Analyzing Financial Wellness Providers Consumes Substantial Time
Analyzing financial wellness services consumes the substantial time of human resources professionals and chief executives. Selecting the best-fit solution when analyzing financial wellness services can be a laborious and time-consuming task, in this young industry. Learn some of the specific areas that companies are looking at when analyzing financial wellness services and their providers.
Full Transcript Here
Hi. I’m Steff Chalk. Welcome to 401KTV. Today, I want to talk about financial wellness. I want to talk about the convergence of healthcare benefits with retirement benefits. There are only a limited number of dollars that can be placed into any employee retirement plan or any healthcare plan. What some companies have chosen to do is to put in financial wellness programs. A company might say, “Well, we want to put in this financial wellness program, but we don’t really know which one is for us,” and there are a lot of different financial wellness programs in the industry right now. What you want to look at as a plan sponsor is, how will this financial wellness program impact my participants, impact my employee base?
What you need to look at is, how can it make a difference on outcomes? We talk about improving participant outcomes a lot with retirement. What does improving participant outcomes in financial wellness look like? I’d say from a plan sponsor standpoint, when you’re going to be putting in a financial wellness program, you really have to peel back the onion and see what is being delivered to your individual employees.
There are really three different components to that. One is financial literacy. It’s not just the term. It’s truly can individuals in your company understand what would take place from an educational perspective if they were to be peppered with questions on how they save for retirement, what is a stock, what is a bond, what’s the mortgage rate on your home, is it a fixed rate, is a variable rate? Individuals have to understand the components that a financial wellness program is going to be utilizing, and they have to be able to be conversant in those terms before they can ever hope to be educated.
After financial literacy, we move to education, and the education is a piece of financial wellness that most every financial wellness program has and they tout highly. Financial wellness programs in the education can come in the forms of online education, face-to-face in education and interaction. Every financial wellness program has a different methodology for sending and continuing to learn more about the individual themselves and how do we communicate with this individual, whether that’s based on age, compensation, or many other areas.
Then after that, you have an individual who has the background, the education to make good financial decisions. Hopefully they’ll make those good financial decisions along the way while they’re working at the company as well as in retirement.
But I go back to the fact that all financial wellness providers are not the same, and as a plan sponsor, you should employ the assistance of your retirement plan advisor to help whether it’s on the assessment of your employee base or whether it’s on the selection of the wellness provider based on your employees and a literacy around financial terms of your employees.
If you have a workforce who is not conversant in financial terms, you certainly need to have that assessment and have that financial literacy take place, bring people to a level of competency where they can actually understand the education before you can hope to make any progress with the education, which ultimately helps them to make a better financial decision.
Can’t say it enough, but it does make sense to employ the assistance of your retirement plan advisor and trusted financial advisors in order to select the financial wellness program that’s right for you.
That concludes our program today from 401KTV. Thanks for watching.