Be careful what you wish for. Employees lucky enough to have an equity stake in the form of stock options often have no idea how to properly exercise them and want advisors to help.
A new survey from Charles Schwab finds stock options and other forms of equity compensation serve important functions in participants’ overall financial wellness.
But how they’re utilized and how they align with retirement benefits still cause confusion.
The survey notes that employees use options in multiple ways, but they are most likely to do so to get needed cash (35 percent), make a large purchase (28 percent) or help prepare for retirement (11 percent).
The average total value of their equity compensation is $72,245, and approximately two-thirds of employees are fully vested.
The survey also demonstrates that only half of respondents are confident in their ability to make the right decisions about their plan on their own. Millennials report being the most confident, with Gen Xers second followed by Boomers.
Meanwhile, 80 percent of all respondents say they would be much more confident with the help of a financial advisor. Respondents would like advice on the tax implications of their decisions, using the benefit to help prepare for retirement and knowing when to exercise or sell their equity awards.
Additionally, survey participants say they would take advantage of a financial wellness program—which would provide education, tools and resources to help with their overall financial health—to help with such questions if it were offered by their employer.
The survey revealed that two-thirds of respondents who have access to a financial wellness program take advantage of it, and most participants (96 percent) find it helpful when making equity compensation decisions. But there is a wide access gap when it comes to wellness. Only 43 percent of respondents’ employers currently offer a workplace financial wellness plan.
When considering the components of a financial wellness program they value the most, respondents say they want a holistic plan that goes beyond just equity compensation advice.
They are looking for resources to help them with planning for retirement, a free or discounted consultation with a financial advisor, help with personal wealth building and help with developing savings goals.