Financial Wellness: Obstacles and Opportunities

Financial wellness has become the topic de jour within the defined contribution (DC) industry for good reason – engaging people in their own financial future is key. So while the ideal plan can help people to accumulate assets without their involvement, it does not mean that we should give up on engaging people. So what are the major obstacles for financial wellness programs and what’s working?

Following a TPSU program at the Universities at Shady Grove in Maryland, Colin Clark from the Washington Financial Group and an Adjunct Lecturer at TPSU explains some of the obstacles his group faces and the successes he is seeing.

The first step is engaging the right audience at the plan sponsor to get their support and blessing especially if resources need to be expended which usually includes the CFO and/or the Committee. Companies need hard facts about how financial stress is impacting employee productivity as well as the high cost of employing older workers unable to retire. Even if the company does not have to write a check, just allowing workers to engage with plan advisors during work hours can be a challenge.

The basics of financial wellness according to Clark is the group meetings followed by one on one consultations. He also sees self-service websites, videos and other educational materials, benchmarking tools and apps that help people create a budget as being effective.

Dealing with diverse generations differently is also key. Focusing on Millennials, which has become the largest part of the US workforce, Collin sees that this generation has learned from their parents by saving early while delaying major purchases. They like to communicate differently preferring to interact with their finances on mobile devices when and where they want. Clark sees Millennials more likely to engage when they experience major life events like marriage, children and buying a home.

Financial wellness is not rocket science but it also might be harder because it includes changing behavior. We need a combination of experienced professionals whether in person or on the phone engaging people through compelling technology not just customized for their generation but also using readily available data.

Fred Barstein

Fred Barstein

Founder & Editor-in-Chief at 401kTV | TRAU | TPSU
Fred Barstein is the Founder & Editor-in-Chief of 401kTV. Fred is also the Founder and CEO of The Retirement Advisor University (TRAU), a collaboration with UCLA Anderson School of Management Executive Education and The Plan Sponsor University (TPSU).Mr. Barstein was also Founder and Editor-in-Chief of NAPA Net.
Fred Barstein
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