BCG Blog

An essential part of investment planning has always included drafting a strategy to account for a client’s level of risk tolerance. Yet, assessing risk tolerance has always been balanced on two imprecise supports. Advisors may want to consider whether their clients who are considering drastic changes are reacting to a volatile market or if one of the imprecise supports of risk tolerance measurement has slipped.

The volatility in the market, and the whipsawing reactions to it, have ushered in an email maelstrom of offers of help. Why aren’t more clients responding? It could be that clients don’t know how to respond to offers to help that aren’t specific. In this practice pointer, we review how advisors can lighten their clients’ loads in seeking help by offering specifics.

Can advisors help their clients manage investing anxiety in today’s volatile market by reinforcing their duties as fiduciaries? We think so. Here’s an overview of how advisors can detail their commitment to protecting their clients’ bests interests.

Lately we’ve noted an uptick in the word recession. It isn’t the frequency of its use that concerns us, it’s the placement. Lately, the use of the word recession has been popping up more in the general media. While we know that talk of recession is a strong indicator of investor confidence concerns, it’s a complicated topic. Getting it right is important.

New research indicates a gap between how well retirees perceive that they are doing against how well they actually are financially. In the past survey responses of retirees showed high satisfaction even though objective measures told a different story. Plan sponsors may want to increase participant education programming to help with the gap areas identified in new research.

The Department of Labor (DOL’s) beleaguered fiduciary duty rule lingers on in federal court litigation, but there are signs that the dispute (as well as the Rule) may not be around for long.

There are several levels to the news on ESG. For plan sponsors not all of the forthcoming information is necessarily news to use. We suggest focusing on the news about lawsuits on fiduciary duties and ESG rules for plan sponsors.

Instead of taking changes at the DOL as single item issues, it might be more useful to see how all the changes interact. Often, legislators and regulators want changes to interact like a puzzle; each piece interlocking to form a larger picture. But sometimes when many policies are changed at the same time, conflicts emerge that can put those supposed to be following them into the proverbial spot between a rock and a hard place.

Many plan sponsors report lags in enrollment and retirement activity among plan participants. While some statistics show that new tricks and tips have impacted participation in retirement plans, enrollment may still lag. It is possible that the way employees think about retirement in general could be behind the lag in active retirement investing.

Many retirees are not well positioned for the health care challenges they may face in retirement because they did not take advantage of long-term care insurance. While many saving for retirement have begun optimizing savings through Health Savings Accounts, they may not understand how those accounts can be used for long-term care insurance premiums when they do retire.

Political turmoil may be rocking the markets and your firm’s office. How can advisors lead their teams during tough times? Five tips that work.

A Supreme Court ruling curtailing the EPA’s rulemaking for outcome-based regulation could change cybersecurity rules for financial advisors. Well, maybe. We discuss the details by reviewing the Court’s decision and the federal framework for financial institution cybersecurity safeguards.

There may be a new player in the fiduciary duty sandbox, and it involves ESG. Most often when discussing fiduciary duties, the topic at hand involves the research and appropriateness of decision making. Issues of loyalty and trust in investment advice are always worth following.

By this point in January, most people have stepped aside from the aspirational goals they set for the New Year. For many advisors, increasing their marketing efforts made it into their goals for 2025. It can be difficult to carry through on this goal. The key may be to find ways to maximize efficiency when it comes to marketing.

When it comes to alternative investments, do clients want new options or a new approach to the traditional ones? We review the performance of traditional alternative investments, such as private equity, real estate, and commodities and assess new trends.

With the success of auto-enrollment in retirement plans for new hires, some plan sponsors are looking to a new trend among benefits. Many have begun creating plans for re-enrolling employees who have dropped out of retirement plans during their tenures.

When it comes to financial wellness, plan participants and sponsors might not be seeing eye to eye. That divide may not be insurmountable; a little planning may smooth any tensions.

Employee education is often a topic plan sponsors or the employer delegates to vendors, such as a plan administrator. However, recent surveys indicate plan sponsors are opting for plan design changes. It is possible that linking employee education programs to these changes could facilitate those changes.

2024 was full of dramatic moments. Given that, it might be easy to have missed some of the key details and trends in the less dramatic world of employee benefit plans. We thought a review of trends and regulations could be helpful for those whose attention may have been drawn to elsewhere.

The more things change, the more they stay the same. It’s tempting to say that the key themes of 2024 for the investment profession were the same as for years past. You might even ask yourself, is it worth it to do a year in review? We think so.

Trendspotting in alternative investing include generational preferences as well as a close look at the traditional alternative asset classes. And oh, don’t overlook bonds.

Bernie Madoff may have faded from memory but that doesn't mean prospective clients aren't worried about what they hear on the news. Advisors may want to consider how to respond to these hits to the industry's reputation when planning marketing strategies.

Some analysts are making predictions for how the Trump Administration may impact retirement planning based on changes in personnel, others are focused on the changed regulatory structure. But one thing is for certain: the market may be volatile once again.

Here we are – the end of the year and the holiday season. Right now, employees face the challenge of budgeting for all the expenses that come with this time of year: food, travel, gifts, and more. Bad budgeting can lead to high credit card debt, hurting their ability to reach other goals, like saving for retirement. Employers can help employees budget this holiday season – here’s how.

Employees’ interest in savings accounts may be as high as the rates offered on those accounts. But regulations are still slightly less than salient when it comes to how sponsors enroll and incentivize employees to enroll in savings accounts.

A growing number of younger people are looking for “microretirements” as part of their career paths. What is a microretirement, and how can employees and employers work together to benefit each other with this growing trend?

The SEC may be making news lately for its crackdown on cryptocurrency, but the real story may be how its agenda has been changing concerning enforcement actions. Here are a few things financial advisors should consider.

Income variability, market volatility, and continuing international conflict have led clients to increasingly think of including several generations in one financial plan. Here’s what to know about creating family financial plans.

Market costs have been putting many small financial firm owners in a bind. They may find themselves between the rock of needing to increase warm leads and the hard place of reducing costs. There is an answer, and it may be to borrow a popular trick from household management: meal prepping.

This summer FINRA released its industry snapshot for 2024. This report provides a solid overview of changes in the industry over the last year. Financial advisors may want to keep an eye on any trends such as an industry consolidation towards firms with more experience and growth of registered agents in the South and Southeast.

As Quarter Four draws near for many investors, clients may be thinking of preparing for their year-end discussions on tax preparations. But advisors may want to take time to talk with them about the potential for tax changes that 2025 could bring.

The Supreme Court’s summer term in 2024 may be one of the most memorable in decades. But that doesn’t mean it’s time to look away. Three cases set for argument in October of 2024 could have impacts for financial advisors and investment professionals. Here’s what you need to know.

Open enrollment season is often synonymous with stress—for both employees and plan sponsors. With an overwhelming number of benefits options and the complex terminology surrounding them, it’s no surprise that confusion reigns. Fortunately, modern techniques, including new technologies and marketing approaches, are reshaping open enrollment to make it easier, more efficient, and engaging. Here’s what sponsors need to know.

Given the potential changes in regulatory power that could flow from the Supreme Court’s decisions in the summer of 2024, plan sponsors may be wondering if there might be changes in how the DOL enforces its regulations. But that might not be the right tree to go barking up. Instead, a key to understanding changes in enforcement actions could lay with its leadership and its budget.

Having a well-curated policy library in place, particularly in case of an emergency, is no longer just a best practice for plan sponsors—it’s essential for effective risk management. This article explores the importance of preparing a policy library, how plan sponsors can proactively secure sample policies from industry groups, and why working with legal counsel is critical to ensuring compliance and accuracy.

Plan Sponsors may want to consider addressing common misconceptions plan participants have when looking to planning educational resources. Three of the most common misconceptions in retirement planning are 1) budgeting only to prepare; 2) longevity missteps; and 3) amounts over accounts.

In today’s competitive business environment, organizations must continually evolve their employee benefits to attract and retain top talent. One powerful way to ensure that benefits packages resonate with employees is to involve them directly in the decision-making process. Here’s how.

Many Americans have access to retirement benefits through their workplace but may not know how to optimize these benefits. Sometimes, it’s helpful for plan sponsors to review the basics of just how those benefits work and what they mean. Here is a review of the news: both what gets media attention as well as new offerings by plan sponsors.

Inflation may be slowing, but for many clients the cost of a tuition for their children remains a serious concern. Advisors may want to offer proactive information for clients on these accounts. And what better way to educate clients than to rely on the 5Ws learned early on in the class room: who, what, where, why, when and how much

Clients may need their advisor to bring up the topic of family wealth management so that they have a fully informed retirement plan. Here are some of the basics clients may need to discuss with their advisors but may need help initiating a discussion.

Given the dynamic pace of change in the financial industry and to financial advisors finding new marketing products, advisors may want to stop and listen before firing up a new marketing plan involving cross-selling and collaboration. Here is a background on the topic so that advisors can spot issues to discuss with their compliance and legal counsel.

Many employers have begun offering employee wellness benefits to their student and intern workers. Yet, some elements of those wellness programs, such as financial wellness components around retirement planning, may not be available to interns. Employers that are plan sponsors may want to help their participants with retirement readiness and may encourage early active participation in a retirement plan.

Financial literacy has always been a crucial component of a secure financial future. However, each generation faces unique challenges and opportunities that shape their financial education needs. Now, as Generation Z enters the workforce, plan sponsors must recognize that financial literacy is changing yet again.

New recommendations from the federal government call for wider use of dashboards for retirement plan participants. But plan sponsors know that not all dashboards are created equal. Following tips on user experience from other industries can help sponsors craft dashboards that help participants be better prepared for their investment planning.

The merits of alternative investments for many investors as appropriate vehicles for diversification can be reduced when decisions are motivated by emotional investing. While advisors are familiar with this dangerous dynamic duo, new approaches suggest that the risky mix of emotional investing and alternative investments may be harmonized by something as simple as education.

The gap between new, more lenient regulations on who can qualify as an employer under ERISA and providing those plans might be filled by financial advisors if advisors can understand how to market their services to those groups. To understand how to cross this gap, advisors may want to understand the history of the rule change, how associations make decisions, and how to market to them.

Recent Supreme Court cases restricting the powers of regulatory agencies like the DOL and SEC cases may have injected an enormous punch of uncertainty into most financial advisor’s plans. It could be the ultimate unknown unknown. But fear not, advisors may have a friend in flexibility.

A handful of federal cases ruling in favor of plan sponsors on recordkeeping fees may provide important details on effective benchmarking. Sponsors may note that merely comparing fees between plans was not deemed a sufficient basis of comparison. Instead, comparator plans (for benchmarking) should include all services requested.

Plan sponsors play a critical role in helping employees secure their financial future. While retirement plans are often at the forefront of this effort, it's also important to consider other financial tools that can support employees' broader financial well-being. One such tool is the 529 plan, designed specifically for education savings.

REAL ID is making it really hard to open new accounts. The change in identity verification requirements may only impact not yet enrolled plan participants. Yet, for participants who may be opening multiple accounts (such as those who’ve moved or younger participants) the increase in requirements could deter their interest in enrolling in benefits.

In the race to keep up with AI advancements, it seems like financial advisors just got a power boost. In early June of 2024, the FINRA Investor Education Foundation reported new research suggesting consumer trust favored financial professionals more than AI in terms of financial information.

Over the years, we’ve weighed the pros and cons of various social media platforms on financial literacy. Sometimes, preference for social media runs along generational lines. Lately, two trends may have combined to create an important issue for financial advisors: a reduction in attention span and the rise in so called “Finfluencer” may mean clients are relying on TikTok for financial education.

Recent research released in June of 2024 by MFS Investment Management may reflect that the scope of risk is shifting. These concerns include administrative and regulatory changes as well as continuing concerns about retirement readiness of plan participants. These concerns about managing volatility and adjusting for potential litigation risks may have financial advisors considering their current offerings of investment monitoring.

Recent enforcement actions by the Department of Labor indicate an uptick in cases against profit sharing plans. Class action settlements show that plaintiffs continue to keep a watchful eye on retirement plan fee choices. A new report indicates that activist shareholder whistleblowers may be using more than 10% of the SEC’s enforcement budget.

In 2023, the job market underwent changes as it sought to recover from pandemic-related disruptions and grappled with the aftermath of the Great Resignation. The start of 2024 has brought significant changes in how temporary workers are classified and their eligibility for benefits, driven by the SECURE Act and the DOL’s recent ruling on independent contractors.

A new report by the National Institute on Retirement Security (NIRS) highlights that rise in interest in private pensions. Their report makes recommendations for private, non-union based, pension plans. Given an interest by public pensions such as CalPERS in how they manage assets to hedge risks, the NIRS recommendations indicate a change towards positively viewing pensions.

A new report shows that a large percentage of employees are using AI at work, without their employer’s knowledge or approval. Unauthorized AI can create serious cybersecurity risks for those handling private financial information. Such use may also run afoul of the EBSA’s recommendations for retirement plan service providers.

A recent article highlighted on NASDAQ’s news page noted that demographic changes among retirees may create opportunities for more diversity among advisors. Yet, that report seems to not align with other, more recent studies. That may beg the question, what is the state of gender diversity in asset management and financial advising?

A recent opinion from the Supreme Court on a regulatory agency’s funding could resolve some questions over the future of regulation of the retirement planning industry. Yet, there may also be changes on the horizon through related legislation.

A new report from the Center for Retirement Research may be important for advisors who plan to pitch their fiduciary services to small firms. Released in March of 2024, the 2023 Small Business Retirement Survey assesses the beliefs of small business owners regarding retirement benefits and how those beliefs move their decisions to offer, or not, such benefits.

In recent years ESG investing has emerged as a popular choice for investors looking to align their portfolios with their values. One of the key questions advisors may hear from their clients is whether ESG funds perform as well as traditional investments and if they can be a valuable addition to a diversified investment portfolio. Here is a review of where the industry stands on this area.

The average professional worker is swamped by more than 120 emails per day. In this deluge of emails, a problem bobs along like a tiny rowboat: your marketing leads. If you feel like you need to level up your follow ups, here are a few new strategies we’ve seen from a variety of industries.

When it comes to hardship withdrawals, participants may focus more on what they hear and not what is in your plan. Plan Sponsors may want to pause and consider what participants hear versus what the new laws now permit.

Many Plan Sponsors balance their administrative concerns by approaching their various fiduciary and administrative responsibilities via checklists and project plans. Yet even these planning tools may fall short. Most of those approaches fail to address both administrative and analytical issues. A quarter by quarter approach may help create the right balance.

Over the last few years, employers took note of the role benefits played in recruiting employees. Some employers considered matching payments to student loans. But nearly half of employers have chosen not to adopt matching programs. And now several trends may show that hesitancy is warranted.

Recently, the IRS issued guidance on implementing section 348 (cash balance accounts). This guidance may hint at potential regulatory flexibility towards plan testing. Similarly, section 304 (automatic cash out of small accounts) could lead to flexibility in plan audits for small plans.

In the realm of employee benefits, change is inevitable. Sometimes, however, change comes in the form of cutbacks, which can be unsettling for employees. As a plan sponsor, effectively communicating these changes to your workforce is paramount. In today's landscape, where employees expect transparency and authenticity, navigating benefit cutbacks requires finesse and a departure from traditional corporate speak.

As corporate governance business processes become part of plan litigation, and because benefits may be an area ripe for budget trimming, management of employee benefits policies is attracting more attention. Caution is due in this area as AI systems create their own risks.

Has the agency tasked with enforcing ERISA performed on the prediction of increased enforcement action under in the Biden Administration or did it focus on new regulations instead? We compared the first year of the new administration to last year to find out.

The public is having a very heated conversation on aging and capacity, especially when it comes to holding political office. Some may even want a break from the coverage of older politicians and their foibles. But one arena that may need more discussion of longevity and aging is retirement planning.

2023 ranks among the highest for number of lawsuits against plan administrators in the last decade or so, and 2022 had nearly 100 such suits. One reason for the spike is the 2021 Supreme Court ruling in Hughes v. Northwestern. This summer, the lower court ruled on the Hughes case, and its findings further muddied the waters on recordkeeping fees.

Into the brave new world of post Secure Act 2.0 benefit administration comes new and challenging accommodation requests for things such as mental health and long COVID-related illnesses, which may create confusion over balancing and discrimination testing a plan. So, we can only imagine the dismay some benefits advisors may have over news noting an increased favorability of pensions.

Last Fall, we noted several cases before the U.S. Supreme Court that could impact the power federal agencies have to regulate and prosecute plan sponsors. Many of those cases are now working their way through the Court and may have profound impact on agencies such as FINRA, the SEC and the Consumer Finance Protection Bureau. They may also impact the Department of Labor and its investigative wing, the EBSA.

Two recent studies released in January of 2024 point in opposite directions: one indicates that inflation may be slowing down quieting consumer concerns, others say inflation is still top of mind for most workers. What gives? It may be where investors live. For advisors struggling with determining how to manage inflation’s impact on their clients, digging into these studies may help.

Financial advisors may feel like they are finding themselves between a rock and a hard place lately and both rock and hard place may be the doing of the Department of Labor. If you thought the proposed fiduciary rule was the only problem popping up, beware the independent contractor definition changes.

Three major supreme court opinions may be coming soon that could have significant implications for financial advisors and they may not be the ones you’ve heard about. These cases may be more significant: they may reduce the ability of agency regulators to oversee, investigate, and fine financial advisors and institutions by changing a long-held rule deferring to federal agencies in their decisions.

Can you, or can’t you? The state of the regulations on ESG for ERISA-related and public fund fiduciaries is anything but clear. Here’s a roundup of the current activity.

New alternative investments are always worth watching. They show changes in technology, how people feel about asset classes, or their level of insecurity about volatility in the stock market. A new move on micro-equity, or crowdsourced fundraising highlights all of those themes. This time with cake.

Looking for a way to lighten up your stress? The experts all suggest delegating more of your to do list. We know it’s easy. But one task you can delegate to others is building your prospect database.

Potentially risky microloans aren’t for all investors, but they may help some investors diversify their accounts and given the potential for consolidating (and getting out from under) credit card debt, they may also help a lot of middle class would-be borrowers.

Socially Responsible Investing, such as ESG Funds, continues to show strong performance. Here’s an update on how the SRI market has faired since our last post in 2017.

The intention behind ERISA was to ensure that those who manage retirement plans do so to benefit the plan participants and make good choices about investing. Those drafting the law defined certain individuals involved with retirement plans as fiduciaries to impose the duties of prudence and loyalty, specifically those regarding revealing conflicts of interest, on those involved in advising retirement funds.