Some companies prioritize financial wellness post pandemic

The pandemic chaos has resulted in at least one revelation for many companies: The well-being of employees is critical to the company’s results, be it physical well-being or finances.

A study by Willis Towers Watson, conducted from February to May 2021, found that 93% of employers surveyed plan (or currently) provide financial planning and wellness services to their employees in the next two years. The study looked at 238 companies employing around 3.7 million people.

Financial planning has only a reputation for being a benefit to those with millions in the bank – especially advisors who earn a percentage of their clients’ assets under management.

But a growing number of wealth management startups are targeting workers on salaries less than $ 200,000, a huge but largely untouched market. And they use the workers’ own employers to reach these mass customers.

The universal need for financial planning has always been there, even though employers are only now realizing it, says Origin CEO and co-founder Matt Watson. Based in San Francisco and founded a little over two years ago, Origin offers financial advisory services to its corporate clients as an employee benefit.

“We are trying to solve the problem created by the current system,” said Watson, referring to the traditionally exclusive financial advisory model. “Our mission as a company is to make financial planning available to every employee everywhere.”

Origin works with clients who earn between $ 50,000 and $ 250,000 per year and their advisors receive a flat fee instead of using an assets under management model. Watson aims to be a “safe place where” [clients] can get impartial advice on where they are not sold. “

Origin saw a big boom in business over the past year. According to Watson, three to five more than average companies have used their services this year. Many of their customers are medium-sized tech companies, he added.

“Companies are realizing that you can’t just take care of your physical health, you can’t just take care of your mental health, you have to resolve these primary stressors [finances] to have a really healthy workforce, ”he said, adding that many people were unemployed for the first time or had to grapple with new tax laws looking for a new home in new states during the pandemic.

Facet Wealth, a Baltimore-based virtual RIA founded in 2015, has a similar mission.

“We’re rebuilding financial planning the way it should be,” said Anders Jones, CEO and co-founder of Facet Wealth. Jones decided to kickstart the business when the Department of Labor’s trust rules were not passed in 2015.

The rules advocated by the Obama administration would require advisors and brokers to put their clients’ best interests ahead of their own when advising on investments. But industrial giants resisted the rules because they feared their companies could lose billions. Rules have been rewritten and stalled over the past six years, but experts speculate that Biden’s government could pick up where its Democratic predecessor left off.

“In our opinion, this was the financial services industry that publicly admitted they were kidding eight million of their customers, and this seemed like a great opportunity to come up with a better model,” said Jones.

Like Origin, Facet Wealth saw a huge surge in 2020, quadrupling its customer base from 1,700 in late 2019 to 5,000 by late 2020, Anders said. Although the company started out primarily with direct-to-consumer programs, Facet Wealth is now working with companies looking to offer financial wellness benefits to their employees, and Jones predicts this will soon become a core part of the business.

Facet Wealth serves many who work in technology, but Jones said it has clients that range from a nurse to a teacher to a man mining uranium in Nevada.

Both Jones and Watson believe their advisors can build long-term customer relationships. At Origin, the employee packages include a period of service after leaving the company. Retired employees can start paying their own monthly subscription fee if they want to move on with their advisor.

Heather Comella, a senior financial planner at Origin, said many clients have asked to stay with her after leaving their original businesses.

“I have always worked in a non-commission position,” said Comella, “which is very important to me, to be able to advise objectively and not to let my customers ask why I am making this recommendation.”

She doesn’t see the need for planning as a benefit for workers anytime soon, especially as millennials get older.

“We have to grapple with new things that generations before us didn’t have,” she said, predicting that Millennials and Generation Z won’t be able to rely on Social Security.

“Fingers crossed, [we’ll have] some access to social security, but not the numbers our parents have now, unless something changes, ”she said. “It’s really important to do [financial planning] from the beginning.”

Comments are closed.