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Robo-advisor Integrates Financial Wellness into Retirement

Robo-Advisor Integrates Financial

Robo-advisor Integrates Financial Wellness into Retirement

Robo-advisor integrates Financial Wellness programs by getting a bit more, personal.  The personal touch comes from innovation by BrightPlan, a Silicon Valley fintech firm.  BrightPlan is coming to market with a new digital technology product that will provide financial wellness for retirement plan participants.

InvestmentNews recently covered BrightPlan’s new technology product release. The Robo advisor, BrightPlan Coach, provides financial wellness via a personalized financial plan for each employee, as well as provides ongoing guidance on spending, financial goals, investing, debt management, estate planning, and insurance.  The product is designed to enhance financial wellness programs through integration with workplace retirement plans.  Logically, then recommending funds from the employer’s 401(k) plan that best fit the employee’s financial situation. The Robo advisor can even provide advice for investment accounts the employee may maintain at outside institutions. Participants can also access human advice via a registered investment advisor (RIA) – of which BrightPlan is a minority stakeholder.

To give participants reports into their progress, BrightPlan Coach uses a 500-point system. This system reflects participants’ overall financial wellness as well as changes in the market. The technology also recommends steps employees can take to improve their financial wellness score. BrightPlan calculates a similar score for employers to help them identify opportunities to offer financial wellness education, promote under-used benefits or offer new benefits. Such metrics could be useful in helping employers measure the effectiveness and return on investment for financial wellness offerings, while also justifying the cost.  The cost of financial wellness programs is something that employers have struggled with to date despite their popularity and widespread adoption.

In addition, the technology allows employers to invest more deeply in their employees via financial wellness programs. BrightPlan Coach is offered as an employee benefit that’s paid for by the employer. BrightPlan negotiates fees on a per-case basis, according to the company.

BrightPlan is focused on providing financial wellness and planning benefits, not on providing or administering 401(k) plans. That said, it does compete against other financial wellness program providers. The 401(k) financial wellness space is crowded, and there is currently a land grab for providers looking to differentiate themselves. According to InvestmentNews, “Facing low-cost digital competitors and a squeeze in traditional 401(k) fees, many recordkeepers and retirement plan sponsors are also using technology to introduce financial wellness programs.”  Technology and artificial intelligence are becoming ever more present in the financial services space, particularly when orbiting the financial wellness sphere.

According to a recent study by Cerulli Associates, implementing financial wellness programs can be expensive, and employers are challenged to justify the cost.  It is important to know how the Robo advisor integrates. However, greater transparency and measurable results will help employers to address this challenge. BrightPlan may help employers to overcome the cost hurdle with its hybrid Robo-advisor, BrightPlan Coach.  It is certainly an interesting way of using financial wellness technology.  Ideally, the solution may help employees to improve how they manage their own personal finances, thus boosting their retirement readiness. Time will tell if BrightPlan’s financial wellness technology succeeds. It is definitely worth the effort for employers to monitor the financial wellness offerings, observe how they evolve and recognize who are the early adopters.

Steff Chalk

Steff Chalk

Managing Editor at 401kTV
Steff C. Chalk is Executive Director of The Retirement Advisor University, a collaboration with UCLA Anderson School of Management Executive Education. Steff also serves as Executive Director of The Plan Sponsor University and is current faculty of The Retirement Adviser University.
Steff Chalk
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