Do your clients know what’s in their 401(k)s? Many investors don’t, says LPL Financial, the country’s largest independent broker-dealer.
“We ask senior executives all the time and most of the time they don’t remember what [investments] they picked for their 401(k),” Bill Chetney, LPL’s executive vice president of LPL Financial Retirement Partners, said in an interview. “It’s the greatest failing of the 401(k) industry thus far to rely on one hour-long meeting” a year with an advisor to attend to a critical component of every investor’s life.
The Worksite Financial Solutions platform is intended to “create new opportunities for our affiliated retirement-plan focused financial advisors,” Chetney says. It's also LPL’s response to new players in the online financial planning space, including Edelman Online, LearnVest and Mint.com, Chetney says. The intent is to bring financial planners into regular communication with their clients by providing advice about retirement and other major life events such as planning to buy a home or to send children to college, he added.
“We are really taking a holistic approach to this,” Chetney says. "It’s not just managing the money. It’s going further and really taking responsibility for creating, over the years and decades to come, a much improved and more financially literate 401(k) investor.”
LPL says the platform will address the following specific areas for plan participants:
Advice: Clients will be able to receive customized advice through an online service that that asks them questions about their financial picture through a detailed onboarding process. Based on this information, participants can elect to receive personalized advice through the system or manage their accounts on their own. Participants can opt to receive advice not just in the retirement planning stages, but all the way through their retirements, as well. This online platform will be fully integrated with LPL Financial’s reporting and monitoring tools for plan advisors.
Education: The platform will include an online financial wellness center, which will give clients a clear view of their own current financial situations. It also will provide them with tools to support their individual improvement in areas of concern.
Job transitions: The platform will also incorporate the Employee Transition Solution, which LPL Financial launched in May 2012, which helps advisors transition clients' retirement plan accounts after the client leaves an employer. This program provides retirement plan-focused advisors powerful new options to grow and strengthen their businesses.
LPL expects the rollout of the new platform to be completed in April.