome. Enroll in the plan, save more, diversify, and stay the course were many of the themes, and the strategy worked, contrary to a lot of naysayers. But it took hard work, and a lot of it.
Following the Pension Protection Act (2006), we became complacent when auto-everything entered the conversation. As an industry, we convinced ourselves—and it is hard to refute—that auto-everything and defaulting participants to save is the most effective way to help people. Add in the “three F” (fees, funds, fiduciary) movement and the global financial crisis in 2008, and the value proposition of the advisor shifted to protecting the plan sponsor in an ever-increasing litigious society. It was deemed taboo for advisors to engage with participants to avoid the optics of trying to “sell” other services. While we were finding our fiduciary identity as an industry, we forgot about a very important constituent we serve every day: the participant.
What happened to our mission of helping more people?
The win-win
“In the long run, if it isn’t a win for both of us, we both lose.”1
We believe the industry may be entering a period of truly realizing a win-win solution. We’re seeing early signs of the pendulum swinging back to focus on the participant—the American worker who primarily saves through their workplace retirement plan—which is likely their largest single asset. These hard-working Americans are busy, but they need—and want—help.
So, what is the answer? It is the same as it was 25 years ago, but with a modern twist. Employers may want to leverage trusted financial professionals to help employees in their financial journey. Today, financial professionals can help more people, efficiently and at scale, by leveraging technology and doing it through workplace relationships.
This combination of effort has the potential to deliver the highest level of access to advice for everyday workers. In addition, we have a retiring boomer population with more than 10,000 people turning 65 every day–that’s 3,650,000 per year.2 The boomers turning 65 now represent the population that amassed their entire retirement nest egg through a 401(k) plan, and a new generation of digital natives that prefer to interact with their finances on their smartphones.
This is an opportunity for advisors. Rather than confining themselves to the narrow scope of advising employers on their retirement benefits (i.e. workplace savings plan), or solely being a wealth advisor to individuals, financial professionals may adopt a broader strategy that encompasses the entirety of an individual’s financial journey within the workplace ecosystem. This strategic pivot is not only pragmatic but imperative in navigating the complexities of today’s employee/employer relationship. We firmly believe the workplace has become the financial epicenter for MOST (not all) working Americans.
Embracing a workplace strategy offers a variety of advantages, including the opportunity to extend financial guidance to a larger demographic. Collaborating with employers affords advisors access to a vast pool of employees, enabling them to provide invaluable assistance in areas such as saving for retirement, college and healthcare costs to name a few, as well as holistic financial planning, investment optimization and, of course, retirement planning.
The trust factor
An endorsement from an employer provokes a heightened level of trust among participants. Employees might not always like their employers, but they seem to trust their employers. In a world where almost nothing is private or sacred anymore (politics, religion, real estate values and how much one made investing in crypto are now common cocktail party conversations), and overall trust in society is at an all-time low, the employer still holds the most sensitive data on its employees: income, health, dependents and Social Security numbers.
According to our 2024 Voice of the American Workplace study,3 participants identified tools and resources employers could provide to help them navigate financial uncertainty. Among the most sought-after resources is access to advice and a financial professional, second only to auto enrollment.4
This symbiotic relationship between financial advisors, employers and employees generates the potential for a mutually beneficial dynamic where all parties stand to gain from the alliance.
This is a win-win-win
- Employees: Receive the financial guidance they desire and need
- Employers: Foster a happier, productive and loyal workforce to retain talent
- Advisors: Help more people and grow their client base in a responsible and we believe, noble way
Intangible benefits
In addition to tangible benefits, the synergy between financial advisors and employers yields intangible dividends in the form of enhanced brand visibility and reputation. Through active participation in corporate events and educational initiatives, both advisors and employers can position themselves as thought leaders, amplifying their influence and market presence.
The strategic alignment with workplace dynamics represents a practical course of action for financial advisors seeking to expand their client base, employers attempting to attract and retain talent and most importantly, individuals who desire and need financial planning assistance.
By embracing this holistic approach, we believe advisors, employers and individuals can navigate the evolving landscape of financial services in the workplace with confidence and agility, thereby cementing their status as indispensable partners, highly-regarded employers and happy, productive individuals on the right financial track to reach the point of financial independence.
Call to action
Times are changing and industry trends lean toward simplification.
Wealth advisors no longer need to navigate the complexities of ERISA and fiduciary duties to serve workplace clients. They just need to do what they do best—build and expand their relationships with business owners and executives. The private sector has created packaged solutions, making it easy, with complete outsourcing of literally every function. Business owners and advisors can now efficiently establish and maintain a plan. You don’t have to be a 401(k) expert anymore. In reality, you don’t even have to know how to spell 401(k).
We outline some key actions to consider in the sections below.
Unite and succeed
Retirement advisors don’t need to be wealth managers either. They can partner, acquire or build their own capabilities. This isn’t about traditional wealth management; we’re talking about simplified financial coaching and planning for the vast majority of the population—the 99 percenters.
An integrated approach
If you are an advisor with a practice that encompasses retirement, wealth management, employee benefits or even property and casualty insurance, you are in a great position. The workplace is the key to reaching more people, and you’ve already broken through the trust barrier by winning over the employer.
Attention employers!
The labor market remains tight, and the talent war continues. It is a significant burden and cost for employers to lose employees and subsequently replace them. Providing valuable programs that emphasize engagement and deliver personalized recommendations can be a major differentiator for employers, helping them attract and retain top talent. Talk to your trusted advisors and ask for help.
Attention advisors!
Examine your existing client base and identify your primary centers of influence. Business owners, corporate executives, leaders of non-profit organizations, CPAs, attorneys, employee benefits brokers and consultants are all great contacts. Connect with them to discuss how you can help employers potentially reduce their benefits spending and build a productive, loyal and happy employee base.
Attention US workers!
Ask your employer for holistic financial planning tools and access as a part of your benefits. These solutions exist today.
For additional information, please contact the Franklin Templeton Retirement Sales Department at (800) 530-2432.
The Voice of the American Employer Survey was conducted by The Harris Poll on behalf of Franklin Templeton from November 6th to November 17th, 2023. All 1,000 respondents, based in the United States, are classified as employers, defined as having at least some influence over company benefits and/or hiring at organizations with over 100 employees. Respondents represent a mix of industries, company size, role, age, and race.
This presentation also references a qualitative study conducted by The Harris Poll on behalf of Franklin Templeton from August 15th to August 25th, 2023, among 15 American employers. All interviewees were full-time employees working in human resources, who have influence over employee benefits, and included those with titles such as HR Manager, HR Director or HR Vice President, among others.
This was a blind study, as Franklin Templeton was not mentioned in order to avoid bias.
The Voice of the American Worker Survey was conducted by The Harris Poll on behalf of Franklin Templeton from November 9th to November 21st, 2023, among 2,001 employed US adults. All respondents had some form of retirement savings. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. Findings from 2020 reference a study of a similar nature that was conducted by The Harris Poll on behalf of Franklin Templeton from October 16 to 28, 2020, among 1,007 employed US adults, study from 2021 also references a similar survey conducted among 1,005 employed adults from October 28th to November 15th, and a study from 2022 also references a similar survey conducted among 1,000 employed adults from October 17th to October 27th.
Franklin Templeton is not affiliated with The Harris Poll, Harris Insights & Analytics, a Stagwell LLC Company.
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1. Source: The 7 Habits of Highly Effective People, Dr. Stephen R. Covey. January 1, 1989.
2. Source: US Department of Health and Human Services, 2022. https://www.hhs.gov/aging/index.html
3. Source: The Voice of the American Employer Survey was conducted by The Harris Poll on behalf of Franklin Templeton from November 6 to November 17, 2023. All 1,000 respondents, based in the United States, are classified as employers, defined as having at least some influence over company benefits and/or hiring at organizations with over 100 employees. Respondents represent a mix of industries, company size, role, age, and race. The Voice of the American Worker Survey was conducted by The Harris Poll on behalf of Franklin Templeton from November 9th to November 21, 2023, among 2,001 employed US adults. All respondents had some form of retirement savings. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. Findings from 2020 reference a study of a similar nature that was conducted by The Harris Poll on behalf of Franklin Templeton from October 16 to 28, 2020, among 1,007 employed US adults, study from 2021 also references a similar survey conducted among 1,005 employed adults from October 28 to November 15, and a study from 2022 also references a similar survey conducted among 1,000 employed adults from October 17 to October 27.
4. 2024 Voice of the American Workplace.
