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

Apr 30

Conference

Retirement Income Summit

Join InvestmentNews at the 12th annual Retirement Income Summit - the industry's premier retirement planning conference.Much has changed - and much remains to be learned. Attend and discuss how the future is full of opportunity for ... Learn more

Featured video

Events

CAIS's Brown: Big trends in wealth management

One of the biggest trends of 2017 was traditional institutional asset managers aiming their services at RIAs. How will this impact 2018? Matt Brown of CAIS explains.

Video Spotlight

Help Clients Be Prepared, Not Surprised

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

Broker, retirement groups make last-minute pleas to change tax legislation

Pass-through provisions are target of groups representing employee-model brokerage firms, as well as retirement plan advisers.

House and Senate reach tentative compromise for tax overhaul

Lawmakers still need to get a cost analysis of their agreement, so it's not yet definite, according to a source.

Advisers' biggest fears for 2018

What keeps advisers up at night.

One adviser's story of losing his son to the opioid epidemic

John W. Brower, president and CEO of JW Brower & Associates, shares the story behind his son's death from a heroin overdose and how it inspired him to help others break the cycle of addiction.

Tax reform will boost food, chemicals, rail stocks. Technology? Not so much

Conagra and Berkshire Hathaway are two stocks that should benefit most from changes in the tax code.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print