Financial planning platforms target Social Security benefits data for online integration

Financial Engines, Betterment among automated investment services aiming to let their clients use information to inform retirement planning

Jul 14, 2015 @ 1:21 pm

By Alessandra Malito

One day, advisers may not have to tell their clients to go onto the Social Security Administration's website to get their most recent benefits statement. Instead, advisers will be able to encourage them sign on to their own website or app.

That's because Financial Engines, Betterment and HelloWallet have recently struck a partnership with the SSA to develop software to incorporate Social Security data for individuals automatically onto their platforms. It is yet one more of the government's attempts to assist soon-to-be retirees with their financial planning.

With this new initiative, the information found in monthly Social Security statements would be released in a transferrable data file to be placed in a program. From there, advisers would be able to see a more exact number, as opposed to a projection that they create based on the guesses of their clients. It would help with creating financial projections and retirement plans.

"If [the SSA] makes the data available, it allows a separate advice engine or guidance engine to calculate that benefit in one step, so it makes it more seamless for the user," said Aaron Szapiro, policy and finance expert at HelloWallet, which Morningstar Inc. acquired last year. "It gives the user better information in one step."

Social Security benefits are a critical component of retirement planning for many Americans, and yet there is so much that goes into how to consider receiving the benefits, leaving many wondering about what payouts they can expect during retirement and when would be the best time to claim them.

In a true/false quiz that Massachusetts Mutual Life Insurance Co. gave to 1,500 adults, only 28% received a passing grade when asked basic questions about Social Security benefits.

"Basically what happens, you ask your clients what does your Social Security look like, and obviously they don't know," said Chris Chen, a financial adviser with Insight Financial Strategists. He said that while getting the statement off the SSA website isn't too difficult, having it downloaded directly to an adviser's platform would be helpful.

Kristi Sullivan, a financial adviser at Sullivan Financial Planning, said that getting information off of the SSA website can be irritating.

"It was a 55-minute wait to talk to someone," Ms. Sullivan said, adding that she had tried getting information about her own Social Security account. "It's a frustrating process."

Having a way to easily access a client's Social Security information would make it a lot easier to find the numbers relevant for that investor's retirement planning, she said.

Such an automated process would also help advisers and clients to avoid possible retirement planning mistakes.

"Because human behavior tends towards the easiest course of action, removing any roadblocks can yield step-changes in outcomes," Alex Benke, director of advice products at Betterment, wrote in an e-mail.

Betterment jumped into the retirement planning market in April.

Financial Engines, which works primarily in the 401(k) space, began to address this Social Security issue last year, when the company released a tool to measure an individual's potential benefits. With this new partnership, said David Weiskopf, vice president of corporate communications at Financial Engines, near-retirees will gain a new perspective on their own finances.

"It is a great way to help people, particularly to get a much more accurate sense of what they are likely to receive, and then make decisions around how to make that happen," Mr. Weiskopf said.

Although it will be a slow process in implementing an automated solution for integrating Social Security data, it will be beneficial one once accomplished, said Joe Elsasser, the founder of software provider Social Security Timing.

"If you look back just 10 years ago, there just wasn't the level of interest in Social Security claiming strategies as there is today," Mr. Elsasser said. "As more and more boomers retire, that level of access is going to become more and more important."

That's where the administration's newest initiative comes in.

"Forward-thinking policymakers understand that we will all be better served when systems talk to each other," Mr. Benke said. "Technology, powered by ever more data and streamlined experiences, is bringing fiduciary services to vastly more people than could access them in the past, and the government has a role to play here."

0
Comments

What do you think?

View comments

Recommended for you

Upcoming Event

Jul 10

Conference

Women Adviser Summit

The InvestmentNews Women Adviser Summit, a one-day workshop now held in four cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Featured video

INTV

How did we pick this year's 40 under 40 winners?

Special projects editor Liz Skinner and editor Fred Gabriel say efforts to improve the financial advice industry and the promise of future success factored heavily in candidate selection.

Latest news & opinion

Meet our new 40 Under 40s

For a fifth year, InvestmentNews is proud to shine a spotlight on the amazing accomplishments and potential of top young financial professionals.

Merrill re-evaluates commission ban in retirement accounts

The wirehouse's wealth management group announces a fresh look at the ban now that the DOL rule is on the brink of death.

10 biggest retirement mistakes

Adhere to enrollment deadlines and distribution rules or pay a hefty penalty.

DOL fiduciary rule on brink of death as key deadline passes

Justice Department didn't petition the Supreme Court to rehear the case. A mandate from the 5th Circuit would finally lay the fiduciary rule to rest.

Finra to overhaul broker information system, cut compliance costs for broker-dealers

The move is intended to cut compliance costs for firms as well as make the registration and disclosure process more efficient.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print