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

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

[1]

As an employer, this presents an excellent opportunity to support your employees on their financial wellness journey. Throughout this journey, the best way to help your employees thrive and grow their financial knowledge is to provide them with the tools and resources to succeed.

This is where a customized financial wellness solution comes in. It is a fantastic resource for employers to include in their employee benefits programs, helping to strengthen the relationship between employer and employee.

Customized Wellness Plan vs. Boilerplate Solution

Customized financial education comes down to understanding what your participants need and want. When a business's financial wellness platform is customized, the organization can better focus on the company's demographics and how best to help those employees. For example, with a younger employee population, plan sponsors could consider implementing targeted education toward student loans and Roth 401K. Conversely, sponsors could focus on Social Security, Medicare, and estate planning for an older employee population.

From a customized perspective, holding 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 cover subjects such as how to prepare for retirement and Social Security. Offering a variety of topics allows employees to build and increase their financial literacy.

Group Education vs. One-on-Ones

There are two different approaches to financial wellness platforms, and both have their use cases and can be used in conjunction with each other. The benefit of group workshops is that participants can get their general questions answered by a knowledgeable adviser. Often, a participant doesn't even know where to start. Group education can significantly empower your employees and give them a starting place to increase their financial knowledge.

One-on-ones are when personalized financial guidance and education happen. An adviser can move a participant ahead on their specific financial plan much quicker because the advice is unique to them. The one-on-one education can get much more detailed and direct than anything from a workshop.

Knowing your Employees

Understanding your employees' needs is critical. By analyzing the demographics of your workforce, you can tailor your financial wellness programs to better serve your employees. Many employers are now utilizing census data and conducting information-gathering surveys that address economic issues plaguing employees. This approach enables employers to provide a more customized financial wellness solution and address the issues affecting their employees the most.

Employee Engagement

Financial stress and uncertainty in recent years have significantly impacted employee engagement, prompting many to seek financial assistance from their employers. Worrying about finances can lead to decreased productivity, higher absenteeism, and low morale.

According to TIAA’s financial literacy and retirement fluency index, financial literacy among adults is 48 percent. [2] Employees are more interested than ever in financial literacy and resources to help manage their financial challenges. A comprehensive financial wellness solution can help alleviate stress, often leading to more engaged and focused employees.

Financial education supports employee's financial well-being and fosters a more positive and productive work environment.

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 Intuit, 61 percent of millennials and 77 percent of Gen Z Americans have gotten financial advice online or through social media. [3] This newfound interest can be both 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 than 60 seconds. Social media content like this is much easier to take out of context.

As an employer, you can leverage your wellness platform to help safeguard your employees from improper advice. By offering a customized solution with a vetted and reputable adviser, you help ensure your employees receive the best possible guidance tailored to their needs. The financial advice employees receive must be factual, something that often cannot be achieved through brief social media posts or quick online tips.

How Wellness Programs Can Help with Employee Retention

When participants or employees have better control of their money each month, they may be happier, more comfortable at work, and even more productive. Seventy-four 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.[4]

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. [5]
 
—Wharton University of Pennsylvania, Pension Research Council

The Benefits of Consistency

Having repeatability or consistency is key to a sound 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 a reliable service your employees know is available and on a repeatable schedule. As an employee, knowing that an adviser will be available regularly is reassuring. This consistency provides security and support, allowing employees to address their financial concerns confidently. Having an adviser they can talk to and create a safe place to share financial information can take a massive weight off an employee's shoulders.

Sometimes, running a business means 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 personalized platform, you can better help individuals through group sessions and individualized advice 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.

[1] Bank of America Study
[2] TIAA Institute Financial Literacy and Retirement Fluency
[3] Intuit "Gen Z feels burned after taking financial advice from social media"
[4] PwC's 2023 Employee Financial Wellness Survey
[5] Wharton University of Pennsylvania "Employers’ Sense of Responsibility for Employees’ Financial Wellness Is Rising"

ID: 00154258