Financial Wellness Programs Are Essential for Your Employees

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From Job Perk to Essential Benefit: The Demand for Financial Wellness Programs

There is a strong connection between mental health and finances. Financial problems can lead to a valued company team member feeling anxious and/or depressed and, in turn, may reduce their productivity. Financial stress is a major cause of stress-related illnesses and 84% of employees report having some degree of financial stress1. Those who are financially worried are more likely to react emotionally and engage in poor financial behaviors, such as withdrawing money from retirement accounts or overextending themselves with high interest debt.  

In this post-pandemic environment, employers are starting to pay more attention to financial wellness and, as a result, more programs are being offered.

A report conducted by the Bank of America found that 46% of employers said they are offering financial wellness programs, compared to 40% in 20202.  

Financial wellness programs have transitioned from being a nice benefit to an essential benefit. Offering a robust wellness program helps an employer to stand out among others, and attract and retain top talent.  

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A pioneer of worksite financial wellness, Brad Arends, Co-Founder and CEO of Intellicents, a national, independent financial services firm centered on the employee benefit relationship, offers an interesting perspective on what makes a financial wellness program effective. The problem with many of the current programs, he points out, is that these programs need to go beyond education and provide advice to employees. Having a digital presence is important, but having high touch, one-on-one support from advisors who are CERTIFIED FINANCIAL PLANNER™ professionals is what makes a financial wellness program successful for employees.  

“The industry is doing a good job promoting financial wellness but isn’t doing a great job actually helping employees improve their financial lives. The plans centered on education are failing. Employees need more than a beautiful website to get engaged in the process. It needs to be a combination of great people and tech.” 

Brad Arends, Intellicents Co-Founder and CEO 

Financial Literacy Is Desperately Needed 

Mr. Arends also notes that the health crisis has exposed the poor financial health of the American worker. He believes financial literacy is lacking, should have been introduced in school, and now the responsibility to provide this education often falls on employers. The issue of financial literacy affects all individuals, regardless of income level — even those who are highly educated can be just as uninformed when it comes to financial issues.  

Take It One Step at a Time 

Many of the employee financial wellness programs are limited by only offering education, which can be overwhelming for employees, and are therefore not engaging. There needs to be a clear action plan in place, making it easy for employees to address one financial topic at a time. Mr. Arends recommends that employee financial wellness programs go beyond education and offer advice that can help employees to implement positive changes in their financial health. Advisors also need to be able to effectively communicate to participants to better assist them on a level they will understand.  

As an example, Intellicents offers a comprehensive, multi-channel financial wellness program that is centered on providing every employee with a foundational financial plan called Life Steps. Through the program, participants are provided with a comprehensive financial plan detailing the following: 

  • Necessary emergency fund for the unexpected 
  • Guidelines for a family budget 
  • Maximum total recommended debt level 
  • Life insurance needs to protect against a sudden death 
  • Retirement needs to maintain the same lifestyle as they are accustomed to during their working career 

These topics are spread out over a 90-day challenge period for better financial health so that an employee can tackle one topic at a time, allowing them the opportunity to get on the right financial path. Employees also have direct access to CERTIFIED FINANCIAL PLANNER™ professionals and financial advisors for more holistic financial planning. 

The Future of Financial Wellness 

There needs to be a combination of high touch in the form of on-site group and one-one-one meetings with experienced, credentialed advisors as well as user-friendly technology that enables employees to aggregate their information without having to go to multiple websites. Mr. Arends notes that it is difficult for advisors to expect employees to work on tomorrow’s money (the retirement plan) when today’s money is not in good order.  

Financial wellness that provides holistic financial planning, in addition to education, is the future. 

 “It’s a convergence of retirement, health and wealth that’s taking place in the employee benefits world”, says Mr. Arends. Worksite financial wellness programs need to offer personalization and easy, actionable steps to have employees truly engaged throughout the process. A successful program offers significant benefits for both the employee and the employer.  

Ready to Further Develop Your Company’s Employee Financial Wellness Program? 

If you are looking to develop a financial wellness program for participants or have questions about one, ABG Southwest can help. Contact your trusted ABG Southwest relationship manager for more information, or Contact Us.