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A New Approach For Financial Wellness

BrightPlan Team

More U.S. employers are offering financial wellness programs, yet the increasing popularity of this employee benefit has raised an important question: What exactly is “financial wellness”? If you ask 10 people this question, you’ll likely get 10 different answers ranging from employee financial education, retirement planning, 401(k) advice, budgeting, debt management, estate planning and emergency savings. All these are valid responses, yet they describe only part of what holistic financial wellness should be: every aspect of your life that touches finances. 

 

Total Financial Wellness

This broadened definition of financial wellness requires a new approach to meet the needs of employees. This more comprehensive approach is what BrightPlan calls Total Financial Wellness, and it is a significant departure from the previous notions of financial wellness. Unlike piecemeal offerings of financial information and calculators that defined the first generation of financial wellness, Total Financial Wellness is being embraced by a growing number of employers across the U.S. today. It is the future of financial wellness.

 

A Universal Need

From a strategic perspective, this holistic approach is driven by the new understanding that financial wellness is a universal need, much like education and healthcare. Total Financial Wellness should ultimately lead employees to financial success on their own terms at every stage of life—no matter what the financial challenges or goals. A financial wellness program using this approach must educate employees and give them the opportunity to take control of their future.

It also must be accessible to employees across an organization, not just senior executives or a subset of employees. The program must be highly personalized and agile enough to meet the evolving needs of employees. It should enable your team members to automate investing, which is a proven and powerful way to build wealth. Perhaps most importantly, any solutions used to facilitate the program should act in a fiduciary capacity and ensure that financial guidance is delivered in the best interest of your employees.

Solutions that support Total Financial Wellness have the potential to anchor an organization’s employee benefits program and drive deeper employee engagement.

 

A New Day

Employers are responding to the need for a Total Financial Wellness approach. Leading enterprises and HR teams realize that financial wellness is key to employee well-being, as well as their talent acquisition, retention and engagement strategies. Studies over the past few years have consistently shown that financial issues are the top concern of employees. BrightPlan’s 2021 Wellness Barometer Survey found that 65% of employees are stressed about their finances, causing $4.7 billion in productivity losses per week across the country.* 

For employers, financial wellness has emerged as a competitive advantage in attracting, retaining and engaging employees. At least three in four Millennial and Gen-X employees say they might consider a position at another company that emphasizes employee financial wellness. That’s consistent with the finding that 71% of employees use their company’s financial wellness program.

 

The Four Key Pillars

The solution to these challenges is for employers to take a comprehensive approach and build their financial wellness program based on four key pillars: learn, plan, invest and manage.

Learn facilitates employee education and knowledge through informational content. Once employees have a better understanding of their finances, plan creation assists in building a personalized financial roadmap. The capability to automatically invest builds wealth over time and methodically advances the financial well-being of employees. Manage allows employees to oversee their entire net worth by tracking their spending, savings and investing toward their various goals.

These four pillars are essential to employee success, but they are not enough. Total Financial Wellness success is assisted by providing employees with access to digital tools and a team of experienced financial planners to support these four pillars. 

A Total Financial Wellness approach can accelerate the financial well-being of your employees, no matter what their specific financial challenge. For employers, this kind of holistic approach supports key business objectives—attracting and retaining talent, strengthening employee loyalty and increasing productivity.

 

* Disclosure: Assumes there are 94,257,000 knowledge workers in the U.S. with an hourly wage of $35.53. Source: Federal Reserve Economic Dataset. For more information, see the full report. 
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