Financial wellness: Tailoring a program to specific employee needs is key

Employers and individuals often are more receptive to the advice of financial advisors in January, when holiday bills come due, tax season looms and New Year’s resolutions have not yet been broken. No wonder it has been designated National Financial Wellness Month.

“Financial Wellness Month is well timed for a couple of reasons,” says Liz Davidson, founder and CEO of Financial Finesse, an independent provider of financial wellness benefits. “First, it’s right after the holidays — a time when many Americans are challenged with additional expenses including gifting, hosting and traveling. Second, it’s the new year – a time when people are excited for a fresh start and inspired to set resolutions, so many of which focus on financial goals. Historically, January has been our highest-volume month for inbound calls to Financial Finesse’s financial coaching line.”

It is important to define terms, because financial wellness can mean different things to different people. “We have noticed different definitions floating around,” she said. “I think it’s critical for our industry to have a clear understanding of what financial wellness means, both on an individual level and in the context of employee benefits.”

Davidson may be the best person to set the record straight, because her company coined the term back in 1999. Individual financial wellness is a state of financial well-being where a person maintains:

• A manageable level of financial stress;
• A lifestyle below their means;
• An emergency savings fund;
• No high-interest debt;
• Sufficient insurance;
• An estate plan; and
• An ongoing plan to reach future financial goals.

In the workplace, financial wellness is a holistic benefit that provides ongoing and unlimited access to unbiased financial guidance and coaching, with the intent of helping employees achieve a state of financial well-being. A program must meet the following criteria to be considered a financial wellness benefit instead of simply financial education or advice:

• Unbiased guidance with nothing to sell;
• Delivered as an ongoing process with support;
• Covers a broad range of financial topics, from debt management to advanced estate planning;
• Personalized to the employee;
• Integrates all employee benefits; and
• Free and unlimited access for all employees and families.

Advisors can add value by using these components to develop a plan tailored to the specific needs of businesses and individuals.

Related: A 3-step financial wellness framework: Help employees take action toward financial goals

“Offering different points of entry so employees can choose how they’re most comfortable interacting results in the best outcomes,” Davidson said. “A company with a large percentage of factory, warehouse or retail workers may need more onsite events, whereas a company with a large percentage of geographically dispersed knowledge workers may need more virtual events.”

The potential return on investment is a key selling point for employers. A highly effective financial wellness program can save an organization well into the millions of dollars for large companies based on the easiest costs to measure — wage garnishments, absenteeism and utilization of FSAs and HSAs, according to Financial Finesse. With additional analysis, companies also can measure health-care costs savings, reduction in costs associated with delayed retirement, employee engagement, productivity, retention and morale

Although Financial Wellness Month is always a good time to encourage clients to reevaluate employee benefits, it is especially important now in the wake of the pandemic and its continuing impact on the economy.

“American workers are experiencing financial stress in record numbers, and economic uncertainty is only exacerbating this issue,” she said. “We’re seeing higher demand for financial guidance than ever before. At the same time, employers are seeking to improve employee engagement and satisfaction by maximizing the impact of each and every benefits dollar spent.

“Increasingly, this includes investing in unbiased financial coaching from experienced CFPs trained in their company’s unique benefits package. These coaches help employees utilize other popular benefits like earned wage access, student loan assistance and flex mental health and well-being spending effectively, responsibly and with their overall financial health in mind.”

“Increasingly, this includes investing in unbiased financial coaching from experienced CFPs trained in their company’s unique benefits package. These coaches help employees utilize other popular benefits like earned wage access, student loan assistance and flex mental health and well-being spending effectively, responsibly and with their overall financial health in mind.”

A guide to workplace financial wellness program best practices from Financial Finesse is available here.