84% of workers would like to see more personalized investment options in their 401(k)s, according to Franklin Templeton. Franklin Templeton Head of Institutional Retirement and Strategic Growth Kevin Murphy joins Wealth! to discuss how Americans are thinking about retirement.
“The recurring theme we hear each and every year is that personalization has now become… absolutely non-negotiable,” Murphy explains. “So the way I look at that when I’m talking to employers is this is a talent retention tool, and a talent attract and retain key talent, especially the Millennial generation because they need and they want more personalized benefits,”
He states that Millennials prefer personalization as they balance several financial goals, from paying off student loans to saving up to buy a home. He explains, “It’s really about having multiple goals, having a plan in place, making retirement a part of the conversation — not the only conversation. And that’s another thing we talk about, is we think it’s time to retire the word ‘retirement.’ It’s really more about financial independence.”
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This post was written by Melanie Riehl
Video Transcript
You could customise anything nowadays.
But how can you customise your investments?
84% of workers would like to see more personalised investment options in their 401 ks.
This is, according to Franklin Templeton, to discuss the importance of personalization and how it can help you achieve your wealth goals.
Kevin Murphy, Franklin Templeton, head of institutional retirement and strategic growth is here.
Kevin, great to see you.
Thanks for coming in the studio.
I mean, obviously, this is something that needs to be customised.
Needs to be personalised because everybody has different personal finance goals and a different perhaps horizon that they’re looking at as well.
But as it relates to that employer employee relationship, where do you hear more employees calling for flexibility as well?
Well, yeah, That’s, uh, that’s the research that you referenced and and nice to be here.
Thanks for having me.
Um, we’ve done it for four years now, the voice of the American workplace.
And really what we the catalyst was we wanted to validate we We had a feeling our clients had a feeling, uh, how people you know, how participants and how employers are feeling about their overall benefits.
So we set out on a project with the Harris Poll in partnership to really dig into how employees are feeling about their benefits.
And this was our fourth year.
Uh, the recurring theme we hear each and every year is that personalization has now become non negotiable, absolutely non negotiable.
It’s what the the the stat that you mentioned in the opening that is absolutely the case.
Uh, and even more so, another 80% um, also want more personalised across their entire benefit stack, not just their 401k plan.
So the other stat I reference often is that 45% of millennials have admitted to quitting their job because of the low quality of benefits.
So the way I look at that when I’m talking to employers is this is a talent retention tool and a talent, uh, attract and retain key talent, especially the millennial generation, because they they need and they want more personalised benefits.
You know, I was just about to ask you the the difference of the Delta between generations here because Gen. X was essentially and has come to be known as the the 401 one kind of test case 401k test case generation.
But how has personalization and some of the requests changed generation over generation based on what we’re seeing with millennials And now what we’re seeing increasingly with Gen Z and then eventually the next generations that come in the future too.
It’s a great question because over 10,000 boomers a day are turning 65 right now.
Uh, and these retirees, if they had access to a 41 K plan, were the early 401k.
Uh, so then you you get to the next generation and for me personally, I’m a gen X. Um, and every day since my first day of work and I also work in the financial industry, it was contribute as much as your four.
OK, you’re gonna be sorry if you don’t.
And that’s not how this generation thinks this generation thinks.
OK, I need to think about retirement kind of sort of.
But I need the here and the now, and that’s really what personalization to us means and what what we’re preparing for as a firm is to really meet each individual according to their life stage what’s important to them.
If they’re in their twenties, they might be interested in paying off student loan debt.
They might be interested in buying a car, buying a house.
It’s OK to plan a nice vacation.
We we have to live our life as well.
But it’s really about having multiple goals, having a plan in place, making retirement, a part of the conversation, not the only conversation.
And that’s another thing we talk about is we think it’s time to retire the word retirement.
It’s really more about financial independence.
It’s about financial independence, meeting individuals along their journey and leveraging technology to deliver it through the workplace in a very convenient and, uh, simple way.
It’s great that you mentioned the technology.
That’s exactly where I was about to go next, because I think a lot of people just don’t even know the access points sometimes or even if you change jobs where things carry over, how are we simplifying the the delivery of making sure that someone has full insight or full vision into how they’re tracking up against their goals?
It’s a great question, and we’re It’s changing at a rapid pace now.
The legacy.
You know, we’re breaking through some of the legacy narrative uh, we think that you need to make it very convenient.
You need to make it very simple, and you need to make it personalised.
And that’s why we believe in the voice of the American workplace has has helped us with this, and we believe the the really the the workplace has become the financial epicentre for most working Americans.
And there’s a few reasons why one the big one is the trust factor.
There’s an inherent level of trust between the employer and the employee.
Employees might not always like their employer, but they trust their employer.
They have sensitive data.
Um, you can, uh, this group of employees, the average US worker, are not traditional targets of our wealth management, uh, industry, you know, they’re not high net worth households.
Their primary savings vehicle is largely going to be their 401k plan, and the third is the big one.
That’s data.
We have the data.
We can use the data.
We’re seeing great advancements in technology, delivering it through the workplace in a very convenient, simple and personalised way.
You mentioned that this can even be a talent acquisition or talent retention, uh, type or hold the importance of talent, acquisition and talent retention as well.
In this personalization and customization who from an industry or sector perspective is doing this well, hitting it out of the park and and allowing this personalization so that they’re not losing employees, uh, in in droves.
Yeah, uh, we see, honestly, I would maybe reframe the question.
They are very, uh, forward thinking, Innovative advisor, financial advisor that specialise in working with corporate retirement plans have started to implement solution.
Uh, financial wellness is a very largely used term, but it’s it’s really mis defined.
Um, if you if you use an Internet search and you put in financial wellness, you’re gonna get 700 million hits in less than a second.
It’s not a content problem.
It’s an engagement problem.
So, really, the advisers that are out in front of this engaging with their employers, uh, engaging with their employees, leveraging technology, they’re the ones that are truly moving the needle because they’re meeting individuals where they are on their life stage.
Kevin Murphy, who is Franklin Templeton, head of institutional retirement and strategic growth.
Thanks so much for taking the time here with us today.
Kevin.
Thanks for having me.
Absolutely
