When the phrase “employee benefits” is mentioned it’s often in reference to group health insurance, pensions or a 401(k) match. In recent years, employee health and wellness programs have come into their own—mainly as a means to drive down healthcare and insurance costs. But there’s another type of wellness program sweeping the country, and it has nothing to do with counting calories or minutes on a treadmill. And no, it doesn’t come with a Fitbit.

Financial Wellness Programs: Why They’re Needed
Financial Wellness programs are a way for businesses of all sizes to allow their employees access to the same caliber of financial education and advice as their executives. The unspoken truth is that business owners and top management have access to a greater variety of high-quality financial advice because it’s more profitable for wealth management professionals to have larger (from a net-worth standpoint) clients than it is smaller ones.

Entry and mid-level workers don’t seek out financial advice because they fear it’s cost prohibitive to do so. And the advice they do get often leaves something to be desired. Bridging this divide is what financial wellness programs are designed to do.

Consider these statistics:
• “70% of financially literate people save for old age, while only 47% of those with poor financial knowledge save for old age.”
—The MetLife Study of Financial Wellness Across the Globe
• “92% of Americans are losing sleep over their finances.”
— Corporate Wellness Magazine 1-29-14
• “More than half of workers admit that personal, financial challenges have impacted their performance at work.”
— Society for Human Resource Management 10-29-15
• “89% of employees make at least one improvement to their finances 30 days after participating in financial wellness programs.”
— FinancialFinesse.com

Financial Wellness Programs: What They Are
So, what is a financial wellness program? In essence, a financial wellness program is an employer-provided benefit that includes three main components:
1. Financial Education
2. Financial Consultation and Planning
3. Individualized and Actionable Recommendations

A financial wellness program done right is much more than a 30-minute annual meeting with the retirement plan provider. It’s teaching employees about debt, saving, budgeting and investing. It’s putting them in front of a qualified professional who isn’t there to sell them products. It’s providing a true value-added employee benefit that shows the employer cares about the financial health and wellbeing of its employees. To me, this growing trend is exciting. In an age where an employee’s financial future is no longer tied to their employer’s pension and is instead in the employee’s own hands, it is refreshing to see employers finding a way to guide their employees in the right financial direction. I believe smart, honest and non-biased financial advice can make a difference in anyone’s life—regardless of their income or net-worth. Financial wellness programs allow businesses the ability to make that difference in their employees’ lives. That can be so much more valuable than many other popular employee perks.

Financial Wellness Programs: Where They’re Headed
While health-wellness programs have been around for some time, the financial wellness program industry is still very much in its infancy. Businesses have an expanding list of financial wellness providers to choose from: anything from national radio show host Dave Ramsey’s popular
offerings to in-person programs offered by local, independent firms like mine. And the program choices just keep growing.

Business owners and human resource managers interested in learning more about the financial wellness program landscape should check out a recent whitepaper published by the Consumer Financial Protection Bureau entitled Financial Wellness at Work: A Review of Promising Practices and Policies available for download at: http://files.consumerfinance.gov/f/201408_cfpb_report_financial-
wellness-at-work.pdf

This resource is a first step. After learning what a successful financial wellness program can be, determine what kind of program, and what kind of provider, may be right for your employees.

Disclaimer: This column is for informational purposes and should not be considered personalized investment advice. Everyone’s circumstance is different, and individuals should seek investment advice based on their unique financial situation. All investments are subject to risk, including loss of principal.


By John Hall, CFP®

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