Products August 6, 2015

Wells Fargo Will Offer Financial Engines Advisory Services

Major retirement plan recordkeeper reaches agreement to deliver independent advisory services via Financial Engines.
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Wells Fargo announced it will next year begin offering Financial Engines’ independent advisory services to 401(k) clients.

Ranked as the eighth largest recordkeeper for total 401(k) plan assets in the latest PLANSPONSOR Recordkeeping Survey, Wells Fargo anticipates a release date of “mid-2016” for the service. At that time, retirement plan sponsors on the Wells Fargo recordkeeping platform will be able to elect to add the expanded offering to their retirement benefit plans.

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The deal represents one of the largest moves yet in what some have described as a retirement plan provider technology arms race, through which new and potentially disruptive partnerships are forming. In general, large and more established firms are scooping up smaller technology providers, finding new ways to deliver education, advice and participant self-service. With Wells Fargo joining in on the action, upwards of 3 million plan participants could eventually gain access to the Financial Engines advisory service.

The direct offering will consist of Financial Engines’ full suite of advisory services for 401(k)-type retirement plans, including a discretionary personalized management service for participants who want to partner with or delegate the management of their retirement accounts to a professional. Participants also gain access to online advice channels and personalized retirement income projections—designed to aid those investors “who want to manage their retirement themselves.”

Other services from Financial Engines include the “Income+” retirement income solution, which strives to provide steady and flexible income in retirement. There is also Social Security guidance and planning made available.

Under the agreement, Financial Engines will serve as the adviser and plan fiduciary for the advisory services. All participants will have access to non-commissioned investment adviser representatives, as well as ongoing personalized communication and education that assess their current retirement outlook and make suggestions for improvement, according to Wells Fargo. 

Participants August 5, 2015

Student Loans Setting Millennials Back

The weight of student loan debt is preventing many from saving for retirement.
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Fifty-six percent of Millennials with current or past student debt are delaying major life events, compared with 43% of older adults, Bankrate.com found in a survey. The most common milestone they are postponing is buying a house, closely followed by saving for retirement and buying a car.

While student loan debt has hit Millennials the hardest in terms of delaying major life events, Bankrate learned that while 28% of 18- to 29-year-olds have ever carried student loan debt, 41% of 30- to 49-year-olds have done so.

“Student debt is often portrayed as a Millennial issue, but the truth is that Americans of all ages have put their lives on hold due to student debt,” says Steve Pounds, an analyst with Bankrate.com. “Delaying major life milestones such as buying a home or saving for retirement doesn’t only affect the individual and his or her family. It also has ill effects on the overall economy.”

More than half of all student loan borrowers said they were not warned about the financial risks of taking on education loans. This jumps to 66% among Millennials.

The release of Bankrate.com’s survey comes on the heels of the ninth annual College Savings Foundation State of College Savings Survey, which found that one-third of parents are still shouldering student debt, prompting 51% of them to save in a 529 college savings plan or other vehicle to help their children avoid taking on loans.

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Princeton Survey Research Associates International conducted the survey of 1,000 adults by landlines and cell phones from July 9 to 12 on behalf of Bankrate.com. The full results of the survey can be seen here.

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