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What Every Plan Sponsor Should Know About Having a Customized Financial Wellness Solution

A Bank of America Report stated that 97% of employers feel they are responsible for their employees' financial wellness.

The relationship between employer and employee has never been closer. For that relationship to thrive, the employee needs to feel cared for, and the employer needs to remain productive and profitable. That is why a customized financial wellness solution is a fantastic resource for employers to have in their employee benefits programs.

Customized Wellness Plan vs. Boilerplate Solution

Customized financial education comes down to understanding what that participant group needs and what they need from the education. When you customize a financial wellness platform for a business, you can focus on the company's demographics and how best to help those employees. For example, with a younger employment population, sponsors could consider implementing targeted education towards student loans and Roth 401K. Conversely, for an older employee population, sponsors could have an extra focus on Social Security, Medicare, and estate planning.

From a customized perspective, holding a series of workshops that build on each other can make a significant impact. A traditional approach would start with personal finance 101, then 102, and move on to covering subjects such as how to get ready for retirement and Social Security. We at OneDigital Investment Advisors LLC have found that it can be very beneficial to have a variety of topics that will allow your employees' financial literacy to build from previous topics.

Group Education vs. One-on-Ones

There are two different approaches to financial wellness platforms, and both have their merit and can be used when in conjunction with each other. The greatest benefit of the group workshops is that the participant can get their general questions answered through a knowledgeable adviser. Also, when it does come down to one-on-one meetings, they will have more information on what questions they should ask when they get into those meetings. Often, a participant doesn't even know where to start. That's where group education can be a great asset to empower your employees. It gives them a great starting place.

One-on-ones is where the point in time education can happen. An adviser can move a participant ahead on their own specific financial plan much quicker because that advice will be unique to them. They'll be able to make a change that directly affects their financial status. The one-on-one education can get much more detailed and direct than anything from a workshop.

Knowing your Employees

As we stated before, understanding your employees’ needs is one of the most important aspects of being a good plan sponsor. Understanding the demographics of your workforce will help you better serve them as a plan sponsor. Many employers are turning to census and information gathering surveys. Then they can use that information to accurately assess what financial issues are plaguing their employees. Then this allows the financial wellness solution to be much more customized to their needs.

Employee Engagement

Financial stress through the COVID pandemic has most certainly impacted employee engagement. The amount of uncertainty is troubling everyone. This uncertainty is, in turn, causing people to reach out to their employers and ask for help with their finances and become more engaged with the topic. A financial wellness survey from TIAA stated that because of the pandemic there has been a 51 percent increase in awareness of financial wellness. With hybrid work programs becoming much more popular, employees are getting hours back in their day. This extra freedom allows them to engage in personal finance. Then individuals are taking this knowledge and attending group education workshops and asking much more questions than ever before.

How Advice Through an Employer Sponsored Plan Can Be Better than Online

Younger employees are becoming much more engaged through online platforms. According to an article from Forbes, almost 80 percent of millennials and Gen Z Americans have received financial advice from social media or other online platforms. This newfound interest can both be positive and negative. It is encouraging that employees are becoming more engaged, but we all need to be careful of financial advice that is 140 characters or less or less than 60 seconds. Social media content like this is much easier to take out of context and misread or be misguided into making the wrong decisions.

As an employer, you can use your wellness platform to help safeguard your employee from improper advice. Having a customized solution with a vetted and reputable adviser is a service to your employees to do what is best for each and every one of them. It's vitally important that the advice your employees are receiving is solid and sound investment or financial advice. That is not something that can be done in 60 seconds or with 140 characters or less.

How Wellness Programs Can Help with Employee Retention

When a participant or an employee has better control of their money each month, they're going to be happier; they're going to be more comfortable at work, and may even be more productive. 74 percent of employees want help with their personal finances and almost 70 percent of those employees use those services provided by their employer, showing that if you provide the benefit, employees will engage.

Eighty three percent of employers believe employee financial wellness programs and tools help to create more productive, loyal, satisfied and engaged employees. This works both ways, as 57% of employees feel their well-being has a great impact on productivity.
—Wharton University of Pennsylvania, Pension Research Council

The Benefits of Consistency

Having repeatability or consistency is key to a good financial wellness plan. Seeing a consistent face, having a consistent message, and a well-structured program are great ways to build stability and cohesiveness with your employees. You want to have a service your employees know is available and on a repeatable schedule. As an employee, there is great comfort in knowing that an adviser will be coming in regularly with whom you will have access to consult. Having an adviser that you can talk to and create a safe place to share financial information can take a huge weight off an employee’s shoulders.

Sometimes to run a business, you can't always help everyone. With a customized financial wellness platform, we, as advisers and plan sponsors, are uniquely positioned to do that. With a customized platform, you are about to help individuals through group sessions tailored toward them and help employees with individualized advice to help them on their road to financial freedom.

Want to learn more about the benefits of a financial wellness platform? Check out this fiduciary academy session: Employee Engagement & Financial Literacy.

Investment advice offered through OneDigital Investment Advisors LLC.