Financial wellness – it’s one of the hottest trends – or most overhyped topics – depending on who you ask. What are NAPA Net readers experiencing?
Well, the data on financial wellness is – well, inconsistent to say the least, if only because the definition(s) of financial wellness are somewhat – well, inconsistent. So, we started by asking which element(s) readers thought were the key elements of a financial wellness program, and they selected:
27% - debt management/reduction
23% - budgeting
22% - establishment of emergency savings reserves
19% - focus on outcomes/retirement readiness
19% - financial literacy
But perhaps not surprisingly, the most common response – 69% – said all of the above.
Element “Tell”
As for incorporating those elements, some (29%) were doing it one element at a time, 17% were doing so all at once, but 54% characterized their approach as “it depends.”
For comparison, we then asked readers what their plan sponsor clients considered to be the key elements of a financial wellness program – and they said:
19% - focus on outcomes/retirement readiness
15% - debt management/reduction
14% - budgeting
11% - establishment of emergency savings reserves
8% - financial literacy
About a third (35%) went with all of the above. But the most common response – 46% – was that “they really don't have a good idea.”
Pitching “Rotation”
Next we asked readers if they were “pitching” financial wellness to their clients/prospects these days and most – 68% – were, with another 20% in the “it depends” category. The rest – weren’t. “Never believed the hype,” commented one. Another said they were “currently investigating whether to do so.”
As for those currently pitching the service, just one in four said that it was “catching on” for the most part, and a like number said “it depends.” However 54% said that while plan sponsors were “receptive,” signing up for it – not so much. “They like the concept, are wary of the price,” noted one. “Plan sponsors were not excited,” commented another.
Obstacles “Course”
We asked readers who were encountering resistance to note the most common reason(s) – and far and away, the top reason was – cost, cited by 68%. Other obstacles cited (more than one could be selected) were:
20% - Deferred for future consideration
16% - Not the right time
12% - Resistance to change
8% - Recordkeeper resistance
4% - Litigation concerns
16% - a combination of the above
“Not willing to let employees take time away from their desks,” noted one. “Takes too much time. Not proven. What for? Why?” explained another. “Finding staff time to attend, from management perspective,” said another.
Pilot Plight?
Noting that a recent survey of employers found that a majority of employers characterized their programs as "pilot", or ad hoc, rather than holistic, we asked readers how they would characterize the majority of the wellness programs with which they are working. The answers were varied:
27% - Maybe not "holistic" yet, but it will be.
20% - They're all over the board.
16% - Ad hoc - definitely ad hoc.
16% - Holistic
13% - "Pilot" sounds about right
8% - It's just a "one and done" thing.
One reader characterized it as “A lot of ‘recommended reading’ to the troops”.
For those working those programs, a third were doing it with a partner firm, a quarter were doing so on their own, another third were doing “a little of both,” and the rest – weren’t.
Other Comments
As usual, we got a number of reader comments. Here’s a sampling:
“If the plan sponsors has a strong wellness program, there's better traction. We're still seeing cost as a barrier for some. They're looking for free resources, of course.”
“Financial wellness is, and has been, a topic that HR departments talk about. Most clients & prospects are not yet willing to incur a fee for these services mostly because it is difficult to measure a return on investment, health care costs are eating up the benefits & perqs budget, the 'free of charge" financial wellness offerings by my firm and from other vendors are not getting much utilization amongst employee groups, and some clients feel like employees need to be responsible for learning to manage their finances on their own (not an employer responsibility). Additionally, financial literacy does not equate to behavior change, and there is limited evidence that providing a financial wellness offering results in meaningful behavior change — it is difficult for people to break bad habits as many are focused on what they want now, not what they need to do for their futures.”
“Unfortunately we are not getting the traction from participants that we were told would take the assessment or access the online resources. Not sure why their numbers are so much higher than our customers.”
“I think it sounds good but it is difficult to implement due to lack of time on plan sponsor side and lack of engagement on employee side. Definitely needs to be done in conjunction with rewards or as a competition.”
“Until someone can produce results that actually demonstrate behavior change for a larger percentage of the people that use these programs, I just don’t think it’s going to be anything other than a fad.”
“Like Socialism, idea is great, but it quickly breaks down in real life. Employer doesn't have the time to give the employees, let alone the cost and quite frankly most employees do not care.”
“Advice is what participants who need help need. They don't wasn't to be taught how to "pull their own teeth" "give their own surgery." They want an expert to handle it for them.”
“Need more study on how to find what topics are most needed and psychological study of ways to approach behaviorally to motivate changes, instead of lecturing on things they already have been told a dozen times.”
“The term "financial wellness" is all over the board because the target group is all over the board. What a 60-year old married janitor needs is very different from what a 25-year old single business analyst needs. Trying to find one solution for them all is ludicrous. Even trying to find out enough to help one employee is daunting. Focusing on a part of the problem may be the only way to help, but even then it won't help everyone at a given worksite.”
“If done correctly, this could be awesome; if it is only a means to other product sales, it will not produce the right result for the plan or the participants.”
Thanks to everyone who participated in this week’s NAPA Net Reader Poll!
