Cryptocurrency and ESG Still in a Generational Spotlight

401k Plan FeesCryptocurrency and ESG Funds have come a long way over the last few years.  But are they “where they need to be?

Cryptocurrency and ESG funds in 401(k)s have garnered a lot of controversy in recent years. However, younger generations, especially millennials and Gen Z, want these investment options in their workplace 401(k) plans.  This creates challenges for employers to innovate on their retirement benefits, but the challenges aren’t insurmountable.

Schwab Retirement Plan Services’ annual 401(k) retirement survey found that Gen Z and millennials are more likely than older generations to invest in cryptocurrency and use online trading apps.  It’s good news for employers that younger generations are engaged and willing to save for the future, however, it presents challenges when it comes to offering appropriate advice and guidance, according to Nathan Voris, Director of Investments, Insights and Consultant Services for Schwab Retirement Plan Services, who was quoted in a recent Employee Benefit News article summarizing the survey results.

According to Mr. Voris, “Gen Z in particular have investments and savings beyond the 401(k), so if you’re a 401(k) provider or employer, you have to figure out how to provide advice and guidance for someone who has multiple buckets of money.” He continues, “That can be more complex.”

Also good news for employers, is that they have a variety of ways to reach Gen Z and millennial employees.  This demographic is more likely to use financial wellness tools than their older counterparts.  They’re also more likely to seek out personalized advice from a financial advisor.

According to the Schwab survey, 83% of Gen Z and millennials want personalized advice, compared to 67% of boomer employees.  Additionally, Schwab found that, for 70% of employees, it’s important that the investment options offered in their 401(k) plan match their personal needs and values.  This includes cryptocurrencies and ESG, or environmental, social, and governance funds.  ESG funds are often referred to as “socially responsible,” “sustainable,” or “impact” investments.  Today, workers across all generations are seeking to invest in funds that focus on factors such as climate change, social justice, gender equality, and similar issues.

However, Mr. Voris observed that employers have a long way to go to meet those needs.  He advised employers and providers to think outside the box when it comes to traditional ideas of retirement and savings.  Offering comprehensive financial wellness programs that include advice and guidance on cryptocurrency and ESG funds and how to incorporate them into a holistic retirement planning strategy can be an effective way to boost workers’ financial confidence, Mr. Voris noted.


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