Seems like an eternity ago that Financial Wellness programs were all the rage in the 401k space. That was soon replaced by a focus on ESG which in turn was bumped aside in favor of "Retirement Income products" which now has been leapfrogged by "Managed Account solutions". Who knows by this time next year what the new shiny object will be.
I talked with several providers of Financial Wellness programs over the years. Is it possible to find a program that accessible, easily understood, relevant, cost effective, and offers personal service? I will admit I struggled to find such a solution. This is an issue for my employers as they contemplate spending money under such a program. How do they measure the effectiveness of the program? How do they know what employees are getting out of it?
The latest effort I made in this arena was in June of this year. A client showed me a series of self-help modules on different financial topics. The program was provided free of charge by their local bank. The topics and material certainly appeared to the student in me but as one employee said to me, "I am tired at the end of work. I need an immediate solution to my problem so I can give my brain a rest".
Given that I work in the smaller-size 401k arena, employers are very focused on measuring the return on investment on any money spent. What is the benefit their employees are seeing for the dollars being laid out? To say my employers are cashflow sensitive would be an understatement. It is possible that a financial educational program (no matter how well meaning and intended) may not get the uptake hoped for.
This is not a theoretical exercise but rather something quite germane. The Employee Benefit Research Institute report, Small Businesses: Leaders vs Laggards, notes that smaller employers (ie., those with less than 100 employees) are less likely to offer formal financial wellness programs. While they do offer a robust suite of benefits (ie, child and elder care services, discounted travel programs, student loan repayment assistance), the benefits seem to be focused on helping with the everyday grind of life. They are practical programs, the usage of which can be easily measured. There is a gap though in employees perception of financial education material (75% of surveyed workers see the material as adequate) and the fact that 40% of workers do not know where to seek financial advice.
Perhaps what is needed in these more "future-looking" parts of the financial picture is increased access to financial professionals? Just as employers offer employees the "Employee Assistance Program" to handle life's little speed bumps, perhaps there should be a similar program where employees are directly in touch with a financial professional? It is one thing to be focused on the day to day of life. It is quite easy to lose sight of the larger picture (retirement). It could be that financial wellness programs that focus on education might not be enough. Might that be why there is a reluctance to spend on these programs?