Simple steps that can help you and your employees manage your wealth 

Many employers are working harder than ever to help employees develop responsible habits when it comes to managing their money. When your people are in a good place financially, it can only help them to be a more productive worker at your company.

“A lot of the education isn’t and shouldn’t be around the 401(k) plan that the employee has through your company,” says Gregg LaSpisa, executive vice president at AXA Advisors, LLC’s Cleveland branch. “Part of the conversation should always be around investment options and the value of financial planning. It’s more about financial literacy, something you can do on a broad basis where everyone can takes bits and pieces and apply it to their own strategy.”

There is a misconception that wealth management is only for the affluent part of the population, but LaSpisa says that could not be further from the truth.

“The segment of the population that is being missed is the middle class,” LaSpisa says. “There is advice out there to be had. They just need to be more engaged.”

Smart Business spoke with LaSpisa about what you can do to help both you and your employees find suitable financial strategies.

What are the key components to a good wealth building strategy? 

One is to get started early. Encourage employees to take advantage of employer-sponsored plans whether it’s a 401(k), a 403(b) or a 457 plan that is geared toward city and municipal workers. It’s something that is going to give them tax benefits and the ability to contribute dollars systematically, which is important because it allows them to dollar-cost average.

One trend a lot of employers are picking up on is having a default into their 401(k) plan.

If someone joins XYZ Co., the employer will default new employees into the plan at 3 or 4 percent of the employee’s pay. Employees don’t even need to sign up and would have to elect to not be in the plan. It has increased participation rates because people are automatically in the plan from day one.

Encourage employees to take advantage of all the employer money that may be available. If the match is on 3 percent of contributions, make sure they at least take advantage of that. Those are free dollars that they have access to.

How does wealth management differ from retirement planning? 

It could be trying to eliminate debt, trying to pay down a mortgage to build up more equity or taking a look at an insurance based portfolio. A person’s entire financial situation is addressed, not just retirement planning.

What about making investments in the stock market? 

A common problem for investors is when they try to time the market so they can get in and get out quickly with a pile of cash. But it’s not timing the market that can help your wealth. It’s time in the market.

That steady course, that consistent dollar-cost average and rebalancing of your account can means a huge difference in the amount of wealth one can accumulate over a 30- to 40-year period of time. When people see the market go down drastically, they often pull out and move to cash. They’ll never recapture that lost opportunity because they tried to time the market.

Get a strategy that is long term and manage it for that horizon. Don’t manage it day by day or year by year. If you have a 30-year time horizon, one year doesn’t mean a whole lot. One month means absolutely nothing because you’re going to have a lot of months over that period of time.

Financial services available to individuals and business owners through AXA Advisors, LLC include: strategies and products for financial protection and investments; asset allocation, college, retirement, business and estate planning strategies; life insurance, annuity and investment products, including mutual funds. Securities products are offered through AXA Advisors, LLC, NY, NY, member FINRA, SIPC, 10104 (212) 314-4600. Insurance and annuity products are available through an affiliate, AXA Network, LLC and its subsidiaries.
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