Many employers may not realize it or think about it, but when you get right down to it, most really do want to help their employees be financially responsible.
We all know the benefits of financial wellness and how lowering financial stress levels increases employee productivity, but how can plan sponsors be convinced that implementing a program will justify its time and expense?
That was the overarching theme of Wednesday’s 30-minute Excel 401(k) Digital Series session, hosted by 401k Specialist Editor-in-Chief John Sullivan and featuring panelists Larry Deatherage of Retirement Benefits Group, Jane Hagen of Tri Star Trust Bank, and Jeffery Acheson of Independent Financial Partners (IFP), who not coincidentally all happen to be among the finalist nominees for this year’s Top Advisor by Participant Outcomes (TAPO) annual award, which will be presented during a virtual/live awards session on Friday.
Marta Rodriguez of TAPO sponsor J.P. Morgan Asset Management was also part of the panel, providing a plan provider perspective on financial wellness programs and the challenges they can present, such as how to measure a program’s return on investment (ROI).
Rodriguez said a key to measuring ROI is a clear understanding of the goals a program seeks to achieve by both the sponsor and the advisor, so it can be assessed down the road.
“If you’re not on the same page and do not know what the problem is, you can’t really solve for it,” Rodriguez said. “The satisfaction rates won’t be there unless you’re all on the same page.”
She said plan participant surveys are a good way to learn what their specific wants and needs are in order to design an appropriate program, and then effectively communicate to those participants what the program aims to do for them.
Jeffery Acheson reiterated the importance of being on the same page as the sponsor in what the program’s goals are.
“Don’t assume your ROI assumption is what they’re looking for,” Acheson said. “My takeaway is, when you get an employer who agrees to move forward, make sure you understand what they consider to be adequate ROI, or you could be running down the wrong path and find out you’re happy and they’re not.”
Sometimes just the somewhat ambiguous term “financial wellness” can be an obstacle in and of itself. Does it refer to tackling student loan debt, budgeting and cash flow, or is it around education, financial literacy and why you should put more money away for your future?
For a lot of younger plan participants, retirement is like a nebulous, far-away land, Acheson said. Financial wellness might have them mistakenly thinking a program might be directed at older participants. But, if you change the terminology a little…
“I think if it’s more around ‘financial independence’—now we get interest,” Acheson said. “If we focus on financial independence and the holistic discussion, everybody gets that.”
Jane Hagen said initial employer objections to financial wellness programs tend to vary by employer, something that was echoed by other panelists, citing differences in company size or whether they treat employees as more of a commodity or more like a family.
“It really depends on the employer,” Hagen said, adding one of the most frequent objections she gets involves time—not just in setting up the program, but also allowing employees the time to attend meetings.
“But we really want to work with employers that want to help their employees improve. We still probably have 90-95% of companies let us come in often enough to move that needle.”
She says another helpful way to get buy-in from sponsors is really stressing the value of the program. She might say something like, “You know, you offer a great benefit here. Make sure that your employees are aware of it. Make sure that they know what you’re wanting to do for them. You want them to leave the company someday and really be financially independent.”
Acheson noted that companies have three types of capital—intellectual capital, financial capital and human capital. He tries to help them understand that wellness programs are something they can utilize to invest in the improvement of their human capital.
While some employers tend to think employees come and go, others want to be known as one of the best places to work in their immediate area.
“The conversation goes a lot better with an employer who thinks of their human capital as a real asset that they want to take care of and in turn enhance what their company ROI happens to be because they’re getting a better return on the human capital,” Acheson said.
But the most unique tip of the session came from Larry Deatherage, and it involves effectively communicating with employees about their wellness program.
“A good example of the most effective communication we’ve had with a pretty large plan, they call it ‘The Porcelain Press.’ Around the committee, we were joking, saying, ‘get ’em while they’re sitting,’ right?”
He went on to tell how big plan communications in the bathroom stalls ended up being an incredibly effective way to raise awareness of the program. When they did a benefit fair, he said it was unbelievable how many people said they knew about the program through the bathroom messaging.
“If you think about it, at least once a day or so, somebody’s going to see that communication,” Deatherage said with a smile.
Monday’s complete 30-minute session from the Excel 401(k) 2020 Digital Series can be accessed on-demand at this link.
More from the Excel 401(k) 2020 Digital Series:
- How to ‘Excel’ at Digital Client Meetings
- 401(k) Specialist Reveals 2020 ‘Top Advisor by Participant Outcomes’ Finalists
- 401(k) Specialist TAPO Panel Descriptions and Participants
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
