Now that the retail financial advice space has entered a new fiduciary era with the initial implementation of the Department of Labor rule, fiduciary services and low-cost investment selections are “table stakes” for retirement plan advisors.
More than ever, plan sponsors are seeking expanded value-add services from their 401(k) advisors. And with the continued evolution of turnkey financial wellness programs, these advisors can develop that extra edge for their businesses by positioning themselves as employee productivity consultants.
When 401(k) advisors deliver a well-crafted financial wellness program to a plan sponsor, it’s an opportunity to show how that sponsor can utilize financial wellness initiatives to substantially boost employee productivity.
In particular, as plan advisors go through the process of selecting a turnkey financial wellness services provider, it will be crucial to work with a partner that can help the plan advisor demonstrate and track–both qualitatively and quantitatively–with the following:
Alleviating employee stress by reducing financial distractions
Workers that struggle with debt, whether it’s from student loans or mounting credit card bills, are typically more easily unnerved and distracted on the job.
Some, in fact, don’t bother to consistently show up, with many employers reporting higher levels of absenteeism among workers with high debt loads. And even when they do come to work, the debt-related stress often makes them far less productive than their peers. (Phone calls with creditors can eat up a lot of company time.)
At the same time, these burdens–and financial concerns generally–are not a subject many employees would feel comfortable discussing with their employer, even if there were someone within the company qualified to help them.
A well-designed financial wellness program, however, can provide employees a neutral, qualified third party to speak with to help establish a budget and take daily steps to alleviate their debts, lowering stress and increasing focus on the job.
These programs can also help employers see their employees’ overall level of progress toward their financial goals by offering ongoing ‘check-ups’ and confidence assessments.
Turning retirement planning into motivation
No matter how robust a company’s 401k plan, many employees continue to see retirement as a far-off or even unobtainable objective–even late in their careers –unless they understand how to set goals for their retirement and use the firm’s resources to make progress toward those goals each month.
The trouble is that most employees lack access to financial professionals who can help them identify these objectives and how to use the firm’s retirement plan to work toward them.
A strong financial wellness platform can provide employees with in-person counseling and regular follow-ups to help them better understand the retirement resources available to them, and how to use those resources to steadily put themselves in position to enjoy the life they want once their careers end.
In the process, the wellness platform can change retirement from a nebulous, far-away concept for employees into a driving source of motivation, with powerful implications for increasing workplace productivity.
Boosting employee engagement by showing loyalty is a two-way street
As many business owners know, a person who feels appreciated may be inclined to do more than is expected. As employees begin to make progress toward their goals by following the personal financial plans they have laid out in conjunction with the wellness platform’s dedicated advisors, they start to see–in concrete terms–that their employer is looking out for their interests.
This, in turn, can create a powerful sense of connection to the firm, to their teammates and to the company’s mission.
In our own practice, we frequently see letters from client employees thanking their employers for implementing financial wellness platforms and expressing appreciation that these firms have taken the extra step to promote their employees’ well-being.
Many employees are happy to give their best effort at work as long as they feel their dedication is reciprocated. And, as these letters show, a strong financial wellness platform can help employers demonstrate a clear desire to ‘give back’ to their employees.
A company can only go as far as its employees will take it. For management, however, making sure those employees are engaged and contributing at the highest level is a constant challenge.
By working with turnkey financial wellness provider partners, retirement plan-focused advisors can help their clients address the vital and ongoing strategic imperative of employee productivity–and, in the process, make themselves that much more indispensable to the plan sponsor clients they serve.
Rick Kent is president of Merit Financial Group, an independent hybrid RIA with more than $900 million in client assets that operates Worksite Financial Wellness, a third-party financial wellness services provider for the retirement plan space.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
