What do large employers want in a financial wellness program?
Advisors should learn about their client’s specific needs and find out what is most important to both the sponsor and participants.
Offering a financial wellness program is a great way for benefits advisors to provide more value to their clients and stand out from their peers.
According to the February 2020 MassMutual Financial Wellness Trends Study, 42% of employers offer one or more financial wellness benefits, 19% have begun implementation of a new program, and nearly 20% plan to introduce an employee financial wellness program within three years.
Related: Why employers would be wise to check in on their financial wellness culture
Offering the right financial wellness program is essential. Advisors should learn about their client’s specific needs when exploring options and find out what is most important to both the sponsor and participants. Typically, plan sponsors want to see a successful track record of working with other companies of similar size and type, as well as a history of longstanding client relationships. A financial wellness survey can reveal what plan participants most want and need.
A few key features are typically prioritized by larger plan sponsors considering a financial wellness program:
1. Customization
Plan sponsors often have specific visions and objectives that may relate to:
- Employee demographics: Age, sex, race, income and education level, etc.
- Employee distribution: For example, the percent of executives, mid-level management and entry-level employees
- Company vision or mission statement
- Retirement-benefit participation goals
- Employee-retention goals
The only way a financial wellness program can meet the individualized needs of all employees is to offer a high level of configurability to reach employees in all demographics and at all levels within the company. A highly customizable program will appeal to a much higher percentage of plan sponsor clients.
2. Integration
Many plan sponsors cite the importance of helping employees take control of their financial well-being through making better financial decisions and taking specific actions to improve financial knowledge.
A study by Charles Schwab shows that 60% of employers say the best way to help this happen is to integrate financial wellness with existing benefits. Unfortunately, this is not the norm. The same study found that 46% of employers communicate that the option is available and 30% endorse participation, but only 24% have full integration.
Full integration includes such things as:
- Single sign-on: Employees can access all their benefits with one login.
- Cross-boundary content: Financial issues do not exist in a vacuum. Large companies want financial wellness content that addresses such things as stress, mental health and physical wellness.
- Cross-tracking data: Technical integration of programs to allow comparison of data to find trends, such as the reduction of stress leads to better health indicators.
- Incentives integration: Larger organizations often have an employee incentives program, and want new benefits easily integrated into this. APIs or integrated reporting are typically preferred in order to make this easy.
- Custom calls-to-action: When employees are on the financial wellness platform, they should be able to navigate directly to the plan sponsor’s other related service providers. Custom calls-to-action can facilitate this, directing users to their 401(k), health plan options, and EAP services.
Integration allows organizations to tie actions to education. Integration capabilities are not only important to plan sponsors, but also to advisors seeking to fuse the program’s value proposition with their own.
3. Demonstrable effectiveness
Offering benefits with a negative return on investment makes no sense, nor does offering a benefit for which it is impossible to determine the return.
Companies offering financial wellness programs want to know that the program is working and meeting the set goals. Specifically, they want programs that result in:
- Positive behavior change, i.e., more employees having an adequate emergency savings fund or fewer employees taking out payday loans
- High engagement rates High satisfaction rates
Several financial wellness programs have published data regarding the positive behavior changes resulting from their solution. Advisors should look for a program with behavior change data that aligns with their goals as well as the goals of their clients.
4. A holistic approach
Financial wellness programs that take a holistic approach address all aspects of a plan participant’s life.
Unlike employee financial benefits of the past that focused completely on retirement planning and the use of the company’s 401(k) program, financial wellness programs today address the financial needs and concerns of employees, so they have the information and skills needed to create a healthy relationship with money.
In addition to retirement planning, financial wellness programs also can offer training and support for such things as personal budgeting; building credit; reducing debt, including student loan repayment, emergency and long-term savings strategies; spending attitudes and behaviors; financial goal setting; understanding financial implications of their health plan choice; and handling a financial crisis.
Holistic financial wellness that offers a wide variety of content, tools, and courses gives employees the information and skills they need to create new behavior patterns that will impact all aspects of their lives. A holistic and comprehensive program will be more appealing to a wider range of plan sponsors.
5. Established track record
Large companies want to see that the service provider is a profitable company with no financial concerns. These plan sponsors are investing significant resources in this initiative, so they want to make sure that the company will survive through economic downturns.
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