Data and Research

Integration Boosts Performance of Financial Wellness Programs

Having a financial wellness program is becoming a must for employers wanting to stay competitive, says a recent Charles Schwab survey of corporate executives.

By Javier Simon | June 07, 2017
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A new survey from Charles Schwab of U.S. corporate executives finds that the right financial wellness programming can be very successful at driving higher utilization and appreciation of employer-sponsored savings and investment benefits.

But how can plan sponsors create an effective financial wellness solution? The answer ultimately depends on the needs of the employer’s unique work force, but certain components can benefit all.

Nathan Voris, managing director of business strategy for Retirement Plan Services at Charles Schwab, tells PLANSPONSOR that a good financial wellness program is holistic, heavily data-driven, goals-based, and integrated into the overall benefits package in a thoughtful way. A good place to start building a new program—or revamping an old one—is with a thorough examination of participant demographics, which can unearth specific financial management needs that should be addressed.

“If you have a population that is approaching retirement, has experienced a frozen DB [defined benefit] plan, and has a very specific need of income planning, then you should build a very tailored program to meet those challenges,” Voris observes. He notes that, in large companies, two participants in the same location and at the same age can have very different wellness needs based on factors that may be unobservable in the normal workplace routine, so some elements of customization will generally make sense.  

He says it may help to look at employee wellness needs in a spectrum ranging from basic budgeting to more complex long-term investing and retirement savings goals. Supplementing what the employer can deliver are various financial planning tools, available from providers to help participants first identify and then address their financial planning needs.

“It’s less about building solutions and more about getting people involved with things we may have already built and have been using successfully for years,” Voris says. “It’s about meeting the participants where they are and how they want to be educated, versus building a shiny new toy.”

And there seems to be a growing demand among participants for their employers’ guidance in financial planning. Charles Schwab’s 2016 401(k) Participant Survey found that 85% of employees would take advantage of a financial wellness program if offered one. Voris says the rate was “higher than expected.”

Against this backdrop, Schwab’s recent executive survey finds that 52% of respondents say they have implemented or are considering a financial wellness program. Overall, 44% believe that a financial wellness program is becoming a “must-have” benefit in order to remain competitive.

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