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Building the Case for an Advisor Financial Wellness Model

Practice Management

Imagine if you had to build a puzzle and all the pieces have no corner pieces, no edge pieces and are all the same color? It would really be hard to put it together and quite honestly, you’d probably quit and not try it. That’s what many employees are facing today as they try to manage day-to-day finances, plan for a healthy retirement, and navigate shifting health care costs. Employers recognize this challenge and are looking to financial wellness programs and capabilities that are integrated with other traditional workplace-sponsored benefit offerings like health and life insurance to help employees better manage their financial lives.

No Longer Just a Conversation Starter

As the emphasis on financial wellness programs continues to accelerate, what can a retirement plan advisor do to stand out from their peers and deliver value to their employer clients? Given the consultative nature of advisors, financial wellness is often a topic that serves as a conversation starter, but I’d argue that advisors are missing a major opportunity if they relegate it to just a mere conversation.

Over the past 18-24 months, top retirement plan providers have invested significantly in building out their wellness capabilities. With this, advisors now have more options to both meet client needs while also determining how to best partner with providers where they have complementary wellness offerings in their practices. This is a natural extension of the administration relationship with the provider and enhances the services already provided by the advisor. This allows for co-development of service delivery as well as reporting for both the employer and individual outcomes. In Prudential’s 2018 Benefits and Beyond research, we found that 57% of employers prefer to use their existing provider for financial wellness services, while only 25% prefer to outsource with a different provider.

This leads to an alternate consideration for advisors: the alignment with outside providers or partners who specialize in a specific financial wellness capability to help their clients solve while enhancing their own wellness value proposition. In this case, the advisor integrates the specific tool, which could be a fintech solution, into their practice’s core capabilities. An example would be a retirement advisory firm with a wealth management division that adds an alliance with a debt management service or startup.

Once advisors select a financial wellness model that meets those client needs and fits their business model, they need to do their due diligence to ensure that they or the providers they partner with can fully implement the financial wellness program or capability and provide meaningful measurement. According to our research, nearly 70% of employers measure the impact of their financial wellness programs on a monthly or quarterly basis.

Financial Wellness is a hot topic, and the role of the advisor is instrumental in shaping client adoption and results related to wellness. Regardless of the approach they leverage (engaging with an existing provider’s wellness platform, integrating a stand-alone wellness solution or some combination), it needs to be more than just another conversation for advisors.

It really starts with advisors adopting their own financial wellness models, which can demonstrate to their clients that they are truly subject matter experts and can credibly recommend the right set of financial wellness solutions and partners to help employees retire with the confidence and dignity they deserve. It also requires that they tap into the existing relationships their clients might already have with financial wellness providers and being knowledgeable of other innovative and emerging financial wellness capabilities on the market that can close their clients’ gaps.

All advisors know, this is a relationship business, so the more value they can provide by becoming a financial wellness expert to their clients, the more they can grow their business. Advisors can build their own model or they can leverage the provider’s financial wellness platforms or the fintech solutions that are available. The objective is determining what combination of provider capability, advisor capability and third-party technology works for each relationship.  

Scott Gaul is head of Sales & Strategic Relationships at Prudential Retirement, a business unit of Prudential Financial, Inc. (NYSE: PRU), and a provider of DC, DB and NQDC plan administration, as well as institutional investment and risk management services.