BCG Blog

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.

One aspect of active listening that advisors may want to consider involves asking confirming questions. Yet, some business experts suggest avoiding the most common of those confirming questions: “Have I answered all of your questions today?” Here’s what advisors can do to think of how to adopt this phrase in their client communications.

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.

If you are searching for answers to this knowledge gap, don’t look to advisors. Results from a study released by the Harris Poll in August 2023 showed that advisors are twice as likely (80% to 40%) to include annuities as asset protection and diversification tools over EFTs. What’s the holdup?

Among the many takeaways from the Binance charges and the Bankman-Fried trial how charisma can impact a company’s disregard for business basics, such as an accounting department in the Bankman-Fried case. Unlike cranberry sauce at Thanksgiving, you can never have too much consideration of compliance in the financial industry. Company culture can be a big player in how employees put compliance into effect.

As 2023 ends, it may be that luxury brands are showing a lapse in both profit as well as sway on consumers. For financial advisors who look to track luxury brands in their marketing and advertising approaches, this could be an important trend to track. And it isn’t all negative.

If you think inflation is last year’s news, you may be out of step with employees. COLA increases by SSA and inflation adjustments by the IRS to retirement accounts show that inflation is still running rough on employees’ savings. And now two new studies show investors are very concerned about inflation’s impact on both the date and amount of their retirement.

Employee concerns about worker strikes and military action in the middle east region may show anxiety about market volatility and retirement fund safety. Plan sponsors may want to pause and consider how they can use employee surveys to gauge the level of employee distress over volatility as well as how to address those concerns.

Employees may be chafing from feeling forced towards action in other areas of their life that seems to be morality-based or “woke.” Will that discomfort translate into unhappiness with the actions of plan sponsors to encourage retirement readiness? Sponsors may have some options for how to continue incentivizing employees to enroll in retirement plans.

Events outside of the United States have been on everyone’s hearts and minds this fall. Plan sponsors may be concerned for their own families and loved ones, and also for their plan participants who have retired overseas. Nine million Americans live abroad, according to the State Department. Those living abroad may have two concerns when it comes to their retirement funds: bank account access and email.

Benefits can be an important part of the view prospective employees have of your company and whether they want to apply. How can you make sure your benefits measure up? We have a few thoughts.

If you’ve been following financial writers on other platforms for topics to cover in employee education sessions, it’s worth your time to consider what Substack writers have to offer. And, if you recommend accounts on your employee education pages, adding other sources with in-depth information may increase your employees’ knowledge base. We’ve picked a few we enjoy.

The IRS’s new details on how it will increase its hiring shows a potential for increased scrutiny and potential audits for 401(k) plans and investors with complex wealth basis.

For a generation named for its inability to be quantified it may come as a surprise that Generation X may go down in history for having the worst numbers, at least when it comes to retirement. Generation X, those now in their 40s and 50s, account for about one-fifth of the population, a significantly smaller cohort than other generations and yet their worries are weightier than others.

For many professionals, the end of the year means nailing down the details of key business plans, like your marketing and communications plans. That is why we’ve scheduled this series on how to construct and format your communications calendar to right when you may need it.

These days, artificial Intelligence is top of mind for almost any professional. Financial advisors are no exception. They have often had to justify how their work can’t be replaced by that of a robot. First, were robo-indexes. Then the algorithms. And now, artificial intelligence, specifically ChatGPT. But good news humans! AI makes for a terrible financial advisor. Here’s what you should know.

Communications plans can seem overwhelming but when they are done well, they help you measure and monitor important details, increasing prospect pools and warming up your leads. Here are a few things to think about when building a communications plan for your marketing efforts.

Financial advisors deal in confidence all day long. Whether it’s measuring the value at risk of an investment portfolio or helping a client assess their risk tolerance, confidence is a huge part of what advisors do. But when it comes to clients, you may be getting punked. New research shows that one in five Americans thinks they’ll never be able to retire. What accounts for the insecurity?

As Quarter 4 draws near, Plan Sponsors may be wondering how they can help employees capture the end of the year energy to plan for retirement. One of our new favorite ways is to combine a well-known method with a newer system: track and stack. Tracking habits and progress towards goals is a method known to help motivate employees towards goals. But habit stacking is a new method that is stirring up a lot of interest for its impact.

Some changes to IRAs in the Secure Act 2.0 may have brought employees to think about how they may want to incorporate IRAs into their retirement savings plan. Towards that end, Plan Sponsors may want to offer employees a few key details on why IRAs can benefit their savings.

A handful of cases slated to be heard by the Supreme Court this Fall could be important for Plan Sponsors. Here’s what to know.

On an individual level, communication overload can be a serious problem in terms of employee productivity and job satisfaction. On an enterprise level, communication can have serious compliance repercussions. Generic tips for using to-do lists and AI to sort your inbox don’t fully address the problem and its impact on decision-making.

Recent studies may challenge assumptions on retirement planning, for clients and advisors. Taken together, the studies show a compelling conclusion that using a financial planner greatly increases the chances of succeeding saving sufficiently for retirement. Read on for three takeaways.

If the launch of a new platform rattles your marketing department, it may be because your firm’s communications plan is based too much on responding and less on a clear executable strategy. Through a series of articles, we make it easy to streamline your communications and content creation so that you can capture more leads and have a smoother pipeline of prospective clients.

As an update to our June 2023 article on auto-enrolling employees in emergency savings accounts, we thought it might be worthwhile to highlight that the DOL is specifically requesting comment on the reporting requirements concerning Emergency Savings Accounts and detail the two questions on which the DOL seeks comment.

Credit card debt competes with saving, for retirement or emergencies, on the spreadsheet cells of your employees’ budget. This war of intentions is particularly noticeable in younger generations, like GenZ, those just entering the workforce. Here’s a review of how credit card debt impacts retirement saving.

New research shows that over half of all plan participants can’t pass a basic retirement education quiz. But where to start? Here are a few suggestions of where to begin with a plan participant education program.

Deliberating over de minimis incentives to boost participation in 401(k) and 403(b) plans? We discuss the details of the new provision in this article about Section 113 of the Secure 2.0 Act.

A perfect storm occurs rarely, when two or more meteorological events come together to create disastrous effects much more so than if the two events had happened individually. The impact of student loans coming due at the same time as a significant amount of bad debt written off by credit card companies may just be one of those rare, disastrous situations.

It’s not an epiphany that employee benefits are a significant tool in recruiting and retaining employees. How can you be sure you’ve got the right end game in sight? Before you go singing “it’s me, Hi, I’m the problem,” you may want to consider two basics of leadership communications.

Your content may be perfect, but if it isn’t organized to flow well with how readers consume information, it might as well be a smoke signal. Here’s how improving scannability can help financial advisors win more warm leads.

If your tech budget is a tad limited, making your tech dollars work means focusing on getting the most for your money. Haphazard upgrading can lead to deficits in how your technology integrates as an enterprise. To avoid tech debt, you may want to consider these new products.

All eyes may be on clarifying the Secure Act 2.0, but other legislative changes could keep advisors on their toes. Especially if the Supreme Court challenges administrative agency authority. Here’s what to consider.

Plan sponsors are increasingly offering financial literacy programs for their participants, including educating participants on their rights and the roles of consumer agencies. A new effort by the CFPB may cause confusion among participants seeking consumer loans. The history and impact of predatory lending may predict positive and negative impacts of the new policy.

Best practice documents can be helpful in insulating assets from risk and, since they can be used as benchmarks, limiting liability. Yet, keeping up with changes to best practices can be daunting. If your plan administrator and HR department are thinking of updating their best practices library and worry about the resources needed, you may have a secret weapon in this process: career development.

The balancing act most plan sponsors engage in to expand benefits, minimize costs, and remain within regulatory rules can feel like walking a tightrope. Over the last year, we’ve been looking at aspects of auto-enrolling employees in programs. Here, we look at the concerns around compliance.

In the tsunami of information and misinformation about FinTech and digital assets some information may get missed. Here are five topics worth paying attention to: 1) the SEC v. Coinbase case and defining securities to include digital assets; 2) the UCC and Blockchain; 3) open banking extensions; 4) AI for loan processing; and 5) AI for cybersecurity.

The Center for Retirement Research’s new report presents quite a fascinating find: 40% of American households are either too worried or aren’t worried enough about whether they are on track for retirement. And the shocking part is, those with higher incomes may be falling into the “not worried enough category."

The passage of the Secure 2.0 Act had major changes on many American’s retirement planning options. The process was complex, drawn out and not without its problems. Six months after it was made into law, analysts and lawmakers have noted a few key holes in the legislation.

Data from the Bureau of Labor Statistics (BLS) shows that employees are also continuing to quit in 2023 at a rate similar to 2022. Some employers turning to long term temporary employees to fill these gaps may be wondering if they can roll those into systems set up for seasonal workers in terms of benefits. Plan sponsors should exercise caution in that area. Here’s why.

Substack subscriptions are booming. What can plan sponsors learn about how Substack’s formatting helps readers stick with long form pieces?

Right now, administrative agency authority is a source of tension. Rulings on one agency may signal limits on others that regulate plans and plan sponsors. Arguments about the DOL’s ESG rule aren’t the only ones being made about agencies’ plan sponsors should watch. Here’s a round up of some potential cases.

Recently we noticed an absence of activity regarding financial coaching regulations and standards. What’s surprising about the lack of regulation on financial coaching is that the field has been growing significantly. Financial advisors may want to pay attention to this trend as their clients may benefit from coaching but due to lack of standards, coaches may be overstepping the goal line.

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.

The Canadian pension model is continuing to attract attention as word of its superior returns spreads. Are US pension funds ready to follow suit? Advisors working with institutions may want to review the Canadian model to be prepared for client questions.

With major changes to direct indexing recently, clients may be asking you about this approach. Here are four main points clients should know about this approach.

Financial advisors are used to keeping an eye out for risk, managing options, and avoiding potential areas for their clients. So, managing their own firms’ risk may get less attention. A new report from Deloitte on the future of risk made us ask what can be done beyond our standard risk management approaches?

GenZ, those aged 13 to 26, have a major consumer debt crisis clouding their future. Advisors may need to dig deep into the causes to be prepared to help this generation get back on track for retirement saving.

Plan sponsors contemplating changes to their auto-enrollment functions may want to pay attention to the rising number of folks using their tax returns as savings. Are Americans using their tax return as a default savings account? Auto-enrollment in savings for employees without an emergency account is a newer feature of some employee benefits dashboards and is not without criticism.

Educational options for plan participants just got easier. More online educational programs used by schools and universities are now including personal finance options. Here are a few options for outsourcing your educational programs.

Many plan sponsors and human resource professionals may have felt increasing pressure to expand their benefits. But with that pressure comes the tension of the expense of employee benefits. This conflict usually arises over the budgeting process. Yet, there are steps that HR professionals can take now to reduce budget tension.

Two new rules on credit reporting and credit card late fees may help employees feel empowered to tackle retirement savings. New rules proposed by the CFPB may ease employees’ minds around their relationship with their consumer debt.

New SEC custodial rules coupled with concerns over liquidity of custodians is a cocktail mix sponsors may want to send back to the bartender. A few key points to consider of how these two trends as well as how employee education about fiduciary duty may help ease concerns about custodial liquidity and bank failures.

If severance plans make you sweat, hang in there. Here is the latest in information about confidentiality and clear communication around how to use severance agreements to your best advantage and the increasing use of upskilling.

What to say in uncertain times when the times keep on rolling. The bank failure and receivership crisis and investor uncertainty may bring up bigger questions about risk tolerance and risk capacity.

People like paper. And luxury brands are providing them with print marketing. Here’s why you should consider your leave-behind marketing materials and the relationship building opportunities they bring.

Cybersecurity continues to be a going source of concern and cost for businesses. New thoughts on how to prevent internal cybersecurity issues can be combined with the EBSA’s best practices to help advisors increase their systems.

Many plan sponsors made big moves in 2022, including changes to their plans to include more participants and to broaden their benefits. They also set their sights on incorporating the changes SECURE Act 2.0 brought.

A new trend in retirement divorce may impact plan management for participants who divorce and their families.

As long as there have been parents, there have been complaints about schools, and innovations in the educational model. Rapid growth in both homeschooling organizations and private schools may correspond to growth in eligibility for 403(b) plans.

The key to calm successful clients may be a return to basics. While the familiar may seem simple, that doesn’t mean it’s without merit. Portfolio review, rebalancing, education, and life insurance should be top of list as the economy continues to meander.

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.

Publishing which brokerage firms now have a restricted label maybe more than public shaming rulebreakers, it may be a sign that increased enforcement to protect consumers is coming both from FINRA and from the SEC. A few other harbingers are hiding the two agencies’ public notices.

Plan sponsors keeping an eye on trends in benefit plans and offerings may want to pay attention to a new field – manufacturing. Will development of new manufacturing across the U.S. change employee expectations for benefit plans?

SECURE Act 2.0 may require a bit of work for plan sponsors and those who manage the administrative side of benefit plans. We sat down and discussed the new act with our experts. They noted three main areas sponsors may want to consider: hardship deduction tracking; changes that could significantly increase or decrease the number of participants (and by association, your costs); and how forms are worded and stored.

In an effort to build benefits packages that attract workers, many employers are adding student loan repayments to their benefits lineup. This measure was often seen as part of professions requiring advanced degrees like law and health care. But a new study may add additional weight to that decision by showing that student loans impact retirement income long after employees have graduated.

Several major trends may be colliding for women in investing. Three that may have the most impact are a potential recession, the Great Wealth Transfer, and the rebalancing after the she-cession. Advisors may want to engage in a careful consideration of these trends, how they interact, and what it means for asset building for women.

Act 2.0 is full of provisions that will benefit clients of all sizes. But what we focus on and what clients care about may be different. Here are three areas that may drive client conversations over the next few months.

Sales of annuities are breaking records, and yet, many advisors shy away from them. Sales in 2022 topped $80.7 billion in the summer. That’s not too shabby for an asset class that causes confusion among many.

For the last four or five years, every article seeking to review the past year’s events has summed up the previous twelve months as “a lot.” After so much unpredictability and turmoil in the markets, reading those future planning articles may seem less than fruitful. Yet, we still think it is important to take stock of what has happened in 2022 and look at what we think might be coming in 2023.

New lawsuits against Plan Sponsors are all over the map, and not just geographically. Sponsors are now being sued for choosing funds that are too cheap. The class action suits continue their pile-on against plan sponsors. Here are a few key takeaways.

When it comes to hiring, interviews are a two-way street. Are you marketing your benefits well? How best to be honest and open about benefits in recruiting.

Seasoning isn’t just for your stuffing. Instead, seasoning may be flummoxing your benefits team. Adding those workers can add a positive boost to morale but may be a nightmare for your administrative team. Here are three key considerations to discuss with your team.