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Add a Friendly Face to Your Employees’ 401(k)s

Why some of your 401(k) plan’s participants may need a little extra advice—and how to give it to them.

By Betterment Editors

Published Jun. 01, 2023

Illustration of financial advisor helping man

Add a Friendly Face to Your Employees’ 401(k)s Jun 1, 2023 8:00:00 AM Why some of your 401(k) plan’s participants may need a little extra advice—and how to give it to them. Before our arrival more than a decade ago, the finance world typically worked one way for everyday investors: you had a “guy.” In rare cases—much too rare—it was a “gal,” but that’s a story for another day. This advisor may or may not have been a fiduciary, meaning someone legally obligated to act in your best interest. But if you wanted to invest, you had to go through them. And they likely charged a hefty sum for their services, given that today’s average fees for a traditional financial advisor are still more expensive than alternatives like Betterment. Something about this dynamic didn’t sit well with us, so we flipped the relationship on its head. We put our team of experts to work behind the scenes. Traders and tax experts, behavioral scientists and “quants,” they all worked together to infuse technology with their investing insights, leading to a piece of software that served up personalized advice and automated features at scale and for a fraction of the cost of what most investment firms charged. While plenty of investors—800,000 and counting—utilize our approach to automated investing, some still prefer to add a human advisor to that experience, someone to coach them through their money moves face-to-face. And you know what? We not only think that arrangement is okay, it sums up our investing philosophy well: automate what you can, and leave the rest to humans. The implications for your company’s 401(k) plan All of the above holds true for your employees and their 401(k)s. You can give them an intuitive platform to automate their retirement savings. You can match a percentage of their contributions as an incentive. You can share a robust library of educational resources to help explain investing. Some will thrive in this scenario, some will struggle, and some may not bother to sign up at all. So what are you, the plan sponsor, to do? Well, you can add Financial Coaching to your Betterment at Work 401(k), giving your employees access to professional financial advice from our team of advisors. These experts—all fiduciaries, by the way—add a warm touch to the cold arithmetic of retirement saving. They can help your employees not only maximize their 401(k)s, but sort through the rest of their financial lives. “You know, the biggest emotion I sense from clients after a session isn’t excitement; it’s a sense of relief,” says Corbin Blackwell, one of our advisors. “They’re smart people, but investing is scary. Sometimes you just need reassurance that you’re on the right track.” Or sometimes, your employees really do have unusual life circumstances that make for complicated financial decisions. The sort of scenarios that aren’t easy to automate. Maybe they’re high earners, for example, trying to weigh the pros and cons of a Roth IRA conversion. In any case, it’s helpful to have an advisor like Corbin available to talk with. Giving your employees this premium resource can help boost your plan’s participation rate and may improve their financial wellbeing. It can also elevate your 401(k) above your competitors. Retirement saving’s role in the recruiting arms race So far we’ve focused on the benefits of Financial Coaching to your existing employees. We haven’t touched on the appeal to prospective employees, the people you’re hoping fill your talent pipeline for years to come. To some of these workers, a 401(k) is an expectation and neither a surprise nor a delight. They’ve seen plenty of cookie cutter retirement benefits in past jobs and none stood out, at least for the right reasons. While some companies consider this business as usual, another box to check in their benefits package, others see an advantage just waiting to be taken. Because let’s be real, what actually stands out: a piece of paper in your benefits packet, or real-time access to an expert like Corbin? Don’t take our word for it, listen to the recruits. We surveyed workers—and 1-in-5 said access to a live financial advisor could entice them to leave their current job. Whether you’re already a Betterment at Work customer or considering becoming one, Financial Coaching carries the potential to differentiate not only your 401(k) plan but your company. It’s a straightforward way to show you care about the financial well-being of recruits and current employees alike.

Before our arrival more than a decade ago, the finance world typically worked one way for everyday investors: you had a “guy.” In rare cases—much too rare—it was a “gal,” but that’s a story for another day.

This advisor may or may not have been a fiduciary, meaning someone legally obligated to act in your best interest. But if you wanted to invest, you had to go through them. And they likely charged a hefty sum for their services, given that today’s average fees for a traditional financial advisor are still more expensive than alternatives like Betterment.

Something about this dynamic didn’t sit well with us, so we flipped the relationship on its head. We put our team of experts to work behind the scenes. Traders and tax experts, behavioral scientists and “quants,” they all worked together to infuse technology with their investing insights, leading to a piece of software that served up personalized advice and automated features at scale and for a fraction of the cost of what most investment firms charged.

While plenty of investors—800,000 and counting—utilize our approach to automated investing, some still prefer to add a human advisor to that experience, someone to coach them through their money moves face-to-face. And you know what? We not only think that arrangement is okay, it sums up our investing philosophy well: automate what you can, and leave the rest to humans.

The implications for your company’s 401(k) plan

All of the above holds true for your employees and their 401(k)s. You can give them an intuitive platform to automate their retirement savings. You can match a percentage of their contributions as an incentive. You can share a robust library of educational resources to help explain investing. Some will thrive in this scenario, some will struggle, and some may not bother to sign up at all.

So what are you, the plan sponsor, to do?

Well, you can add Financial Coaching to your Betterment at Work 401(k), giving your employees access to professional financial advice from our team of advisors. These experts—all fiduciaries, by the way—add a warm touch to the cold arithmetic of retirement saving. They can help your employees not only maximize their 401(k)s, but sort through the rest of their financial lives.

“You know, the biggest emotion I sense from clients after a session isn’t excitement; it’s a sense of relief,” says Corbin Blackwell, one of our advisors. “They’re smart people, but investing is scary. Sometimes you just need reassurance that you’re on the right track.”

Or sometimes, your employees really do have unusual life circumstances that make for complicated financial decisions. The sort of scenarios that aren’t easy to automate. Maybe they’re high earners, for example, trying to weigh the pros and cons of a Roth IRA conversion.

In any case, it’s helpful to have an advisor like Corbin available to talk with. Giving your employees this premium resource can help boost your plan’s participation rate and may improve their financial wellbeing. It can also elevate your 401(k) above your competitors.

Retirement saving’s role in the recruiting arms race

So far we’ve focused on the benefits of Financial Coaching to your existing employees. We haven’t touched on the appeal to prospective employees, the people you’re hoping fill your talent pipeline for years to come.

To some of these workers, a 401(k) is an expectation and neither a surprise nor a delight. They’ve seen plenty of cookie cutter retirement benefits in past jobs and none stood out, at least for the right reasons.

While some companies consider this business as usual, another box to check in their benefits package, others see an advantage just waiting to be taken. Because let’s be real, what actually stands out: a piece of paper in your benefits packet, or real-time access to an expert like Corbin?

Don’t take our word for it, listen to the recruits. We surveyed workers—and 1-in-5 said access to a live financial advisor could entice them to leave their current job.

Whether you’re already a Betterment at Work customer or considering becoming one, Financial Coaching carries the potential to differentiate not only your 401(k) plan but your company. It’s a straightforward way to show you care about the financial well-being of recruits and current employees alike.