Empower, ETrade to let 401(k) clients view accounts alongside stock plans


Empower Retirement and ETrade went public Tuesday with a deal that will let 401(k) participants view their retirement balances alongside their stock plan accounts.

The alliance gives employees the ability to model stock plans and retirement plan balances into their retirement projections, according to an Empower announcement. Clients can coordinate equity compensation with their retirement plan for a more complete saving and investing picture.

“Providing a consolidated view does not mean that all balances should be treated the same,” Kenneth Forsythe, vice president of business development for Empower, said in an email. “Many employees view their stock plans as a means to a short- or intermediate-term end (e.g., saving for a down payment on a home, paying for a child’s college tuition, etc.), while some employees may have stock plan accounts that are earmarked for longer-term goals, such as retirement.”

The deal was reached ahead of Morgan Stanley’s deal to acquire ETrade, which is unrelated, according to Empower.

The service will be available later this year to Empower record-keeping clients who also have equity compensation plans through ETrade. Employees will be able to access and view balances for both types of accounts through a single sign-on, according to the companies.

The latest capability is an “added perk of integrated financial benefits” for plan participants, according to Empower.

“[In] some cases, the stock plan/DC plan ‘crossover’ will be relatively small, while other cases there may be very high crossover,” said Mr. Forsythe. “Where an individual has both a stock plan and a DC plan, we believe it is important to provide a holistic financial view.”

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The company does not have concerns that providing the accounts side-by-side would encourage participants to trade more frequently within their 401(k)s, Mr. Forsythe said.

The service provides a “one-stop view of retirement and stock plans,” Edmund Murphy, president and CEO of Empower, said in the announcement. “This is an important and powerful step for savers who want to develop a more complete financial picture which also gives them the edge in plotting the path toward achieving their financial goals.”

Empower is the second-largest U.S. retirement plan provider by number of participants, with about 9.4 million accounts in its book of business as of the end of 2019, according to the firm.

Written by Investors Wallets

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