The final installment of the three-part series chronicles the results of a groundbreaking nine-month study completed last year, focused on how financial wellness can impact participant behavior and stress levels.
First a bit of background on the objective of the study.
We talked with hundreds of plan consultants and plan sponsors, and confirmed that financial wellness as a topic in-and-of itself was simply too much to identify and deliver. The goal was to identify what could work in this area.
Finding a solution that covers the masses, with their differing levels of knowledge and interest, traditionally has not proven effective, although financial providers have invested time and energy into materials for many decades.
Instead of blanketing the universe with similar information, we chose to work with only those participants who were proactive in increasing their financial understanding.
We focused on participants who said, “I want a solution to improving my knowledge and taking charge of my financial well-being.”
While novel to our industry, this approach is not new. Every effective change program counts on people raising their hand to say, “I want the help.” If you don’t want to lose weight, you don’t enroll in a weight loss program. If you don’t want to stop smoking, you don’t attend a smoking cessation class. We need the masses to be educated in financial literacy, but if they don’t want to do so, we can’t force it on them.
The goal of this particular initiative was not just to educate, but to move them to action and then have them confirm they were helped.
The resources we offered addressed both their short-term goals such as cash flow, debt management, and credit issues and led up to the big long-term goal which was to be prepared for retirement.
The study included a broad range of eight diversified plan sponsors and 120 plan participants who were all eager and willing to participate in a study that could potentially improve their financial lives.
A quick overview of the results shows that 96 percent of the participants found the five-week program to be helpful. The highest impact was in the percentage of participants who felt stressed about their personal finances. This number fell from 52 percent to 19 percent after completing the program—a shocking drop of well over 60 percent of those enrolled.
Additionally, 15 percent increased their plan contributions after completing the program, and over half believe they are now better able to manage their monthly cash flow.
The results exceeded any expectations we had. We believe that if the numbers are so significant with only a simple five-week program, a year or more of similar content will show even more remarkable results.
We know people learn differently, come from different backgrounds and knowledge levels, and have different life goals and concerns, so it was important for us to consider five key things in our program design process:
1. We recognized there must be different learning methods to engage participants in a variety of ways. Simply doing stand and deliver enrollment meetings, or sending participants to a web page alone, was not going to work. We had to vary the mediums for learning.
2. While the idea of education is important, we knew to have an impact, we must go beyond just teaching them something and ultimately move the participant to action.
3. If we don’t know what does work and what doesn’t, we can’t replicate it or implement it across populations, so we knew we had to measure the impact and embed some sort of assessment process to gauge success.
4. We knew that if we were going to bring about a sustainable long-term impact we needed to develop a program that goes well beyond five weeks of learning and action-items. Financial wellness is a lifetime journey.
5. The fifth and last element was potentially the most important—knowing all that we needed to do, we had to focus on making it easy as possible to deliver, for both the plan consultant and the plan sponsor. It had to be easy to understand and virtually turnkey so that busy, overloaded business professionals could access it without changing their entire program.
We were able to combine these five ingredients to create a powerful overall program that showed measurable results.
In doing so, we proved that tackling financial wellness with a very targeted and manageable strategy can be effective, and can positively affect the plan participant and the plan consultant.
Mark Singer, CFP®, AIF® is the President and Co-Founder of Financial Literacy Toolbox. Mark is a leader in the world of financial education. Mark is the author of three books, a frequent speaker at events, and is the creator of The Financial Literacy Toolbox, a virtual resource center to help financial advisors, wellness providers, and institutional retirement services firms change the conversation about financial wellness.
