The coronavirus pandemic is highlighting many trends in group retirement and investment programs, pushing the industry to be flexible and quick with some of the newer offerings.
As plan sponsors review their group retirement plans in the coming months, they may want to consider some, or all, of these four trends.
1. Financial wellness becoming a must.
A survey published by Manulife earlier this month found 80 per cent of U.S.-based employers are planning to offer a financial wellness program by 2023. Currently, fewer than half of these employers said they have a financial wellness program.
Employees are becoming more interested in employer assistance with their current financial situations as well as long-term retirement planning. In the short term, student debt is on the minds of many young employees. Manulife estimated about 40 per cent of students will have difficulty saving for retirement because of debt payments. Some record keepers are now offering plans that assist in paying down debt while contributing to group retirement at the same time.
Plan members are also asking about registered education savings plans offered through the workplace. Typically, insurance companies weren’t willing to offer a group RESP because of heavy administration. But recently, some have been able to overcome these hurdles and offer the option.
2. Investment choice assistance prevalent in these uncertain times.
Many plan members are uneasy about the uncertainty caused by the coronavirus. They’d like to speak directly with an advisor and appreciate feedback about risk tolerance and asset mix. This can be done alongside a review of investments in an employer-sponsored plan, which is available to most plan sponsors via their advisor or plan provider.
3. Virtual offerings are a requirement during social distancing.
Virtual platforms have gained much traction over the last few months. During the pandemic, face-to-face meetings and member education sessions have been replaced by webinars, voiceovers and links to educational websites. In the recent past, many of these meetings were conducted in person out of respect and courtesy. But where it may have been an insult in the past to conduct a Skype meeting, the virtual mode is now preferred.
4. The rise of socially responsible investments.
With social issues at the forefront of our minds and demographic changes in the workforce, we’re seeing a rise in the demand for socially responsible investments in fund lineups. Some insurance companies have started developing their own socially responsible pooled funds, as well as adopting third-party funds to fill the needs of contemporary investors. For many, the rate of return is no longer the only issue of interest; they are interested in how those investments reflect the values of current societal pushes.
The development and adoption of some of the above offerings is accelerating due to the current extraordinary social climate. While many of these offerings have been available for some time, they weren’t being offered by plan sponsors as quickly as the market thought they might be. But that’s now changing and I’d encourage plan sponsors to consider these industry trends.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
