Products November 7, 2019

Fidelity Tool Helps Drive Total Employee Well-Being

The Fidelity Total Well-Being solution leads employees to resources in which employers have in invested and offers answers to benefits strategy questions.

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Fidelity Investments announced the availability of the Fidelity Total Well-Being solution, a tool that allows employers to optimize their benefits platform by providing a detailed analysis of employee benefit needs across the four domains of well-being: health, money, work and life.

While other solutions focus on diagnostics and recommendations to address individual silos such as financial wellness or physical and emotional wellness, Fidelity says its holistic approach provides employers with a deeper understanding of the needs and challenges facing their workers in all aspects of their lives.

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Pearce Weaver, senior vice president with Fidelity Workplace Consulting, tells PLANSPONSOR, “One of the biggest drivers for creating this tool have been meetings with some of our larger clients, initially discussing financial wellness. But, clients kept saying, ‘That’s great but we’ve been collecting all these programs and point solutions and resources to cover a much broader array of wellness.’” Weaver says clients were struggling to connect employees with different resources in a way that is timely and relevant to them. Clients told Fidelity if it could measure overall well-being of employees it would help to direct employees to more relevant resources.

According to Weaver, though the solution tends to fit larger employers with more complex benefits programs, the Total Well-Being solution is available to clients of any size.

The new solution enables employers to tailor a workplace benefits and communications strategy that will have the greatest impact to employees, contribute to increased benefits engagement and support desired business objectives. The solution helps employers in three critical benefits management activities:

  • Quantify employee well-being and identify and prioritize opportunities to improve;
  • Evaluate the impact and potential of specific benefit plans and programs; and
  • Connect employees with employer-provided benefits that can best improve their well-being.

The Total Well-Being solution consists of three key components:

  • Employee Total Well-Being Assessment: Consists of a 10- to 15-minute survey for employees that provides insight to factors that contribute to, or detract from, their well-being. Developed with leading academic institutions, the assessment can help determine where an employee’s benefits needs may be unmet.
  • Personalized Employee Action Plan: Provides each employee with real-time individual Total Well-Being scores along with suggested benefits to consider that may help to improve their well-being. Weaver explains that when Fidelity fully customizes the personal scorecard it is to each employer’s benefit program. The suggestions are to a specific set of resources the employer provides.
  • Employer Analytics Dashboard: Enables employers to drill into the data to answer critical benefits strategy questions and build business cases for changes. Employers can also compare their results against Fidelity’s national data benchmark.

According to Weaver, the Dashboard was built to be very flexible so whatever type of indicative HR data the employer wants to provide Fidelity can use to give different cuts of data. At a high level, data can be sorted by gender, generation, marital status, whether the employee has children or job class, among others.

As an example of a cohort analysis, he says employers may see that Millennials in a particular income range that have student debt have lower financial wellness scores. That could be a business case for offering student loan help.

However, Weaver points out that there is an interconnectedness of domains. “We’ve found that being unwell in one area—say financial wellness—can impact other areas, such as physical wellness or life wellness,” he says. “If an employer only focuses on one domain, it could be missing information about wellness in other areas.”

Weaver says it seems like a universal area in which employers are struggling—they’ve made investments in lots of resources and have challenges in driving employees to those resources. “Anything employers can do to differentiate themselves, will help attract, engage and retain employees,” he notes.

The Total Well-Being solution was developed by Fidelity’s behavioral scientists and leading academic psychologists as well as feedback from Fidelity clients. The Fidelity Total Well-Being offering is currently available to employers in the U.S. with availability for additional countries in 2020.  For more information, current Fidelity clients can contact their Managing Director, while non-Fidelity clients are welcome to contact Fidelity Workplace Consulting at FidelityWorkplaceConsulting@fmr.com for more information.
Investing November 6, 2019

Will Tech Innovation Break the Business Cycle?

Suggesting ways investors can address the lower-growth outlook, senior leaders at J.P. Morgan point to the alternative investments and private equity space as a developing opportunity set.

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J.P. Morgan Asset Management has published its 2020 Long-Term Capital Markets Assumptions report, with a focus this year on exploring the complexities of late-cycle investing in an environment of ultra-low bond yields.

During a media roundtable held in New York to unveil the new report, John Bilton, head of global multi-asset strategy, highlighted the impact of trade uncertainty between the world’s economic superpowers and a recent reversal in the trajectory of global monetary policy.

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“In an environment of very low bond yields, investors must reassess how to design the optimal portfolio, as the tradeoff is no longer between foregone risky asset returns and reduced portfolio risks—but is instead between a zero or even negative return in exchange for that risk reduction,” Bilton said.

David Kelly, chief global strategist for J.P. Morgan Asset Management, noted that global growth expectations for the 10 to 15 year time horizon remain relatively modest. He cited such headwinds to growth as aging populations in developed economies, and noted that one important tailwind for stronger-than-expected growth could be a technology-driven boost to productivity. Kelly noted that over the last year, the economic cycle matured even further, becoming the longest U.S. expansion on record and creating a sense of the “new abnormal.”

“Portfolio flexibility remains key for investors looking to manage cycle uncertainty,” Kelly said, “with those seeking higher returns continuing to be drawn to private markets and other alternatives as both a diversifier and a source of excess returns.”

Pulkit Sharma, head of investment strategy and solutions at J.P. Morgan Alternatives Solutions Group, emphasized the growing importance of alternative investments, and particularly private equity, for institutional investors.

At a high level, the trio said they expect global growth to average about 2.3% over the next 10 to 15 years, down 20 basis points from last year’s projection. The developed market forecast remains unchanged at 1.5%, while emerging market forecasts have been trimmed 35 basis points to 3.9%. Population aging is broadly to blame for the lower forecasts for global growth, the J.P. Morgan experts explained.

Projections for global inflation also remain low, and global monetary policy is expected to remain “extremely accommodative” throughout this cycle and well into the next one—leading to a significant delay in rate normalization. That fact, in combination with much lower starting yields and a modest cut to the firm’s equilibrium yield estimates, adds up to a sharp fall in projected fixed income returns—in some cases taking them negative over the forecast horizon.

Suggesting ways investors can address this muddle-through outlook, the J.P. Morgan team pointed to the alternative investments and private equity space as a developing opportunity set. They noted the 10 to 15 year aggregate private equity return forecast has been raised 55 basis points to 8.80%.

“Private equity continues to be attractive to those investors looking for return uplift, as well as those seeking more specific exposure to technology themes,” Sharma said. “This year we forecast that core U.S. real estate returns, levered and net of fees, will average 5.80% over the next 10 to 15 years. Casting the net more widely, forecast returns from global real assets and infrastructure have held up remarkably well, and given the resilience of their cash flows, they may even serve as a proxy for duration in portfolios with limited short-run liquidity demands.”

The J.P. Morgan leaders said they hope and expect that, over time, investors in defined contribution (DC) plans will gain greater access to alternatives, real assets and private equity placements. The 2020 report notes that aversion to real estate in particular seems to stem from the central role overvalued property markets played in triggering the global financial crisis back in 2008. But, the report argues, a longer-run analysis of through-cycle real estate returns suggests that the global financial crisis was an anomaly and that real estate returns generally remain robust throughout the cycle.

“This year, we forecast that core U.S. real estate returns will average 5.8% over the next 10 to 15 years, withe some way ahead of the returns available from a balanced 60/40 stock/bond portfolio,” Sharma noted.

Overall, the 2020 long-term capital market assumptions forecast modest growth and contained inflation, and they recognize the challenges to portfolio construction that zero and negative bond yields present. The environment is complicating the late-cycle playbook for those investors with an eye on tactical asset allocation. There are bright spots, but even then, investors need to appreciate the tradeoffs implicitly required to capture enhanced returns. Credit offers sizable return pickup over sovereign bonds, but with large drawdown risk when the economy turns; real estate returns are attractive, as are those in private equity, but illiquidity is a consideration; and emerging markets returns are forecast well above developed market returns in most assets, but in the short run, the persistence of trade uncertainty will remain a headwind.

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