Bridging the Gap in Financial Wellness

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Bridging the Gap in Financial Wellness | Cogent Reports

As financial wellness programs gain popularity, questions arise about how to design an effective program that works for the employee and the employer. It was just a few years ago that these programs began to emerge as an employee benefit designed to help employees struggling with aspects of managing household finances. While only 16% of all DC plan sponsors currently offer a financial wellness program, 38% are likely to consider such an offering in the near future. As many employers begin to recognize that a financially secure workforce is both more productive and more motivated, they are increasingly looking to offer their employees additional support with personal finances—but what does that mean when building out a financial wellness program?

As popularity grows, providers must keep the goals of plan sponsors and participants in mind when deciding what components to build into these nascent financial wellness offerings. The most common components of current financial wellness programs according to plan sponsors are online access and guidance on health savings accounts or HSAs. Contrast this with the employee perspective. When asked about which employer offering would be helpful when making decisions about household finances, plan participants cite online tools and access to a financial advisor or coach most often. Notably, plan participants prioritize credit score guidance and discounted bank accounts over HSA guidance, highlighting the focus on “here-and-now” household finances and not longer-term additional savings required to cover health costs during retirement.

Components of Financial Wellness Offerings  | Cogent Reports

So what should providers do to connect the gap between what employers are offering and what employees consider helpful? It’s important to acknowledge the groups’ differing perspectives. Employers are viewing financial wellness within the context of employer-sponsored group benefits, focusing on tax deferral and economies of scale with efficient online access. Employees, however, view financial wellness from an individual perspective and have little concern about whether the components are employer-sponsored.

Providers have a golden opportunity at hand—to merge the plan sponsor and participant perspectives and provide valuable solutions, packaging extensive knowledge and time-tested financial planning experience for financial wellness programs to be truly successful. Well-rounded offerings that can be individually tailored for participants in need will alleviate anxiety caused by financial pressure and make for a happier workforce and employer. In turn, plan providers benefit from increased participant engagement and plan contributions as well as asset retention in an increasingly competitive market.



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This entry was posted in Brand and Messaging, Financial Services and tagged by Julia Johnston-Ketterer. Bookmark the permalink.
Julia Johnston-Ketterer

About Julia Johnston-Ketterer

Julia Johnston-Ketterer is a senior director in the Syndicated Research division. She has more than 15 years of experience leading research initiatives on the client- and supply-sides of the financial services industry focusing on investors, advisors and broker-dealers. Prior to joining Market Strategies, Julia was vice president of business development for Market Probe, Inc. and research associate for Richard Day Research, where she managed financial services clients and conducted client satisfaction studies and PR research programs. Julia also spent ten years at Fidelity Investments. While there, she built a research team that provided primary and secondary research to internal marketing and communications partners. Julia earned an MBA in finance and communications from Simmons School of Management and a bachelor’s degree in French and international relations from the University of Wisconsin-Madison. While she can claim having twice bungee-jumped in New Zealand, Julia’s current adventures outside of work include being a hockey mom, taking hikes with her dog and planning her next family beach vacation.

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