LPL Launches Platform to Improve 401(k)s for Participants

Platform includes financial advice, wellness

LPL Financial launched a retirement plan platform to help employers provide their workers with an improved 401(k) experience, the firm announced Monday.

“For something that is most people’s primary asset at retirement, [401(k) plans are] light on real advice and education,” Bill Chetney, executive vice president for LPL Retirement Partners, told AdvisorOne on Friday. “The biggest gap in the 401(k) industry is participant experience.”

For many participants, Chetney said, the extent of the advice they get in their 401(k) plan is to be lumped in with participants with similar characteristics. “They ask their age and say, ‘OK, we’re going to stick you with the other 30-year-olds,” he said.

The Worksite Financial Solutions platform helps sponsors and advisors provide more in-depth advice to plan participants regarding their investments, and helps employees assess their own financial wellness and identify the best solution for their needs when they leave the plan. The platform can be branded for the advisor or the plan sponsor and can be delivered online or in person, Chetney said.

“The first leg” of the platform, Chetney said, “is to take away the onerous task of creating an investment portfolio from people with limited expertise.” To do that, LPL partnered with Morningstar for the advice component of the platform. LPL advisors will meet with participants to help them “invest on a discretionary basis, regardless of what’s offered in the investment menu.”

LPL partnered with Financial Finesse for the education component, or the “second leg” of the platform. “We’re very focused on financial literacy and wellness,” Chetney said. He pointed to employers’ increased focus on employees’ physical wellness in order to keep them productive as a precedent. “Employers are seeing the same thing in their employees’ financial lives. Stress isn’t helping them be productive.”

The platform will help create an educational program tailored to each work force, Chetney said, and will survey participants to create individual wellness reports as well as a consolidated report for the company as a whole.

Finally, the platform includes a transition component that LPL originally launched in May to help employees manage their assets when they leave the company to retire or change jobs.

“Historically, people would take a job and stay until they retire 40 years later,” Chetney said. “Now, people change jobs five, six, seven times in their careers.” The transition component provides assistance for employees who want to transfer their 401(k) assets to a new plan or into an IRA.

LPL expects to complete the rollout of the new platform by April.

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