The package combines fiduciary guidance and investment due diligence with personalized communications and investments.
Financial advisors working with Envestnet can now offer their business owner clients access to a streamlined 401(k) plan solution with fiduciary oversight and investment support.
The new Envestnet Retire Complete platform was developed in collaboration with Empower Retirement, and it was first previewed in May by Envestnet CEO Bill Crager at the firm’s 2023 Elevate Conference in Denver.
At the time, Crager said the partnership would see Empower integrate its administration technologies and asset management capabilities within the Envestnet ecosystem. The ensuing partnership, Crager said, would expand both firms’ distribution opportunities while also providing “a powerful solution for wealth managers who have traditionally shied away from serving plan sponsors and participants.”
Why it matters: Some seven months later, the platform is now officially live, and it features an approach known in the benefits arena as “3(38) fiduciary investment management.”
In a statement announcing the platform launch, Sean Murray, head of retirement for Envestnet, says the 3(38) fiduciary service and investment selection methodology, along with Empower’s retirement services market leadership and scale, have “created an opportunity for advisors to help businesses deliver value to their employees — while minimizing fiduciary concerns and service challenges associated with running a retirement plan.”
“Together, we can enable more organizations to offer a competitive benefits package for attracting and retaining top talent,” Murray suggests.
What to know: According to the announcement, Envestnet’s fiduciary service is complemented by its proprietary SCORE methodology designed to evaluate and monitor investment options in qualified retirement plans.
The SCORE methodology applies quantitative and qualitative factors such as style, cost, organization, risk and execution when evaluating designated investment options.
Other features mentioned in the announcement are a “seamless participant experience” that uses Empower’s digital capabilities and presents a “highly personalized experience that can integrate the elements of any individual’s financial picture to help them better understand their current situation and future needs, driving increased financial confidence.”
Plan participants can also download the Empower app to access their personalized account dashboard on mobile devices, and they benefit from customized communications and a broad suite of diversified investment options.
What they’re saying: As both Crager and Murray told ThinkAdvisor in May, wealth advisors who have traditionally referred out 401(k) plan business have a strong and growing incentive to rethink that approach.
As a result, the competitive barrier that has traditionally existed between the plan advisor market and the wealth management space is blurring, and it may no longer make a lot of sense for wealth advisors to reflexively refer out all 401(k) plan business.
Pictured: Bill Crager