Financial wellness doesn't mean adding spa appointments to a company’s benefits plan or installing a hot tub in the breakroom.
No matter. It’s still the hottest trend in the retirement industry.
Financial wellness is often talked about separately from financial planning or workplace benefits, but it actually serves as a bridge connecting every area of an employee’s financial life. Experts say true financial wellness is not simply an ability to pay the bills, but also includes having an emergency fund, managing debt, saving for retirement, paying for education, dealing with estate planning, and more.
“The term wellness borrows from holistic self-care because at its core, it’s the same concept — a holistic approach to your financial life,” said Craig Rubino, head of participant insights, financial wellness, and learning at Morgan Stanley at Work.
As for why it’s been soaring in popularity lately, Rubino says employees have been financially stressed since the start of the pandemic, which affects both their personal lives and their work lives. Meanwhile, employers have found that providing access to individual financial coaching and vehicles to help pay back debt and student loans, in addition to education, can help alleviate the burden.
It’s also proven to be helpful in retaining workers amid the current tight labor market.
“We know employees are more likely to stay at a job that includes financial benefits, and seek them out in potential employers. However, it’s not always enough simply to have access to financial benefits, with many employees needing education and support in how to make the most of their benefits and tailor their choices to their needs,” Rubino said.
He cited a recent Morgan Stanley at Work study that said 89% of employees agree they would be more invested in staying at their company if it provided financial benefits that met their needs. And 90% of human resource leaders are worried that their employees would leave if their company didn't provide benefits that met employee needs.
As for the impact of financial wellness on the bottom line, the study showed more than 83% of human resource leaders worry that employees’ financial issues could impact their productivity, while 66% of employees agree that financial stress is negatively affecting their work and personal life.
Adam Rosenfeld, president of Rubicon Benefits, a division of World Insurance, believes education is the foundation of a company’s financial wellness plan. Sometimes, though, he says the hardest part of the job is getting the information out so that it helps the most people.
For example, Rosenfeld said that a lot of employees don’t understand that a health savings account can not only be an extremely powerful tool for health care spending, but can also be used as an additional vehicle to save money long term.
“We have many clients, often business owners, who are looking for extra ways to save money for retirement but would not have thought of using an HSA," he said. "Educating them about how HSAs offer an alternative savings strategy that is triple-taxed advantaged, can earn tax-deferred interest and can be used tax-free later in life opens up a whole new way for them to build their financial wellness.”
Emilio Vela, director of participant engagement at Pensionmark Financial Group, says retirement plans in the workplace are shifting toward emotional and behavioral engagement as key factors for success.
“Advisors and record keepers realize the importance of connecting with participants on a deeper level and understanding their motivations and concerns," he said. "That connection transpires when advisors can share their experiences with participants.”
To tap into participants' inner motivations, Vela says advisors and record keepers can use nudges, gamification and goal-setting to foster a sense of progress, achievement, and empowerment. They can also use digital tools, interactive platforms and personalized messaging to create a more personalized experience for participants.
“Multichannel delivery is important since it allows us to meet participants where they are, offer personalized experiences, drive engagement, and provide continuous support," he said. "With mobile apps, webinars, workshops, emails, texts and on-demand content, we can keep participants engaged in the digital age.”
Ultimately, the goal is to empower participants on their financial journeys, helping them achieve long-term financial well-being and success.
And if financial wellness heats up profits at the same time?
Well, that’s cool, too.
Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.
The Harford, Connecticut-based RIA is expanding into a new market in the mid-Atlantic region while crossing another billion-dollar milestone.
The Wall Street giant's global wealth head says affluent clients are shifting away from America amid growing fallout from President Donald Trump's hardline politics.
Chief economists, advisors, and chief investment officers share their reactions to the June US employment report.
"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
