John Hancock and NextCapital Announce Enterprise Digital Advice Partnership
Recap: John Hancock Retirement Plan Services will integrate NextCapital’s digital 401(k) platform and begin offering its automated retirement plans and IRA rollovers over the next 12 months. DOL-motivated as robo-advisory is expected to play a key role for advice in best interest of clients.
NextCapital’s robo-platform allows retirement plan participants to have portfolio tracking, planning, savings advice and portfolio management online. The financial advice will be automated, but live help will be available to service the accounts, said Peter Gordon, chief executive of John Hancock Retirement Plan Services, which is part of John Hancock Financial, a division of Manulife Financial Corp.
- Custom user experience and ongoing engagement
- Proprietary or third-party investment methodology
- Self-service and advisor-assisted service models
- Multi-channel supporting 401(k), IRA, and retail brokerage accounts
- Integrations with 401(k) recordkeeping systems and retail custodians
2017 GLOBAL DISTRIBUTION & MARKETING CONSUMER STUDY
Recap: Rise in acceptance of robo services creates challenge for financial services industry: strike a balance between humans and robots
- Seven in 10 consumers around the world would welcome robo-advisory services
- Consumers are now open to robo-advice to help determine which bank account to open (71 percent), which insurance coverage to purchase (74 percent), and how to plan for retirement (68 percent).
- Nearly one-third would switch to Google, Amazon or Facebook for banking services (31 percent), insurance services (29 percent) and financial advisory services (38 percent).
- Nearly the same percentage of global consumers would also consider switching to a supermarket or retailer for their banking (31 percent) and insurance (30 percent) services.
- The survey found nearly two-thirds of consumers are interested in personalized insurance (64 percent) and banking (63 percent) advice based on their individual circumstances, and when asked about wealth management advice, that increases to 73 percent.
- Accenture surveyed 32,715 respondents across 18 countries and regions including the US, Canada, Benelux, France, Germany, Ireland, Italy, Nordic countries, Spain, the United Kingdom, Brazil, Chile Australia, Hong Kong, Indonesia, Japan, Singapore and Thailand. Respondents were consumers of banking, insurance and wealth management services; they were required to have a bank account and an insurance policy and were asked if they used an Independent Financial Advisor, Wealth Manager or Asset Manager, with total financial advisory responses totaling 9,987. Respondents covered multiple generations and income levels. The survey was conducted during May and June 2016.
WaPo: Millennials may need to double how much they save for retirement
Recap: The personal finance website NerdWallet recently estimated that millennials need to save 22 percent of their paychecks to have enough cash in retirement if stock market gains are weaker going forward.
- A roundup of the figures shows that strategists project the Standard & Poor’s 500-stock index will gain 4 percent on average in 2017 — the lowest expected annual gain for the stock market since 2005
- If those gloomier outlooks hold true, workers saving for retirement today may not get as much from their portfolios in the long term as previous generations did
MassMutual RetireSmart Ready Tool
RetireSmart Ready Tool
Recap: Sharpening an online tool to give retirement plan savers clearer information and help them make better decisions
- Refreshed step- by-step navigation to make planning easier and quicker than before
- Ability to include balances from other plan/provider accounts
- New focus on income replacement success gives you an accurate picture in dollars OR income percentage of financial wellness in retirement
- Changes to the site’s look, feel and navigation
- Graphic illustration of how much income savers will potentially need in retirement and whether they are saving enough to get there
- Savers can obtain guidance on what steps to take if their current savings strategy is falling short of their retirement goals. Savers can choose to implement the recommended strategies by themselves, or work with a financial advisor on a recommended strategy
Americans Are Putting Billions More Than Usual in Their 401(k)s
Recap: Automatic enrollment + auto-escalation. Fees on 401(k) plans are falling.
- The typical baby boomer, whose generation is just starting to retire, has a median of $147,000 in all of his retirement accounts, according to the Transamerica Center for Retirement Studies
- 1 in 3 private sector workers don’t even have a retirement plan through their job
- On average, workers in 2015 put 6.8 percent of their salaries into 401(k) and profit-sharing plans, according to a recent survey of more than 600 plans. That’s up from 6.2 percent in 2010, the Plan Sponsor Council of America found.
- About $7 trillion is already invested in 401(k) and other defined contribution plans, according to the Investment Company Institute.
- Employers pitched in 4.7 percent of payroll in 2015, the same as in 2013 and 2014.
- In such plans, 89 percent of workers are making contributions, the survey finds, while 75 percent make 401(k) contributions under plans without auto-enrollment.
- Auto-enrolled employees save more, 7.2 percent of their salaries vs. 6.3 percent for those who weren’t auto-enrolled
- Less than a quarter of plans auto-escalate all participants, while 16 percent boost contributions only for workers who are deemed to be not saving enough
- The total cost of running a 401(k) plan is down 17 percent since 2009, to 0.39 percent of plan assets in 2014. The cost of the mutual funds inside 401(k)s has dropped even faster, by 28 percent to an annual expense ratio of 0.53 percent in 2015