Type FLM into the search field at www.acronymfinder.com and you’ll get “fun little movies,” “fuzzy logic model,” and “fun, love, and money.” Type in PPA and you’ll get “peasants per acre” and “pesticide producers’ association.” Go a little further down the list, however, and you’ll find just what PPA and FLM mean to the insurance industry: the 2006 Pension Protection Act and the Financial Literacy Movement, a new way to market your services and products.

While PPA and FLM do not yet carry the status that popular boardroom acronyms such as KISS (“Keep it simple, stupid”) have attained, they really should be at the top of every smart advisors’ marketing plan. Why? Because the PPA and the FLM constitute an emerging market opportunity that few advisors are prepared to capture. And given that April is Financial Literacy Month, there’s no better time to explore this resource.

Emerging market opportunities: rare but real

Think back to the early ’70s, when “seminar selling” first appeared as a viable marketing medium. Systems such as Emerald, Successful Money Management, and others quickly sprang up and flourished. But as seminar systems moved into the mainstream, their effectiveness began to languish. As good as the seminar methodology is, communities began to experience a kind of “burned over” effect as wave after wave of seminar mailers, brochures, and invitations drowned suburban neighborhoods.

Now, thanks to FLM, a new emerging opportunity is gathering momentum. Fueled by various state and federal government initiatives, the rising tide of baby boomer retirees, and the Pension Protection Act, the acronym FLM and the movement it represents is reaching critical mass.

A brief history of FLM

Literacy has always been an important part of the American psyche. In the early 18th century, Congress passed several important bills to support reading and writing as a basic right for all Americans. Today, financial literacy is enjoying the same federal support. For example, in 2003, Congress passed the Financial Literacy and Education Improvement Act. In turn, this act created the federal Financial Literacy and Education Committee. Then, in 2004, the GAO (Government Accountability Office) charged the committee with creating a national strategy for financial literacy. Under this mandate, the committee published a 140-page roadmap titled, “Taking Ownership of the Future,” a 1-800 financial hotline, and a comprehensive self-help Web site. In addition, the committee pledged that the “federal government would use its influence, authority, and ‘bully-pulpit’ to make financial literacy a national priority.”

Further, determined to make financial literacy part of the warp-and-woof of America’s corporate mentality, in 2006 Congress inserted a far-reaching clause in the text of the PPA that is known as the “Worksite Education Provision.” In summary, the provision deeply relaxes the liability rules that have restricted employers from providing financial education to their employees.

A crack in the iron door

One primary result of the PPA for financial services practitioners is a crack in the iron door of corporate America. For years, even decades, advisors have eyed the closed compound of corporate America’s broad employee base as a virtually untapped market. Sure, we can call on working adults, who, at home, after a hard day, are parked in front of their favorite sitcom. But who wants to be an intruder? Daytime activity is better; still, one has to move around the labyrinths of work schedules. Could there be a better way?

What about teaching groups of adults the importance of financial responsibility right where they work? Would the corporate world stand for such a thing? Well, they would and they are, and for more then one good reason. Take, for example, one recent study by the HR consulting firm Hewitt Associates, which states, “The return on investment for employers who even slightly improve the financial well-being of employees is $450 per individual through lower absenteeism and more productivity.” The Association for Financial Counseling and Planning Education, reports, “Financial stress is rated by workers as their number one source of stress; concerns about personal finance are five times greater than those regarding health.” In fact, “34 percent of workers rate their financial stress as high to extreme” and “80 percent of workers report using work time to deal with financial issues.” Dr. Thomas Garman, professor emeritus at Virginia Tech University, notes, “A worker who is financially distressed is taking a direct bite out of the organization’s profits.”

How is the corporate world responding to this news? A Society for Human Resource Managers study reports that 65 percent of their respondents say top management is “somewhat to very interested” in providing financial advice to their employees. In addition, 49 percent of these companies are in the “initial research and considerations” stage of providing this education.

But it doesn’t stop there. It isn’t just the HR professionals and CEOs who like this idea. Employees like it, too. And why not? At work, men and women are in a business frame of mind. They are concerned with decision-making and matters of money. They’re focused on getting things done.

Does education really work?

Americans are increasingly aware of their dire financial condition. They want help, and this is where education plays more then just a key role. Americans want help, but they don’t want to feel helpless at the hands of the helpers. They’ve become distrustful of selling seminars and traditional financial marketing methods. But education is different. A basic understanding of the world of money and finance in fact empowers and motivates adults to make financial decisions. Without this basic understanding, the fear of making bad decisions is paralyzing. To prove a point, here are some comments from employees who have attended financial education classes on-site, right where they work:

“Very helpful – learned a lot of things that will help me move forward, make better decisions.”

“I think this class is a great way to get started making personal changes.”

“This class helped me feel more in control. I want to spend more time with more classes like this.”

Why the PPA/FLM should change your 2007 marketing plan

Without the PPA, without the changes in the liability rules regulating employee financial education and advice, the movement for a more financially literate country would end at the gates of corporate America. No matter how much organizations might need and want financial distress relief for their employees, on average, those gates would remain locked. On the other hand, without FLM, the Pension Protection Act would have no popular government-backed movement to carry it beyond just a change in rules to a change in thinking and, ultimately, a change in employee fiscal behavior.

So what’s the first step? Unfortunately, because the PPA is so new, there are few marketing organizations to help advisors plan for this opportunity. One key month is April, which, in 2006, the U.S. House of Representatives slated Financial Literacy Month. Financial Literacy Month provides advisors with an opportunity to raise the awareness of PPA/FLM and their own visibility in this cause. One organization, the Financial Literacy Network, has developed a Financial Literacy Month Awareness Kit that advisors may find helpful in getting out the message (www.financialliteracynetwork.org ).

But it’s never that simple. Routine is as much blessing as curse. On the curse side, routine blinds us to new opportunities. Even when routine limits the earning power of our financial service practice, routine is, well, easier. Breaking routine, venturing into a new marketing campaign, can be uncomfortable. But when the campaign is an emerging market opportunity, the payoff can equally be a boom.


Robert Douglass is co-chair of the nonprofit marketing group Heartland Institute of Financial Education. He can be contacted at hrrelations@hife-usa.org. For more information, please visit www.hife-usa.com .