BCG Blog

Transparency, Flexibility, Pensions, and Savings Accounts: A Year in Review

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.

La Plus ca Change: Digesting Investing 2024

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.

With a Twist: Alternative Investment Trends and a Forgotten Friend

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.

Small Ship Warning: The 411 on Charting PR in a Storm Not of Your Making

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.

Volatility, Behavioral Finance, and Your Clients

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.

How to Help Employees Master Budgeting Techniques Using Holiday Spending as a Teaching Tool

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.

Snags in Savings: Considerations for Sponsors on Employee Savings Plans

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.

The Microretirements Trend

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?

SEC Leadership Change and Trendspotting

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.

Financial Plans for the Entire Family

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.

In a Marketing Pinch? Add a Dash of Menu Planning

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.

FINRA Data: The Latest Snapshot Shows Trends in Consolidation and Geographic Changes

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.

Time to talk taxes: The TCJA, Child Tax Credits, and Tax Brackets

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.

Eyes on the Court: Could the Supreme Court’s Fall Arguments Impact Financial Advisors?

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.

New Techniques to Make Open Enrollment Easier

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.

High vs Wide: How Will the EBSA’s Budget Change its Enforcement Action Priorities?

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.

Building a Comprehensive Policy Library for Emergency Preparedness: A Proactive Approach for Benefits Teams

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.

Common Misconceptions in Retirement Planning: Time to Review

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.

Engaging Employee Input to Shape New Benefits: A Strategic Approach

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.

New and Newsworthy: A Review of 401ks and Company Retirement Benefits

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.

Educating Clients on Education Savings Strategies

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

A Wealth of Information: Family Protection Strategies

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.

Recommended Changes to Anti-Trust Regulations on Competitor Collaboration May Help Advisors

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.

Benefits Beyond the Plan: Interns, Habit Setting, and Retirement Readiness

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.

Helping Gen Z Employees with Financial Literacy: A Guide for Plan Sponsors

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.

UX’ing Me a Question? Using User Experience Techniques in the Rise of Retirement Dashboard Recommendations

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.

Emotional Investing and Alternative Investments: Is Education the Answer?

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.

Marketing to MEPs

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.

Unknown Unknowns after Loper Bright? Flexibility as the Best Fix

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.

One Fee Doesn’t Fit All: Recordkeeping Suits Dismissed Based on Lack of Benchmarking Details

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.

Unlocking the Power of 529 Plans: A Guide for Plan Sponsors

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.

Identity crisis: Verifying Personal Details and Employee Form Fatigue

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.

New findings from FINRA: Investors Show Affinity for Advisors over AI Generated Research

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.

Finfluencer Risks

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.

Risk Horizon: New Tools for Monitoring and Managing Investment Risk.

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.

Enforcement Actions and Litigation: SEC Has a Tough Q2

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.

What to Consider When Turning to Temporary Workers This Season: A 2024 Update

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.

Penchant for Pensions: NIRS Recommendations for Private Pensions May Reflect Change in Underfunding Risks

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.

Unauthorized AI at Work and Cybersecurity Threats

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 Difference of Opinion on the Gender Diversity in Investment Management: Food for Thought

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?

Supreme Court Allows Consumer Finance Protection Agency to Continue, But Congressional Legislation May Curtail Its Jurisdiction

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.

What’s Keeping Small Businesses From Offering Retirement Plans? Lack of Knowledge of Options

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.

Diversifying Through ESG Investments

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.

Follow These Tips: New Strategies to Refresh Your Arsenal of Prospect Follow Up Communications

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.

Hardship Withdrawals and Participant Understanding

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.

Quarterly Plans: Fiduciary Checklists in Smaller Bites

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.

The State of Student Loans: Revisiting Student Loan Payment Matching as a Recruitment Tool

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.

Common Cash Concerns: What Signs Can Be Found in the Guidance for Secure 2.0 Act Sections 304 and 348?

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.

Navigating Benefit Cutbacks: 8 Tips for Communicating Effectively with Employees

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.

AI and Benefits Policy Management: Guidance on the Use of AI

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.

EBSA Enforcement Data: Are Enforcement Numbers Up?

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.

Everyone’s Talking About Aging, So Why Can’t Advisors?

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.

Post-Hughes, Mid-Lawsuit Frenzy: Keeping Records on Your Recordkeeping Fees May Be Crucial

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.

Trend Watch: Pension Popularity

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.

Supreme Court Weighs Power of Agencies Like the DOL to Impose Penalties without a Jury

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.

Divesting Inflation Demographics: Consumer Studies May Show It’s More Than Inflation Irking Investors

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.

New Year, New Rules: Fiduciary Duty Rules and Independent Contract Rules May Put Advisors in a Pinch

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.

Major Overhaul of Financial Regulations Coming? Supreme Court Considers Chevron Change

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.

Need a Proposal?

Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering.  Through this examination, we can help you optimize the service you receive.

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