Curated, Customized And Current Financial Wellness Strategies

As we all know, it’s not uncommon for employees to be stressed about their finances, especially after a year of such uncertainty. PwCs The survey of employees’ financial wellbeing in 2021 found that 63% of workers say their financial stress has increased since the pandemic started. Even more shocking was to hear that employees still don’t know about the financial wellness programs offered by their employer, and unaware that they are receiving personalized support that can help them achieve their financial goals in a meaningful way.

Financial well-being, like physical well-being, is not something that people should ignore. In addition, improving any part of your wellbeing can be difficult when financial stress takes over from everyday activities. When employees are afraid of bills and other financial burdens, their overall wellbeing, including their professional wellbeing, declines as they may become distracted and lose their ability to focus on work projects. Most employees do not take the time to understand their goals for financial wellbeing or their company’s health and wealth offerings. Education and awareness raising are important, but they do not necessarily lead to changes in behavior. Financial wellbeing must be an important part of corporate culture, a priority and the norm within the organization, and must be tailored to each individual.

It is important that employees understand their WHY. What is their purpose in saving money? Is it about getting rid of debt, paying off credit cards, paying off the house, saving for the kid’s college, or maybe being able to retire at a reasonable age and just have financial freedom and less stress? Without this intrinsic motivation, it is difficult to change behavior and manage impulse purchases, which often results in the credit card being drained just to pay the interest.

Employers can make a positive impact on the future of their employees by equipping leaders and managers with the skills to start a discussion about financial wellbeing. Simply talking to new employees about the company’s assets and health benefits such as health care, retirement, bonus, vacation, and even time off will help employees understand the overall compensation package and that the employer cares about their wellbeing. When an employee is new, this is the perfect time to educate them about the resources, tools, and personalized coaching for financial wellbeing.

However, it’s also very important to keep the communication about these benefits consistent, especially during important milestones an employee may go through, such as: B. Marriage, new baby, promotion, etc. Job may show up for the employee and he could end up quitting his job for $ 5-10,000 more and not realizing that he left a lot of money on the table because he does not understand the value of health benefits, 401,000 matching and stock options / bonus, personal time off, training investment, etc.

The positive impact on employee financial well-being when a manager cares

Almost two decades ago, a well-known beverage company had an effective benefit manager. He spent nearly an hour with each new hire making sure they understood the full compensation package, including health benefits and financial and physical wellbeing programs. He spent a lot of time explaining the health savings account to employees and the possibility of expanding it as a mutual fund. He would even create an Excel spreadsheet based on a person’s age and income class to help them see the potential wealth they could create for their future. He was a legend, and when he retired, many employees wrote letters and emails telling stories about their wealth doubling because of his leadership, as well as missing out on opportunities outside of the company because of the financial welfare program offered by this organization . It certainly became a recruiting and retention strategy for the company.

Twenty years on, financial wellbeing is even more important and a strategy that can give an employer a real competitive advantage. Financial wellbeing is essential. According to Prudential, 83 percent of employers offer some form of financial wellness program that makes everyone happier.

Nancy DeRusso, Head of Financial Wellness at Goldman Sachs Ayco Personal Financial Management, shared 4 key points that employers and employees should focus on:

  1. How employers can help alleviate financial stress and promote financial wellbeing
  2. The role of company performance in improving the general well-being of employees
  3. How the pandemic impacted financial wellbeing / trends in financial wellbeing
  4. Corporate America’s Role in Providing Financial Wellness Resources

Nancy stated that poor financial well-being costs the worker AND the employer; She said employees are stressed, distracted, and less productive because they are worried about finances because;

  1. Employees don’t know where to start with their financial wellbeing; so don’t do anything
  2. Employees don’t always want to talk to their employer about finances; but a trainer is ok
  3. Education is important, but it is only part of the solution; Action is crucial
  4. Employees didn’t spend time understanding their WHY? (Intrinsic motivation will help them anchor themselves to something bigger than money; that is, to support their family, give back to the community, retire comfortably, pay for their children’s college, reduce stress, and be more present be.

Nancy has found in her experience that top employers prioritize financial wellbeing and seek to alleviate this source of stress. In particular, these forward-thinking employers are removing barriers by offering financial coaches to talk to employees. These financial coaches provide training and awareness of the tools and resources. More importantly, however, they work with the individuals to create a specific and bespoke financial plan based on the individual’s short and long term goals. Together, the financial coach and the employee identify their most important obstacles and jointly develop strategies and plans that are achievable. There is no one size fits all; These coaches are trained to guide participants to recognize their unique challenges and identify the solutions that can be achieved. Together they set goals and regularly check whether the pursuit of financial freedom is being achieved. The coaches help participants build in “nudges” to make the experience seamless, such as: Getting people to act takes a more complicated task, breaking down the complexities and making them simple, timely, and personalized.

There is no longer one size fits all, and big data has also helped curate this bespoke and automated approach. Nancy is working with a client to integrate the diversity, equity and inclusion strategy to ensure that all employees meet their needs. Every member within the corporate community is seen, heard, represented and involved in creating a meaningful and relevant financial plan for them.

Nancy notes that there has been a real focus on financial well-being over the past five years, but there is still room for expansion and scaling. She shared the top five tangible tips that could be implemented right away:

5 tangible tips

  1. Make it relevant and meet the person where they are
  2. Create clear, concise, consistent, and creative communication
  3. Work with an independent financial advisor (not in-house) who can provide financial coaches, financial content, bespoke strategies and relevant products
  4. Meet up with each new employee and connect them with a financial wellbeing coach on the first day and also check in with long-term employees
  5. Providing relevant benefits and choices; (Salary Options, Student Loans, or 401,000 Match Options, High Deductible Plan with Health Savings Account Savings, Auto Enrollment, Auto Retirement Escalation

Post a comment: What is interesting is how AI and machine learning can affect personalized finances. Here’s a quick read if that’s of interest. Can machines “learn” finance? was named the winner of the Harry M. Markowitz Award 2020. Machine learning for asset management faces a number of unique challenges that are very different from other domains where machine learning has excelled. This article discusses various useful use cases and potential pitfalls for machine learning in wealth management, and highlights the importance of economic theory and human expertise to success through machine finance learning.

Comments are closed.