File Encryption - Policy does not automatically encrypt existing files

SafeGuard Enterprise 8.0

I have setup a file-based encryption policy to encrypt user profile folders (Documents, Downloads, etc.).  When the policy is applied to a new workstation the existing files are not automatically encrypted - there is the yellow lock symbol that shows there is an applied policy but the state is still un-encrypted. Is there a setting that I am missing that will automatically encrypt the existing files in those folders OR does it have to be done manually via right-clicking and choosing "Encrypt according to policy"?

Thanks