If you are in the 401k or Wealth Management industry, financial wellness will need to become an important component of your sales process, as it is becoming just as important to financial services consumers (and their employers sponsoring the corporate-level programs) as tailored account options.
Partnering with an existing financial wellness service provider is a convenient, hassle-free way to ensure you can deliver all the services your clients need without breaking the bank in developing your own platform solution.
What is financial wellness?
The main goal of financial wellness is teaching people how to budget, save for emergencies, eliminate debt, and plan for retirement (Lampo 2019).
The great thing about this type of service is that it applies to all employees regardless of their level of wealth. Everyone could use some refreshers on tracking their monthly spending, cutting back their expenses, and making savings goals.
Most participants using a financial wellness program are less stressed, more productive, and more loyal to their company, which makes their employers (who are paying you as the provider) happy. If you offer financial wellness services, you have created significantly more value for your client while diversifying revenue streams for your business.
Why is financial wellness so important?
Worrying about finances is a major distraction for most employees. In fact, it can cost organizations with 100+ employees 22.5 days per year in lost productivity due to distractions and time-consuming phone calls to lenders (Ross, 2018).
In actual dollar savings a recent study illustrated that the employer cost for not providing basic financial education that changes behaviors is $7,000 per employee, per year! (CFFSI 2017).
The return on investment into financial wellness programs is looking very compelling.
Initial ROI studies on financial wellness statistics show $2.80 return for every $1.00 invested (IFEPB2017). Consequently, many corporations sponsor financial wellness programs as part of their employee benefits package. The bottom line is, if you aren’t offering it as part of your services, someone else will be talking to your clients about it, if they haven’t already.
How do I choose a financial wellness partner?
Here are five “must-haves” in a financial wellness provider, according to Scottsdale, Ariz.-based Pro Financial Health, LLC.
- Look for a solution that allows you to rebrand or white-label the service as your own and is accessible 24 hours a day, 7 days a week from any mobile device.
- Take a deep look at the content they provide and determine if it is customizable to create financial education materials that fit your needs.
- Verify that the service allows your business to mark up from your wholesale cost, making it a profit center for your business.
- A well-rounded platform also provides employees with the ability to ask any type of financial questions to a financial coach and receive a quick response (within 24 hours).
- It is critical that the platform automatically measures and documents financial education progress of the user, reportable back to the employee and employer.
Other benefits a financial wellness partner can provide are:
- Liability Reduction: Employee engagement and performance tracking services on individual education modules which can help keep you compliant and insulated from liability from 401k participants by fulfilling the most difficult requirement of 404c.
- Labor Cost Savings: If your company spends any time on financial education (making and distributing content, etc.), using a Financial Wellness provider to deliver financial wellness services will allow you to save outlays in labor.
Brent Carman is a Managing Partner of Capital Wealth Alliance, and the President of Pro Financial Health, LLC, both based in Scottsdale, Ariz., where Brent began his career in the financial industry in 2003. He has previously worked for Raymond James, Wells Fargo’s Wealth Management Group and JP Morgan Chase Investment Services. Financial education has always been a foundation of the services provided to Brent’s clients and in 2017 he formed Pro Financial Health to formalize those financial wellness services. For more information visit: http://www.profinancialhealth.com/#financial-wellness.
