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?
