Voya Offers SAVVI’s Short-Term Financial Planning Tool

Voya Financial is collaborating with SAVVI Financial, a technology-enabled financial wellness platform, to offer a COVID Relief Planning Assistant designed to help those who have been laid off, furloughed or had their working reduced hours because of the pandemic.

Through its Retirement and Employee Benefits businesses, Voya will offer SAVVI Financial’s COVID Relief Planning Assistant to its workplace clients as an online resource for their plan participants and employees.

“The relief tool helps people make the right choice across a series of goals holistically rather than with one particular product or solution,” Andrew Frend, senior vice president of Product and Strategy for Voya’s Employee Benefits business, tells PLANSPONSOR. “It is uniquely capable of addressing the challenge of choice overload and helping people figure out the right thing to do.”

The COVID Relief Planning Assistant is a targeted experience for those financially impacted by the pandemic who need a short-term plan. If an individual has lost his income or had his income reduced, the solution provides educational resources or an action plan that adjusts his household financial plan by organizing assets, debt, expenses and existing income to create a strategy to help the individual get through the next three to six months.

To begin, individuals will be provided with a link to this online tool by their employer or retirement plan sponsor. They will then be guided through a series of six questions which will gauge how they’re feeling about their overall financial situation, collect key financial household information, determine whether their health care coverage has changed during the crisis and collect other necessary financial and employer information.

If they qualify for COVID-19 relief planning assistance, they will then receive a personalized, short-term financial action plan. It will provide specific guidance on recommended monthly spending cuts and budget changes, specific accounts (savings, health savings accounts [HSAs], retirement, etc.) to access for income shortfalls and potential savings actions to meet longer-term retirement goals. The recommended actions also take into account Coronavirus Aid, Relief and Economic Security (CARES) Act benefits, tax consequences and long-term retirement goals. If a person does not qualify, they will then be directed to educational resources selected by SAVVI.

“This COVID Relief Planning Assistant is a valuable tool to help those financially impacted create a personalized, short-term plan to help manage through their immediate financial needs—without compromising their future financial goals,” says Rob Grubka, president, Voya Employee Benefits.

Steven Merrell, Financial Planning: Finding the right fund (part 3)

This is the third and final installment in my “finding the right fund’ series. In the past two installments, I discussed the importance of good information sources when researching mutual funds. I also shared some of the key metrics I use when evaluating a fund. This week I will show you how to pull it all together using two actual funds: Vanguard’s Total Stock Market Index fund and the Lazard Global Listed Infrastructure Fund.

Before we get into the details, please keep in mind that this is not an investment recommendation. I personally invest in both of these funds, but they may not be appropriate for you given your unique situation.

Let’s start with the fund prospectuses. Reading the prospectuses reveals that both funds have multiple share classes. The Lazard fund has three: Institutional shares (GLIFX), open shares (GLFOX) and retirement plan shares (RLGLX). The Vanguard fund has two share classes: Investor shares (VTSMX) and Admiral shares (VTSAX). The only real difference between the share classes is their cost.

The Lazard institutional shares (GLIFX) catch my eye because they have a much lower expense ratio than the open shares (0.96% vs. 1.21%)—the difference being the presence of a 0.25% 12b-1 fee on the open shares. Digging deeper into the prospectus, I discover that GLIFIX requires a minimum investment of $10,000, while open shares require an investment of only $2,500.

The Vanguard Admiral shares (VTSAX) also catch my eye because they have an expense ratio of 0.04% compared to 0.14% for the investor share class. VTSAX requires a minimum investment of $3,000, while investor shares can be purchased with an investment of $1 or more.

According to the prospectus, GLIFX invests primarily in stocks with a minimum market capitalization of $250 million.  At least 80% of its equity investments will be in utilities, pipelines, toll roads, airports, railroads, ports, telecommunications and other infrastructure companies. I further learn that the manager seeks to hedge a substantial portion of the fund’s foreign currency exposure.

From the Lazard website, I download a copy of the fund’s holdings as of March 31. The portfolio has only 26 investments and all but six are located outside of the United States. I also learn that the fund has 18 percent of its value invested in a short-term money market fund. I can see this is a highly concentrated, actively managed portfolio.

VTSAX, on the other hand, is a passively managed index fund that seeks to deliver returns in line with the overall U.S. stock market. I download its holdings also—all 3,513 stocks—and find nothing to surprise me. Both funds invest in securities that I understand and feel comfortable holding.

We next turn to Morningstar to gain deeper insight into the metrics of each portfolio. For example, GLIFX’s expense ratio of 0.96 percent is high compared to the 0.04 percent ratio for VTSAX. However, Morningstar shows that GLIFX is just about average when compared with other specialty funds. That doesn’t make it a bargain, but at least we know we aren’t way off the market when compared with other funds. VTSAX, on the other hand, is cheap compared to its peers. The average expense ratio for a U.S. large-cap institutional fund is 0.72 percent, almost 20 times higher than VTSAX.

We look at performance and see that GLIFX has consistently performed in the top quartile of its peer group. However, because it owns only 26 stocks, it is high risk and any investment we make in GLIFX must be small—no more than 10 percent of the overall portfolio.

Comparing the upside/downside capture ratios reveals each fund’s price risk. VTSAX has an upside capture ratio of 101 and a downside capture ratio of 105, meaning it is slightly more sensitive to downside moves in the market. With upside/downside capture ratios of 49 and 45 respectively, GLIFX is much less sensitive to market moves overall but has slightly more upside sensitivity.

So, which is the right fund? The answer depends on what you are trying to accomplish in your portfolio. The right fund for you will be the fund that invests in securities you can understand, delivers acceptable returns at a risk level that is consistent with your goals. And, of course, the right fund will do all this with a low expense ratio.

Steven C. Merrell is an investment adviser and partner at Monterey Private Wealth Inc., in Monterey. Send questions concerning investing, taxes, retirement or estate planning to Steve Merrell, 2340 Garden Road Suite 202, Monterey 93940 or smerrell@montereypw.com.

AICPA PFP Conference at ENGAGE 2020 Focuses on Financial Planning During COVID-19

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More Married Women Want to Take Bigger Part in Household Financial Planning, Survey Shows

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An increasing number of married women say they are interested in taking a bigger role in their families’ long-term financial planning, a welcome dynamic as the coronavirus pandemic underscores their particular vulnerabilities.

In a
survey of almost 3,000 women and men across the country who have substantial investment assets, 64% of married women say they have a greater interest in discussing financial planning with their spouse due to Covid-19. Similarly, 63% said the crisis has affected how they think about money, and 51% said they intend to discuss their inheritance plans with their children because of the virus.

To produce its “Own Your Worth 2020” report, UBS surveyed 906 women and 919 men from Jan. 8 to Feb. 28. The report also includes data from 50 women in same-sex marriages and from a March 2019 UBS survey of 883 single men and women who invest.


Barron’s brings retirement planning and advice to you in a weekly wrap-up of our articles about preparing for life after work.

UBS began researching U.S. women’s views on financial planning in 2018, citing research that shows that eight out of 10 women will end up solely responsible for their financial well-being late in life. The two main reasons are that women typically live longer than men and divorces among those ages 50 and older are becoming more common, UBS said in its report.

“The consistent message that we need to get across with couples is that long-term financial planning is just not something that can be delegated,” said Liz Sheehan, a financial advisor at UBS’s wealth-management arm. “You both have to be sitting at the same table for that conversation.”

When women don’t take part in financial planning and then lose a spouse, they often find out that they aren’t as prepared for retirement as they thought, or that their asset allocation is inappropriate for their level of risk tolerance, she said.

The survey shows there is still a way to go between women’s interest in being involved in financial planning and getting them more involved: 49% said they let their spouse take the lead in financial planning, while 35% said they participate equally.

The women who defer to their spouses cite a variety of reasons, with 67% saying their spouse knows more about investing, 60% saying they are too busy with other responsibilities, 59% saying they like not having to worry about financial decisions, and 36% saying the couple’s money feels more like their spouse’s money.

“A lot of that comes down to confidence, not competence,” said Carey Shuffman, head of women’s segment strategy for UBS. “This is not a capability issue between the genders. Many women are more than equipped to take an active role and make these decisions.”

The consistent message that we need to get across with couples is that long-term financial planning is just not something that can be delegated.

— Liz Sheehan, UBS financial advisor

One surprising finding in the survey: Shuffman said that in each of the past three years, the survey has found that married millennial women are more likely than baby boomers to let their spouses take the lead in financial planning. In the 2020 survey, 54% of millennial women said they defer to their spouses, compared with 39% of baby boomers.

Those figures diverge from expectations before marriage, when most single millennial women say they expect to play an equal role in financial planning if they get married. The survey found that 88% want to participate equally or take the lead, and 67% believe that married women rely too much on spouses to make financial decisions.

“Our research again points to the fact that millennials are actually perpetuating the status quo rather than breaking it,” Shuffman said. “This is where the research really shows that intentions and actions are not aligned.…Something sort of happens between single millennial women’s intentions and then the actions that they actually take when they become part of a couple.”

Shuffman suggests couples have monthly meetings at home to discuss budgeting, cash flow, long-term planning, and strategies for dealing with potential adversity, such as one spouse losing a job, falling ill or dying.

“We found that when couples do share in the financial decisions equally, they report greater satisfaction and arguing less about money and feeling more confident in their financial future,” she said.

Write to us at retirement@barrons.com

Financial planning guides for graduates during COVID-19

At the start of 2020, the U.S. economy was generally healthy, with record low unemployment and strong consumer confidence. But amid the COVID-19 pandemic and ongoing uncertainty, unemployment soared, the economy slowed and consumer confidence declined sharply.

Even as the economy slowly begins to restart, new graduates will likely have a particularly challenging time finding jobs this year. That doesn’t mean that it is impossible – but they will need to be smart about the searches and have a few other plans in place.

For those who have loved ones in the class of 2020, we’ve gathered a few tips to share with the graduate:

Be aggressive when it comes to job searching. Looking for a new job is hard, even under the best of circumstances. While your grad may have a lot of talent to offer, the competition will be extra fierce. When looking, they shouldn’t just think about their majors when considering who might hire want to hire them. They should think of all the skills and experiences they have to offer an employer and pursue roles that match. Remind them that their job search could take weeks or months – likely longer than usual in this environment. They can use that time to update their resumes, build up experience through internships and part-time jobs, and network at every opportunity.

Be conservative with spending. First things first – work with your grad to create a budget if they don’t already have one. Help them prioritize and decide where they can cut expenses: cheaper phone plan? Unneeded subscriptions? Lay it all out and make some decisions. Guide them to stop using any credit cards they may have, and try to pay more than the minimum to pay off the balance faster and make it easier to save.

Sign up for health insurance. Not getting sick or injured is not a good health plan – they shouldn’t take any unnecessary chances with their health, especially in this environment. The good news is, as a new graduate, an adult child can stay under a parent’s plan – even living in a different location – up until age 26. If that isn’t an option, there are healthcare plans through www.healthcare.gov that they can explore if they don’t have coverage through a job. Note that individual or short-term, limited-duration health insurance plans could be cheaper in the short run but can be extremely costly over the long run if the holders do get sick.

Know the rules of student loans. For most federal student loan types, after graduating or leaving school, your grad has a six-month grace period (sometimes nine months for Perkins Loans) before payments are due. Because of COVID-19, the U.S. Department of Education is now suspending payments on most federal student loans from March 13, 2020 through Wednesday, Sept. 30. No interest or penalties will accrue on loans during this time. Normally, for most loans, interest still accrues during any grace period. After Sept. 30, this payment suspension and interest waiver will end.

That said, if your grad is able to make payments during this period, they should. If they can afford it, the payments they make will go toward the principal balance, reducing the total amount they pay and helping pay off the loan faster. But, be sure to encourage them to check with their lender.

If your grad was fortunate enough to have secured a job and have a steady income, make sure they are prioritizing saving for their future. If their company’s retirement plan offers a 401(k) match, they should be contributing at least up to the maximum match offered to ensure they aren’t leaving easy money on the table. It is also important that they factor saving for an emergency fund into their budget. This fund should ideally cover three to six months of essential expenses, but any amount they are able to set aside and save helps. Finally, if possible, they should also consider opening a separate IRA to further safeguard their futures.

We recognize these are uncertain times and the way ahead may look quite different. Don’t be discouraged; instead, exude determination, persistence, energy, enthusiasm and optimism to create a successful path forward.

Mark E. Engberg, CFP, is a Charles Schwab independent branch leader located in Rehoboth Beach. A Delmarva native, Engberg has more than 20 years of experience helping clients achieve their financial goals. For more information, call 302-260-8731 or go to www.schwab.com/rehobothbeach.

3 Questions: LeCount Davis on the gap in financial planning for diverse individuals

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As coronavirus muddies college planning, 529 plans can help

How do advisors help clients plan for college when its value is unclear during the coronavirus-era of virtualized learning?

“We have a lot of parents who haven’t decided whether or not to send their kids to college this fall, which is crazy, since school starts in, what, a month?” says advisor Ann Alsina of CovingtonAlsina in Annapolis, Maryland.

In some cases using tax-deferred 529 plans may help clients navigate some of the uncertainty, especially with the passage of of two recent federal acts: the SECURE Act, federal spending legislation that includes provisions for retirement savings that passed in December, and the CARES Act, which became law in March to help Americans weather the pandemic. The changes are among a wide array of options offered by 529 plans that clients may want to reconsider now, advisors say.

The SECURE Act allows 529 funds to pay $10,000 toward a student’s college loan debt — or a parent’s debt, for that matter — on a one-time basis, among other benefits. The CARES Act permits any family member who funds a 529 to take tuition reimbursements from colleges where students have elected not to enroll due to impacts of COVID-19, says college planning specialist Deborah Fox of AdvisorTouch in San Diego, California.

“The majority of advisors don’t understand how much complexity there is [in 529 funds] and how much of a positive difference they can make for their clients,” says Fox, who trains other advisors in college planning. Some students enrolled in universities with high tuition bills are opting to attend community college instead for the first year or two, advisors say. In such cases, Fox often urges clients to pay the lower cost of community college out of pocket.

This allows families to funnel more savings into 529 accounts over a longer growth horizon, she says. In a down market, it may make sense to avoid taking distributions at a loss.

In such cases, students can take out loans for the first years of college and use 529 proceeds to pay off up to $10,000 of that debt in a later year, Fox says.

The $10,000 threshold may sound modest when stacked up against expenses at top-dollar institutions, says Fox, but it’s not limited to just one child. In fact, there’s no cap on how many kids in a single household could benefit from the one-time pay-off provision.

Thanks to the CARES Act, families can get tuition refunds if their children opt to skip college this fall, says Deborah Fox, a college planning expert with AdvisorTouch in San Diego.

“For a family with three kids, that’s $30,000” in reduced debt, Fox says. “That’s a real benefit.”

Families who paid tuition before in-person classes were canceled and want a reimbursement from their 529 plans, the $2 trillion CARES Act allows families to get the money back from universities, Fox says.

However, to avoid paying tax on a non-qualified distribution, plus a 10% tax on any gains, it must be redeposited into the plan for the same beneficiary within 60 days.

At that point, Alsina sometimes advises parents use funds for a variety of other expenses under the SECURE Act. For example, she says, families can tap the money for private school tuition for younger children, up to $10,000 per child per year. Under the rules of 529 funds offered in more than 30 states, Fox says, that amount also can be used to reduce taxable income that year for parents or grandparents, or whichever family member opened the fund.

Where clients pulled out college savings 6/2/20

Alsina advises clients to deposit the cost of a child’s private school tuition into the 529 plan and then withdraw it the same year.

“Normally you would say, ‘Why would you want to use your 529 for schools now?’ ” says Alsina, who adds parents would otherwise access the investments after years of compounded, tax-deferred growth. But, she says, “being able to run your private school tuition, at least up to $10,000 [through the fund], does give you a tax break.”

Given that rules governing 529 plans vary by state, advisors should always check to ensure that this advantage, and any others, are covered by that particular plan, says LPL Financial advisor Irene Berner of Berner Financial Services in New Paltz, New York.

Berner cautions that families should keep watch of the rules and regulations that govern all 529 plans and how they differ state-by-state.

“They could change at any time,” she says.

Edward Jones technology strategy for growth

There were some hard questions Frank LaQuinta had to answer when he took charge of Edward Jones’ information systems division in 2018. What tech is best for financial advisors to grow their business while keeping data safe from cybercriminals? What next-generation tools will planners need tomorrow? And do they have what they need to stay a step ahead of consumer preferences?

After taking stock of the tools and platforms the firm’s 18,000 financial advisors used, LaQuinta spearheaded a $500 million “digital acceleration strategy” to ensure its home and branch offices have what they need.

Edward Jones is consistently ranked at the top of J.D. Power’s advisor satisfaction index, thanks in no small part to its technology. Financial Planning spoke with LaQuinta about the firm’s technology roadmap, what’s driving the digital acceleration strategy and what impact the coronavirus pandemic is having.

The following has been edited lightly for length and clarity.

Edward Jones says it’s spending $500 million on a “digital acceleration” initiative. What makes this different from competitors’ programs?

LAQUINTA: So the business digital acceleration strategy is much more broad than just a pure technology strategy. It’s an enterprise strategy to modernize and simplify all of our capabilities.

This is an effort to create great productivity for our home office and to continue the high quality experience for our branch teams, but also really drive towards the client experience. When we think about ways that we can differentiate ourselves, it’s providing an unmatched client experience.

Really getting that right is a source of competitive advantage.

It sounds like a pretty far-reaching program.

LAQUINTA: It’s working more in an agile approach to how we test and learn, and how we can get product and capabilities into the hands of the home office, the branch teams and the clients so they can experience it, give us feedback and we can test more along the way.

What is the business motivation driving the digital acceleration strategy? Is it to increase wallet share, attract new clients, or for advisor recruitment and retention?

LAQUINTA: It is 100% providing human-centered, complete wealth management to tens of millions of clients. We’ve got 7 million clients today and making a meaningful difference in their lives, but there are 42 million who we seek to serve.

Where are you at in that strategy now, and what’s next?

LAQUINTA: When you think about how we help our financial advisors continue to not only build their businesses but also help existing clients across the life moments that matter, especially now, it’s really providing virtual business enablement. Everything from a LinkedIn sales navigator to our financial advisor matching, which allows a prospect to match with a financial advisor who best fits their personal situation, to providing interactive tools like online quizzes to help a prospect and advisor get to know one another.

Also on the horizon is a digital vault which will provide a secure digital solution for clients, prospects and an advisor to collaborate in a different way, share information, store key documents and things like that.

With this sort of big initiative, is Edward Jones playing catch-up to anyone else in the industry?

LAQUINTA: We believe that we have the industry-leading platform from an advisor perspective. Our strategy is really focused completely on creating that unique and best-in-class client experience, and that is a combination that differentiates us.

Everyone in the industry is investing in technology and talking about client experience, so where do you see the opportunity to differentiate?

LAQUINTA: The expectations of consumers in general has risen and is drastically changing, and so the ability to augment that person-to-person relationship with a great technology is paramount to the success.

Can you share any specific areas of technology that Edward Jones is examining?

LAQUINTA: [Consumers] want to blend their personal and professional lives together. They use the tools today — the iPhone, the iPad, etc. — and that’s the level of expectation that they have. So the user experience is of paramount importance, and that drives us from a digital perspective.

But then you also talk about the use of cloud technologies, and everything from our use of collaboration tools within the home office and extending that out to the branches. Having secure access to information anytime, any place, anywhere increases that level of productivity.


We focus on continuing to build out our mobile capabilities and also continue to modernize our application infrastructure so that we can provide the best-in-breed capabilities in support of that experience.

How has the coronavirus pandemic influenced the way Edward Jones advisors are using technology?

LAQUINTA: Remote work for home office and for the advisors is really just a fact of life now. Our ability to use the cloud, virtualization and web conferencing types of technology was critical before, and it’s even more critical now.

Has Edward Jones felt a need to adapt or evolve its strategy with this “new normal” we live in?

LAQUINTA: It’s in lockstep with the overall strategy … The way I look at that is it actually accelerates what we’re trying to do because the need is paramount.

Your brother (or sister or mother) is asking for money. Now what?

Carrington recommends a tight cap on dollar amounts. “If you get a call that so-and-so can’t make rent this month, and you have $35,000 in emergency funds and the rent is $2,000, you could draw a red line where you say, ‘I can’t get below $25,000 in emergency funds, so I can afford to help you another four months if you need it, but that’s as far as I can go,’” he said. “If you have that kind of conversation, you’re not in the position where you get a call one day and you have to abruptly say, ‘I can’t help anymore.’”

Amid uncertainty, financial planning clients stick with long-term plans

The majority of CPA financial planners’ clients remained confident in their financial plans despite the economic and market uncertainty of recent months, according to the latest AICPA Personal Financial Planning Trends survey.

The vast majority (97%) of CPA financial planners said they had made changes to clients’ financial plans in response to the COVID-19 pandemic. However, they reported that a relatively low percentage of their clients were making such changes. The CPA financial planners who made changes reported that, on average, only 30% of their clients had altered their financial plans in response to the pandemic.

More than three-quarters (77%) of the respondents whose clients’ plans had changed said that the changes made were minor. Twenty-three percent said the changes were substantial.

A total of 870 CPA financial planners responded to the survey, which was fielded May 5–26.

Changes in investment allocations was the change CPA financial planners most often saw clients make to their financial plans in response to the pandemic. Sixty-two percent of CPA financial planners said clients had updated their investment allocations. Fifty-nine percent said they saw clients alter their spending decisions, and 43% said they saw changes to clients’ tax strategies.

Other ways CPA financial planners saw clients’ plans change included changes to:

  • Retirement accounts (Roth IRAs, IRAs, and qualified plans) (41% of planners saw this change)
  • Retirement income drawdown (33%)
  • Debt management (32%)
  • Estate planning (20%)
  • Health care decisions (12%) 

The changes that CPA financial planners said they or their clients were most likely to make to their investment portfolios during the pandemic included rebalancing their portfolios (57%); buying or increasing their stake in equities (40%); and selling or reducing their stake in equities (31%). Thirty-nine percent of CPA financial planners said they or their clients performed tax loss harvesting, and 35% made Roth conversions. Four in 10 (41%) said they and their clients had made no changes to investments.

With financial plans built for the long term, major adjustments shouldn’t be necessary, said Paula McMillan, CPA/PFS, CGMA, a member of the AICPA Personal Financial Specialist Credential Committee. “Advisers who know their clients well and had already been doing the appropriate level of planning have been able to focus on identifying strategic opportunities” rather than significant changes, she said. “After all, part of the reason we plan is because you do not want to be trying to fix the airplane as you are flying through the air.”

Speaking with CPA financial planners reduces clients’ anxiety

CPAs have been a calming influence during the COVID-19 crisis and have helped clients spot opportunities and make sense of the impact of new legislation.

Most CPA financial planners (80%) said that, due to the pandemic, clients were more anxious or stressed than usual about their financial plans prior to their first conversation with them. However, 62% of the CPA financial planners who said their clients experienced increased stress and anxiety during the pandemic said those clients felt more confident about their financial situation after speaking with them.

CPA financial planners report their communication with clients has increased since the pandemic started. Three-quarters (75%) of respondents said they have spoken with clients more often since the pandemic took hold. Nearly half of all respondents (45%) said they have had significantly more contact with clients than normal.

McMillan advocated reaching out to clients early and often. “When you’re proactive, they know you’re looking out for them,” she said. Each week, she said, her firm each posts one video featuring advisers discussing investments and a second video on more general topics related to the pandemic. The firm also published a recipe book for clients sheltering at home.

Navigating new legislation

CPAs were also actively involved in helping clients understand the provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136. The vast majority (90%) of CPA financial planners said they had been called on for advice on Paycheck Protection Program (PPP) loans, while 66% provided guidance on other small business loans made available through the act. Seventy-nine percent gave advice on economic impact payments — or “stimulus checks” — while the same percentage (79%) advised on opportunities created by the postponement of tax filing and payment deadlines. Half (50%) advised clients on filing for unemployment compensation.

The results demonstrate that recent events have given CPAs the opportunity to underscore their commitment and value to clients. “This has been a time to show clients that you’re a thought leader,” McMillan said.

Anita Dennis is a New Jersey-based freelance writer. To comment on this article or to suggest an idea for another article, contact Courtney Vien, a JofA senior editor, at Courtney.Vien@aicpa-cima.com.