Even in an improving economy, financial stress is still widespread. Many people are living paycheck-to-paycheck and haven’t been able to focus on long-term savings. Unfortunately, financial stress rarely stays at home and finds itself in the workplace. In fact, in a PwC survey, employees admit to spending an average of three hours a week on personal financial matters while they’re at work.
For employers, that translates into lost productivity, absenteeism and higher health care costs. Employers are concerned about improving their employees’ overall financial welfare, allowing them to focus on their jobs. Yet, many aren’t familiar with the concept of a financial wellness program, a growing trend in workplace benefits that seeks to address an individual’s complete financial picture. Financial advisors are uniquely positioned to help a variety of employers. Advisors with business owner clients can show them how financial wellness can help them solve a complex business issue.
To assess the appetite for financial wellness programs among employers and financial advisors, a research conducted by financialplanning.com shows that employers are deeply concerned about their employees’ financial stress but don’t know much about financial wellness programs that could help them.
Although the research was conducted in US the findings are relevant for Indian advisors. The survey covered two types of audiences. The employer sample drew from 282 decision makers involved in their organization’s employee benefits and reflects companies of all sizes and industries. The advisor sample reflects 289 financial advisors and Registered Investment Advisors (RIA).
The study shows that just 22% of advisors are working with employers on financial wellness programs although another 46% are considering it. This is because of low awareness rate. One in three advisors who don’t provide financial wellness services say it’s because they don’t know enough about them. However, advisors who have embraced financial wellness believe it is a unique opportunity to expand their offerings and grow their businesses. “This will be a win-win for employers and employees and will present opportunities for RIAs who can facilitate this,” one advisor says from the survey. It is necessary to demonstrate how financial wellness programs can improve employees’ financial health and improve worker satisfaction.
As an advisor, financial wellness programs can help you build stronger relationships with business owner clients.
Another finding that is identified in the research as most likely to make employees eager to participate is one-on-one coaching. Among employers with financial wellness programs, 69% provide personal financial coaching, as do 82% of advisors, suggesting it is one of the best ways to address employees’ specific financial planning challenges.
Be aware that a changing workplace demographic may necessitate using multiple tools. Millennials may be more interested in online quizzes, calculators and games. The research shows that 38% of employers provide mobile apps as part of their financial wellness programs but only 20% of advisors include them in their service offering. The simplest way to start, say both employers and advisors, is to build a program around existing wellness and financial programs like a retirement plan. That can keep expenses low and lessen the administrative burden. “The better you can integrate it with your other benefits the better you will be,” notes one employer.
As the research shows, employers are eager to help their employees reduce their financial stress but many employers are not sure how to start. They need a partner throughout the process. In fact, 58% of employers who have a financial wellness program say their most effective resource was a financial advisor or planner. By offering a holistic perspective, advisors can guide employees to better financial decisions and improve their retirement readiness.
For financial wellness programs to be worthwhile, the research shows that they must include some key topics that employees will find meaningful. Mostly, employers and advisors agree on what those components should be. Over two-thirds 68% of employers say they incorporate personal finance, including budgeting and debt management as top components in their financial wellness programs. After that, employers believe that the most important components are retirement plan basics, financial literacy and retirement income planning.
To conclude, you have an opportunity to educate employers about how a financial wellness program can be a cost-effective way to help their employees solve their most pressing financial issues while also helping companies improve their bottom lines. You will have the opportunity to strengthen relationships with business owner clients, increase referrals among high net worth clients, and diversify your practice.
Reproduced substantially from the whitepaper Grow Your Practice with Financial Wellness
Click here to read the whitepaper
