In-person interactions are much more impactful for clients than online education in achieving financial wellness, according to Liz Davidson, CEO of Financial Finesse.
Financial wellness, as defined by Financial Finesse, is ultimately little or no financial stress, a strong financial foundation with about three to six months of emergency savings and adequate insurance coverage, and established financial goals with a plan to achieve them.
Assessments of workers in wellness programs show that those who have five or more interactions are more likely to follow through on good financial behaviors like setting up an emergency cash fund, contributing to a 401(k) and paying off their credit card balance in full every month, Davidson said in a webinar on Thursday.
Those whose interactions were limited to online only were much less likely to follow through on behaviors that lead to financial wellness.
How might increasing usage of robo-advisors among investors affect financial wellness? As of December 2014, Corporate Insight found robo-advisors managed $19 billion in assets.
“I think there’s absolutely a utility for them,” Davidson said of robo-advisors in an interview with ThinkAdvisor. “They help with the investment part, but so much of financial success is behavioral, and that’s the challenge.”
What makes workplace financial education or wellness programs so valuable is “access to a financial coach who can hold [workers] accountable, motivate them, understand the psychology of the person — everyone’s different in terms of what’s going to get them to stick to their plan,” Davidson said. A financial advisor with “extensive training on the financial side but [also] that behavioral side — can be a big driver” in financial wellness.