Ep 401: One-On-One Advice Through Financial Wellness Programs To (Profitably) Expand The Reach Of Financial Planning with Zack Hubbard
Sep 3, 2024
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Zack Hubbard, Director of Financial Planning and Participant Engagement at Greenspring Advisors, discusses innovative financial wellness programs for 401(k) participants. He shares insights on a three-tiered approach that includes education, personalized advice, and support implementation. Zack highlights the importance of cultivating relationships with employees to generate referrals for wealth management services. He also emphasizes training new advisors to enhance their skills and the critical need for balancing technology with human-centered finance.
Zack Hubbard's three-tiered financial wellness program emphasizes education, one-on-one advice, and implementation to better serve 401(k) plan participants.
The firm achieves high email engagement by personalizing communication strategies based on participant demographics, enhancing the financial wellness initiative's effectiveness.
Outsourcing implementation of financial planning advice allows the firm to maintain a fee-only fiduciary status, ensuring unbiased guidance without conflicts of interest.
New financial advisors gain essential experience through numerous direct client meetings, fostering skill development and confidence for their future advisory roles.
Deep dives
Building a Financial Wellness Program
The financial wellness program developed by Zach Hubbard is structured around three tiers: education, one-on-one advice, and implementation. This model serves participants of 401k plans by first providing foundational financial education, which is crucial for addressing financial literacy gaps. Following education, clients receive personalized financial planning advice tailored to their specific situations, allowing for a more individualized approach. The ultimate goal is to ensure that advice leads to actionable implementation, facilitating a seamless transition from understanding concepts to taking concrete financial actions.
Effective Communication Strategies
The firm boasts impressive email engagement metrics, with open rates exceeding 75% and click-through rates around 40%. To achieve this high level of engagement, they employ targeted communication strategies that involve leveraging participant data to personalize outreach. By segmenting their audience based on age, income, and contribution behavior, they send relevant and timely information that resonates with participants. This approach not only enhances participation rates in financial wellness initiatives but also strengthens client-advisor relationships.
Outsourcing Implementation to Maintain Fiduciary Status
To uphold their fee-only fiduciary status, the firm has outsourced the implementation of financial planning advice, avoiding potential conflicts of interest. This strategy emphasizes the importance of providing unbiased guidance devoid of any product sales. By outsourcing, they maintain the integrity of their advice while still facilitating access to necessary resources, such as estate planning and student loan consulting. This allows the firm to scale their services while ensuring that fiduciary responsibilities under ERISA are honored.
Empowering New Advisors Through Client Interactions
The program aims to accelerate the development of newer financial advisors by giving them direct access to clients through numerous one-on-one meetings. Advisors are expected to conduct around 200 meetings annually, which not only builds their confidence but also deepens their understanding of client needs and concerns. This hands-on approach allows new advisors to quickly accumulate valuable experience, making them more effective in their future roles as fully-fledged financial advisors. The high number of interactions fosters an immersive learning environment, equipping them with the skills necessary to thrive in the advisory field.
Leveraging Relationships for Client Conversion
The firm effectively converts employees into traditional financial planning clients by building trust during one-on-one meetings. As participants engage in discussions about their immediate financial concerns, the firm positions itself as a reliable resource for personal financial planning. When employees transition to new jobs or approach retirement, they are more likely to seek the firm’s services due to the established rapport. This relationship-driven approach not only enhances client retention but also leads to valuable referrals from satisfied employees to their employers.
Challenges in Engagement with Business Clients
A significant hurdle in executing the financial wellness program is achieving buy-in from the top management of participating companies. If decision-makers do not prioritize employee financial wellness, it becomes challenging to encourage widespread engagement among the workforce. The firm must navigate the landscape of corporate culture, seeking out organizations that genuinely value the wellness program. This pursuit of alignment is crucial for ensuring that the services offered reach all potential participants who could benefit from financial advice.
Profitability and Scalability of the Wellness Offering
The wellness offering is designed to be profitable by estimating a utilization rate of about 5% of employees accessing one-on-one advice. Even with this conservative estimate, the program remains financially viable through strategic pricing at the employer level. The cost per employee is structured to allow for sufficient margin despite the potential workload associated with increased interaction. Ultimately, success is determined not only by the immediate financial metrics but also by the long-term relationship-building with clients that leads to increased private wealth referrals as employees transition in their careers.
Zack Hubbard is the Director of Financial Planning and Participant Engagement of Greenspring Advisors, an RIA based out of Maryland that manages $2 billion of private wealth assets under management for 1,300 client households and advises on an additional $5 billion in retirement plan assets. Zack and his firm have developed a financial wellness offering that profitably delivers both self-serve technology and direct one-on-one financial advice to employees of businesses using their fiduciary 401(k) services. This approach not only supports plan participants, but also generates a steady stream of referrals for his firm’s private wealth services.
Listen in as Zack shares how his firm uses a three-tiered approach to fiduciary financial wellness for 401(k) plan participants, comprising of education, one-on-one advice, and implementation support, how his firm develops new advisors by allowing them to have many 'at bats' with retirement plan participants, and how he made the decision to shift from client-facing roles to his current position as a manager.
