BofA Finds Advice Improves Financial Wellness

Its second quarter 401(k) Wellness Scorecard found employees in Bank of America Merrill Lynch’s Advice Access program earned their highest financial wellness scores since the firm began tracking them in 2009. The financial wellness scores of employees using Advice Access increased at a faster pace than did the scores of employees not using Advice Access. “These results suggest that a significant portion of Advice Access employees’ improvements in wellness could be attributed to the program itself, rather than to broader-based factors such as improvements in the overall economy,” the company said.

During the last 12 months, the number of employers using Advice Access in their plans increased by 13%.

Employees taking positive actions continue to outnumber those taking negative actions by a wide margin. The scorecard found that 80,337 employees started contributing in Q2 2013 and 71,042 participants increased their savings. Comparatively, 27,185 participants stopped contributing during the quarter and 29,555 decreased their savings amount.

In addition, Bank of America Merrill Lynch reported in the first six months of 2013, employers encouraged employees to save more through higher auto-enroll default rates. The number of plans that offer auto-enrollment with an above-average default contribution rate increased 27% in the first two quarters, compared with the same period a year ago. The number of employers adopting an automatic deferral increase for their plans jumped 26% year over year.

During the last year, the number of plan sponsors using auto-enrollment has increased by 16%, with the number of auto-enrolled participants increasing by 29%. During this period, only 10% of auto-enrolled employees opted out.