The Financial Flash

At-a-glance News for Advisors

feeshidden290Nearly 75% of Americans do not know how much they are required to pay in fees to manage their retirement accounts, according to a February 2021 survey commissioned by Maryland-based investment management firm Rebalance. In fact, 57% of Americans surveyed falsely believe that they pay either no fees, or very low fees, to maintain their retirement investment accounts. What’s more, nearly one-quarter don't even know how much they pay in fees. In actuality, everyone with a retirement account, such as a 401(k) or IRA, pays fees. According to the 21st edition of the 401k Averages Book, the average employee working for a small business pays 2.22% per year in plan costs.

ecodown290Americans believe COVID-19 caused the worst economic downturn, but are now optimistic about their finances, according to the most recent MassMutual Consumer Spending & Saving Index. “Surprisingly, nearly seven-in-ten (69%) Americans revealed that they are optimistic about their current financial outlook and nearly one-third (30%) are more optimistic compared to previous economic downturns,” MassMutual said in a late-March statement. This is despite the vast majority (77%) agreeing that the health crisis caused the worst economic downtown in their lifetimes. Saving has been difficult with 49% of survey respondents saying they have saved less than $500 in the past three months, and 40% of those who saved less than $500 were directly hit by job loss or a salary decrease.

retire332Similarly, more than eight-in-ten Americans (82%) indicate the events of the past year have had an impact on their retirement plans, according to Fidelity Investments’® 2021 State of Retirement Planning Study, released in late March. One-third estimate it will take them two or three years to get back on track, due to such factors as job loss or retirement withdrawals. “Encouragingly, the vast majority are still confident they’ll be able to retire when and how they want, and 36% are now even more confident in their retirement plan than before,” Boston-based Fidelity noted. “This past year has been a roller coaster, but for those Americans with a retirement plan, it should come as a relief to know the fundamentals remain sound,” said Melissa Ridolfi, senior vice president of Retirement and Cash Management at Fidelity.

Americans332Aimed at the 60 million American workers who today are without a workplace retirement plan, Sallus Retirement LLC launched in late March as an independent fiduciary and retirement Pooled Plan Provider (PPP), according to venture capital firm Magis Capital Partners. Based in Berwyn, PA, Sallus described its solution as being designed specifically for the 5 million small businesses that either cannot afford a retirement plan or whose owners do not want the risk of becoming a retirement plan fiduciary subject to regulatory oversight. "401(k) plans are the only employee benefit plan still not outsourced to a professional third-party to manage,” said James Sopha, CEO of Sallus Retirement. “It's not practical to require company officers to take on personal liability as plan fiduciaries when the risk can now be outsourced to a third-party professional." Sopha noted that the 401(k) industry has sold 575,000 plans in 43 years. “At the current rate…it will take another 373 years for the industry to cover the 5 million businesses in need of a plan. The 60 million uncovered American workers simply can't wait that long," Sopha emphasized.

Canada richardson330Canada’s Richardson Wealth Limited was named on the 2021 list of Best Workplaces for Women by Great Place to Work™, a global authority on workplace culture. “Richardson Wealth has long been a champion of women's financial empowerment at all levels of our organization and industry,” said Kish Kapoor, president and CEO. “In a recent survey, 95% of our employees acknowledged we are a diverse and inclusive workforce.” Richardson Wealth is a wholly owned subsidiary of Toronto-based RF Capital Group Inc.


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