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Jason Van de Loo of Edelman Financial Engines

Retirement Planning > Saving for Retirement

Edelman's Momentum Service Puts Free Advice in 401(k)s

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Recent research from Edelman Financial Engines finds that when facing a significant life event, nearly three-quarters of employees expect their firms to provide access to a financial professional.

With the company’s financial wellness platform, Momentum, an expansion of its 401(k) services to employers, that’s available — and at no cost to employees.

“Employers are realizing that [financial wellness] is a challenge they need to address in the workplace, and employees realize they need help they didn’t know they needed,” Jason Van de Loo, co-chief client officer of Edelman Financial Engines, tells ThinkAdvisor in an interview.

That is to say, many employees aren’t of an age to have experienced the effects of significant market turmoil, high inflation and geopolitical upheaval.

In light of that environment, workers need help making financial decisions now and in the future, especially when a major life event occurs.

Momentum, which was introduced in 2022, runs the gamut from online digital tools to one-on-one advisor access, all free to the employee.

“Our advisors are waiting in the background [to help] when an employee expresses a need … to work with a dedicated financial advisor,” Van de Loo says in the interview.

He describes one of Momentum’s big advantages: “The advisor doesn’t need to roll assets out of a 401(k) plan in order to help.”

In the recent interview with Van de Loo, who was speaking by phone from his Boston base, he also details how much Momentum dovetails with Edelman Financial Engines’ vigorous push to acquire RIA firms. Here are excerpts from our interview:

THINKADVISOR: Is the Momentum platform open only to a company’s employees that have 401(k) accounts?

JASON VAN DE LOO: We launched it first with employer partners who have our 401(k) services, but it’s designed so that any employer that’s looking for financial wellness of their employee base can leverage our offering.

What prompted you to introduce Momentum?

Our research told us that about three-quarters of employees expect their employers to provide access to a financial wellness program, particularly around significant life events, where money is in motion.

Workplace holistic financial wellness seems to be attracting lots of attention. How come?

Employers are realizing that this is a challenge they need to address in the workplace, and employees realize they need help that they didn’t know they needed.

Please explain that.

There are so many employees in the workforce who haven’t experienced market turmoil, the kind of inflation we’re seeing now, the kind of volatility and global uncertainty we’re seeing now.

I think that employers and employees are waking up to the reality that in the next 20 years or more there could be [even] more volatility and that if you’re an employer, you’ll need to help employees navigate some [necessary] financial decisions.

Employees now realize they need help and [feel] that, “If my employer can offer a set of options and give me the kind of help I need, that’s a really strong value proposition for me as well.”

Is Momentum a separate division of Edelman Financial Engines?

No. It’s a new service offering.  

Think of it as another offering alongside our online advice, managed accounts services and personal advisor offering, all of which allows us to provide a more holistic service to employers and their employees.

If workers sign up with Momentum, do they have access to a human financial advisor?

They do. Momentum includes a broad range of digital tools so employees can engage with online content and articles, calculators and simulators.

But any employee can also call one of our financial counselors for a counseling conversation at no cost.

If the employee determines their situation is complex enough that they would like to establish a one-on-one relationship with a dedicated financial advisor, we make the connection happen as well.

Who pays for the advice that the advisor provides?

It’s part of our relationship with the employer. It’s important to both the employers we work with and to us that every employee has access to a financial counselor at any time. There’s no cost to the employee.

Are all the advisors Edelman employees?

They are. The connection to the workplace is one of the things we have that not many RIAs have.

So we don’t need to roll out of the employee’s 401(k) plan to help them. That puts our advisors in the unique position of being able to do everything in the best interest of the client.

Because they’ve already established a relationship with those employees, that’s a plus for the advisors. Right?

Yes. The employers have trust in us because we’ve provided online advice and managed account services in the past. 

And we know a lot about the employers and their benefit plans. That gives our advisors an expertise that really makes a difference to the end client.

It makes it easier for the advisors as well?

Right. The advisor has a picture of the entire household’s finances; and, as I say, they don’t  have to roll assets out of a 401(k) plan to be able to help. 

Are advisors passive until they’re called on to help?

Yes. Our advisors aren’t making cold calls to these employees. They’re waiting in the background. 

When an employee expresses a need, has talked with a financial counselor and identifies that they’d like to work with a dedicated financial planner, that’s when our advisors are introduced to them to establish a relationship.

Do the advisors make investments on behalf of the employees? 

No. Our advisors don’t work as portfolio managers. They’re truly financial planners, and that allows them to focus on the clients thoroughly and more holistically.

We built Edelman Financial Engines [using] Nobel Prize-winning methodology.

Our investment allocation decisions are all managed centrally by our investment management team.

But suppose employees want to invest in a particular company. Would your advisor help them do that? 

It depends on the individual situation. We sometimes [work with] employees who want to own concentrated positions in company stock, for example.

We have guidelines for how much we would recommend an individual hold in that case.

If the employee is comfortable with those guidelines, then our advisor will work with them to manage their portfolio on a glidepath over time.

What if they want to invest in a different company, not their employer?

In some cases, employees are more do-it-yourselfers — investment enthusiasts. They’re more asset traders. 

In that situation, where an employee doesn’t align with our investment methodology, we point them toward options outside Edelman Financial Engines, where they may be able to pursue that.

In the case of an outside account, we would link to it so that we can optimize the rest of the portfolio around what’s in that position.

Do Momentum and Edelman Financial Engines’ thrust to acquire RIA firms complement each other?

Yes, [the acquisitions] definitely complement what we’re doing in the financial wellness space. We’ve acquired five RIA firms now and are always looking for firms. 

For example, we acquired Smart Investor, in California, in 2022. It has relationships with small firms for retirement-plan [management]. 

And that complements our [financial wellness] offering. [Acquisitions] allow us to reach a different type of employer than we have typically reached. 

We ultimately integrate these independent RIAs into Edelman Financial Engines, so that over time, every firm we acquire is using one planning process, one investment management process, one financial advice process and one wellness process.

Pictured: Jason Van de Loo of Edelman Financial Engines


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