03/05/2013 07:03 pm ET Updated Dec 06, 2017

Every Company Needs a Chief Wealth Officer

I have a proposal for corporate America: Every company should have a Chief Wealth Officer (CWO). The function of the CWO would be to act as a resource for employees, with the goal of increasing their wealth. The position would be salaried for companies large enough to warrant the expense of a full-time CWO. It could be outsourced for smaller companies.

The CWO could have no conflicts of interest and would receive no compensation other than from the company.

Why is this an idea whose time has come? Because there's a direct connection between financial health and productivity. The financial security of employees continues to be eviscerated by the securities industry, which often operates without ethical or even legal constraints.

The connection between financial security and productivity is well established. According to the Society for Human Resource Management, 68 percent of employees surveyed indicated they were distracted at work because of financial worries, among other concerns.

An article in The New York Times described pressure applied to brokers in the wealth management unit at JPMorgan Chase to sell the bank's own products. One former JPMorgan Chase broker lamented his inability to "do the right things for our clients." I have reviewed hundreds of portfolios and can confidently state that JPMorgan Chase is not alone in seemingly placing its interests above those of the clients it is supposed to serve.

I speak to groups of employees at major companies and am struck by the breadth of their concerns and how poorly they are being served. Their 401(k) plans are often run by major fund families, who populate the investment options with proprietary funds, when less expensive and better performing funds are readily available. They are besieged by brokers who put them into high-cost, actively managed funds and variable annuities, when low-cost index funds have higher expected returns. They are confused by issues relating to traditional versus Roth IRAs, rent versus buy decisions, insurance issues (whole versus term, disability, umbrella, automobile, and long term care), estate planning, selecting investment options from the often poor choices in their 401(k) plans, tax planning, withdrawal strategies, and myriad other issues.

While many brokers claim to offer guidance on these issues, their advice is conflicted and often a pretense for their overriding goal of gathering assets. A CWO would act as an independent liaison between the employees and independent vendors. The CWO would be a source of objective, unbiased advice. This resource is sorely lacking in the workplace. Employees are left to fend for themselves and few of them are capable of swimming with the sharks, eager to "advise" them.

Every company likes to talk about how much it values its employees. It can demonstrate the sincerity of its commitment, and improve their productivity, by hiring a Chief Wealth Officer, with the background and experience to give sound, academically based, financial advice.

2013-01-02-solin_book 7 Steps to Save Your Financial Life Now is available on Amazon, B&N, and iTunes. Dan Solin is the director of investor advocacy for The BAM ALLIANCE and a wealth advisor with Buckingham Asset Management. He is a New York Times best-selling author of the Smartest series of books. The views of the author are his alone and may not represent the views of his affiliated firms. Any data, information, and content on this blog is for information purposes only and should not be construed as an offer of advisory services.