Has the Pandemic Fueled Focus on Financial Wellness?

Financial wellbeing is still one of the most common terms in our industry – it’s something that plan sponsors are both interested and skeptical of – something that seems to have an elusive ROI, at least in an objective, quantifiable way – and one more thing …

Financial wellbeing has been on the radar of financial advisors for some time, though plan sponsors as a group have been relatively skeptical – not of necessity, but of the effectiveness of the deployment and the ability to quantify value relative to cost.

However, the COVID-19 pandemic is shedding new light on financial wellbeing as a key workplace benefit, and a growing majority of employers feel extremely responsible for the financial wellbeing of their employees. The growth of financial wellness programs in the workplace also means that expectations have shifted.

And yet, as indicated by consultants surveyed at this year’s Summit Insider, it is increasingly an element of service delivery for most consultancies.

However, the definition seems almost as fluid and numerous as the companies that use it. Here is a selection of the answers from this year’s Summit Insiders:

How would you define financial wellbeing?

Holistic financial competence and the ability to achieve something that helps individually. We have some plans that use Dave Ramsey’s program and we are formulating the provision of training on the plans that sponsors receive from the program.

What financial needs do the employees have and how can I meet them?

We offer what I would call “Wellness Plus”. We involve the employees in annual one-on-one meetings. You have approximately 20 minutes to speak / meet with a financial professional (we have 2 CFPs and 2 CPFAs) who works with co-workers (participants). Notes from each meeting are documented and reviewed before a new meeting to ensure a cohesive experience for those we meet. Much of what we do is education based, but for someone who needs more help giving them confidence, we have the tools and the offering to do so. It creates extreme security and employees often come to us before speaking to HR.

We believe the term is out of date and frankly out of date. We believe the next paradigm is to provide financial planning services at institutional prices through a CFP as an employee benefit. We see that this is either a voluntary benefit paid by employees or even something that is 100% paid by the employer.

Varies depending on the customer.

Using actual metrics to give a participant confidence in their current and future financial situation.

Applicable financial literacy on key topics – best practices.

Difficult to define exactly. This involves a number of things including KNOWLEDGE about debt management (and the real cost of borrowing), budgeting, creating an emergency savings reserve, contributing no less than what is required to receive the maximum employer contribution (and consideration of whether Roth or Pre-Post Tax 401 (k) contributions are appropriate), a basic understanding of how social security pension benefits are calculated, current beneficiaries’ names, use of tax-privileged college savings accounts where appropriate.

The state of good financial health, especially as an actively pursued goal. This means that you are not only currently healthy, but are also actively working to maintain financial health. I compare this to a gym membership instead of actually going to the gym. You may be healthy today, but do you just drive by and wave at your gym or do you actively maintain your health by using the tools at your disposal to ensure your own health over the long term?

The resources and tools to prepare a participant for retirement. A participant’s ability to meet financial goals and get the most out of their 401 (k) employers and the record holder platform.

The Million Dollar Question … Also, how are you tracking progress along the way !? I would say financial wellness means having the awareness, knowledge, and tools to make financially sound decisions.

The definition is slippery. I would define it roughly as helping plan participants with personal finance strategies and tools beyond saving for retirement.

The basics of budgeting, debt management, investing, retirement / estate planning, and social security.

The agility to holistically coordinate all aspects of an individual’s financial situation in a comprehensive view and planning.

That’s a great question that I don’t think I’ve ever found an answer to. Everyone’s talking about it, but I don’t know if I know what it is. Educate attendees about more than the 401k? Explain the importance of a budget, emergency savings, and good vs. bad debt?

That’s the million dollar question. Everything from financial basics like debt and budgeting to college planning and retirement to complete financial planning. We deliver short “tidbits” that cover financial bases to all sponsors for distribution to attendees.

Less stress knowing that your financial affairs are on the right track.

Participants understand the fundamentals of finance and how to plan their current finances as well as their retirement.

A person’s overall financial health including, but not limited to, the ability to manage day-to-day finances while meeting their individual savings goals.

Offers more than just investment advice. We consider budgeting, deleveraging, college planning and income forecasting.

Meet all aspects of an employee’s financial health (banking, creditworthiness, planning, 529, etc.).

It varies depending on the customer and needs to be flexible for each customer.

From his or her view. Much like an education strategy, we work with the client to find out what’s best for the client. It typically has a component of improving financial literacy (understanding) of how a person is handling their short, medium, and long term goals and how they will pay for them. There can also be an aspect of debt management. We work with Recordkeeper partners and in some cases recommend or present special wellness programs.

Improving employees’ financial literacy, presenting their current financial situation, helping them define goals, and helping them determine how to achieve those goals.

Holistic help, planning and tools for the participants in relation to their financial situation, both for retirement and for daily life.

Helping employees identify and resolve problems with their finances so that they can absorb financial shocks in the short term and be prepared for the long term.

Supporting employees in building and maintaining a strong financial base. These include emergency savings, budgeting, deleveraging at high interest rates, and saving for retirement.

To provide participants with all the tools to make their overall financial situation more comfortable and to have a person available to explain everything it takes to make the participant confident of retiring on their terms.

Financial wellbeing means living within your means, saving appropriately for unexpected events, planning major purchases, and saving enough to maintain your retirement lifestyle.

Financial wellness goes beyond traditional benefit and compensation programs that focus on employee wellbeing, helping them reduce stress and anxiety in their private lives, while improving employee productivity and engagement.

Financial wellbeing is an understanding of where you are financially in your journey and where you need to go. And have a plan to achieve the goals you have set for your future.

Financial wellbeing enables employees to take control of their financial future and to educate and prepare.

Expanding education beyond the 401k but on a more holistic approach.

Providing a resource for financial literacy that can be combined with a holistic financial planning offering, both on-site and virtually.

Be financially prepared for emergencies. ‍Access to the information and tools needed to make good financial decisions. Have a plan for the future.

A holistic endeavor that touches all areas of a person’s financial well-being.

A system of behavior that leads to financial security.

A state of financial literacy that enables a person (or family) to live the quality of life they desire in a way that is primarily fearless.

A robust combination of programs designed to help move individuals from a state of financial stress to a state of financial confidence and wellbeing.

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