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Indebted ‘Nest’

Client Services

In a feature article in the latest issue of NAPA Net the Magazine, six of this year’s Top Young Retirement Plan Advisors talk about how advisors can help employers and employees with student debt repayment programs.

Seeing the connection between student debt and the ability to save for retirement motivated Nate Moody and his colleagues at Lebel & Harriman LLP to focus on student debt repayment programs.
 
“We started looking into these programs because we saw, time and time again, that we would meet with people to talk about trying to get them to save for their 401(k), and when we looked at how much they had to put toward their student debt repayment, literally they couldn’t save,” says Moody, a retirement advisor at Falmouth, Maine-based Lebel & Harriman. “And it’s not just Millennials and Gen Z who have student debt: More and more parents are taking out a loan on their children’s behalf for their college education.

“But if any advisors are looking at this as a way to increase revenue, don’t hold your breath: There is no good way to charge for this,” Moody continues. “You should view it as part of, how can we make this client relationship ‘stickier’? And how can we help participants save more for their retirement? It’s important for advisors to think of themselves as facilitators and thought-provokers, not just as retirement plan fiduciaries. The 401(k) plan alone is not equipped to solve all financial challenges for folks.”

Brittany Smith, a Dallas-based retirement plan advisor at NEXT Retirement Solutions, thinks it’s key to bring emerging ideas like a student debt repayment program to her clients. “I think it’s incumbent on us to be making companies aware that this is something they could potentially do,” she says. “It’s an industry topic right now, similar to lifetime income. As plan advisors, we need to share with our clients what’s being discussed in the industry. That’s why they have a consultant: to bring them new ideas, and to make sure they’re aware of new opportunities.”

To read more, click here.

 

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