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Financial Planning > College Planning

Will 2015 Be the Year Financial Wellness Finally Takes Off?

By Bernice Napach

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For years there’s been lots of talk about the benefits of financial wellness programs – employees learn how to address financial issues including retirement and debt burdens, and employers, as a result, have more productive and happy employees. But to date the financial wellness market hasn’t really taken off.

Only 24% of U.S. employers have financial wellness programs, according to the Bank of America Merrill Lynch 2015 Workplace Benefits report, and even that number may be an exaggeration.

“The reality is there are relatively few true financial wellness programs in place today but many financial education or financial literacy programs,” says Kent E. Allison, a partner at PwC and a national leader in its Employee Financial Wellness Practice. “But there is a lot of talk and interest in financial wellness programs.”

The difference between financial education/literacy and financial wellness is like the difference between reading articles on saving for retirement and developing a personal financial plan to do that, with or without a financial advisor.

But financial education and literacy can lead to personal financial advisory relationships and potentially more clients for financial advisors.

Marcos Lira, founder and owner of 360 Dividends, a financial advisory firm in San Jose, California, just landed his first financial wellness contract, with a local nonprofit organization, and will offer employees four quarterly workshops on financial topics plus two personal financial coaching sessions per year if they’re interested.

“I view this as a great opportunity to offer my services and experience,” says Lira. In addition to collecting a check from the employer, Lira hopes the program will lead to referrals for more business and to new clients when employees leave the nonprofit. Lira doesn’t pursue current employees at the organization as outside clients because he says he doesn’t want to have any conflicts of interest.

Steven Krzywicki, of Beacon Bridge Wealth Partners, a financial advisory firm in Conshohocken, Pennsylvania, says, “It’s the educational component [of financial wellness programs] that will attract clients.”  Financial educational workshops and seminars are “always an opportunity to engage more in a one-to-one relationship if that’s appropriate,” says Kryzywicki, whose firm is part of the Ameriprise Financial Services network.

Beacon Bridge has been working with a national tech company with an office nearby, providing a mix of educational financial seminars on retirement as well as one-to-one consulting sessions with employees facing retirement in the next five years. After one year a number of employees hired his firm for an ongoing engagement, says Kryzywicki.

He views financial wellness programs as a “long-term commitment” with employers, developing a presence and brand while helping to solve financial problems. The relationship starts with becoming expert on the benefits the employer offers, making sure employees know the benefits and are making the most of them for retirement, says Kryzywicki.  Then the relationship moves on to the employee’s own retirement plans and goals and whether enough will be saved given pension, Social Security and retirement income and living expenses. Everybody wins, says Kryzywicki. “A more financially secure employee is a more productive employee.”

Beyond individual financial advisory firms — be they independent, institutional or part of a larger network — are financial wellness firms that serve employers either directly or through intermediaries like financial advisory firms. They include Financial Finesse, Morningstar’s HelloWallet, 8 Pillars, Ramsey Solutions (with its SmartDollar program), Ayco, which is backed by Goldman Sachs, and Four Seasons Financial Education, a unit of Four Seasons Financial Group.

Last week John Hancock Retirement Plan Services announced it was offering Morningstar’s HelloWallet  financial wellness tool to participants in its Total Retirement Solution Platform. The week before, Four Seasons Financial Education announced PlanWell, a new option in its existing financial wellness program that provides participants unlimited access to a certified financial planner, for a cost to the employee.

The services offered vary, depending on what the employer has chosen but generally include assessments of the financial health of employees – which provide companies aggregated data about their  employees’ financial situations—financial education seminars or workshops and, often, personal financial planning for employees online,  by phone or in person plus annual personal financial checkups. The topics covered typically include not just retirement but also college funding, debt management and healthcare costs. Most programs don’t include investment management services but can offer financial guidance such as asset allocation choices.

“A real program doesn’t just try to get people into a retirement plan but helps with everything and leads to financial behavior change,” says Danielle Encinas, public relations manager at Financial Finesse.

“It’s about staying financially well as well as getting there” says Travis Freeman, who heads Four Seasons Financial Education (FSFE). He says the financial wellness industry is “poised for explosive growth” because a growing number of employers “have come to the realization that financial wellness is just as important as physical wellness” when it comes to employee benefits.

Bill Chetney, CEO of GRP Advisor Alliance, which offers financial wellness plans using programs from Financial Finesse, sees strong demand for financial wellness programs from midmarket companies with 500 to 10,000 employees.

Maybe this will be the year that financial wellness finally takes off as a key employee benefit, like the Employee Assistance Programs (EAPs) and 401(k) plans that became staples years ago. 

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