Beyond Retirement Advice

More companies are starting to offer their employees a range of financial planning assistance to keep up with the competition and keep their workers happy.

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Remember all the agonizing a decade ago, when defined contribution plan sponsors were just beginning to move beyond the basic ABCs in their employee educational material: Did they dare include general principles, such as the concept that younger people should invest more in stocks than fixed income? Would that be seen as giving advice, not education? Would the company be legally liable if a 25-year-old employee invested in a stock fund and then lost money?

Those were the days.

Now look how far many employers have come. Not only do they provide a range of outright retirement planning advice — from online strategizing tools to managed portfolios to one-on-one sessions with a financial counselor — but some are even starting to offer their work forces financial planning assistance that has nothing to do with a 401(k) or any other company benefit.

Andy Sieg, head of retirement and philanthropic services at Bank of America Merrill Lynch, says that up to one-third of his firm’s biggest clients sponsor programs to help employees with issues such as debt management, budgeting and personal financial management. “It’s a daily discussion that we’re having with our large clients,” he says.

For instance, companies might arrange periodic Webinars or monthly meetings at local worksites, each lasting one to one-and-a-half hours. The benefits page of the company Website might have information and links about trends in health care.

Personal budgeting is a hot topic in January, according to Sieg, while in the fall, an employee’s fancy apparently turns to philanthropy. Debt management is always in demand. And all of this assistance is usually free to the employee.

Companies are doing this for pretty much the same reason they put in any HR benefit: to keep up with the competition and keep their workers happy.

Indeed, a recent Merrill Lynch survey might spur this trend. In a survey of 1,000 so-called affluent Americans — defined as having investable assets of at least $250,000 — in June, 21 percent said they would like their employer to give them “greater financial education and advice about issues beyond retirement savings,” such as budgeting, handling debt, and saving for college. Also, 26 percent want their company to provide access to “a financial professional who can offer personalized advice.”

Anyway, employees are apparently already doing their finances on company time, so they might as well do it with expert guidance. Seventeen percent of those surveyed confessed that they conduct fully half of their personal finance chores at work, including fiddling with their portfolios, researching new investments, and paying bills.

So companies will now get involved deeply into their employees’ personal lives, helping, them plan out many aspects of their finances? Sieg admits that this new HR strategy might look somewhat like — horrors! — the much-maligned “corporate paternalism” of traditional pension plans. But he insists it’s different. “It’s certainly toward a more paternalistic feel,” he says, ”but with a modern twist, because it’s still very much about individual responsibility, being in control of their financial lives and making their own decisions.”

If Corporate America is no longer going to pay for its work force’s retirement, it can at least pay for the help its workers will need to pay for their own retirement.

Fran Hawthorne is the author of the award-winning “Pension Dumping” (Bloomberg Press) and “Inside the FDA: The Business and Politics behind the Drugs We Take and the Food We Eat” (John Wiley & Sons). She writes regularly about finance, health care, and business ethics.

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