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Employee Financial Wellness: Building Wealth In Volatile Markets

Jeff Clark, CFP®

Since the March 23, 2020 low, the S&P 500 has regained 47% of its value and was positive for the year as of June 8, 2020. [1]

For employees who exited the market while it was tanking, they likely made two critical mistakes: Selling when stocks were falling and being out of the market during the sharp, swift rebound.

Miscues like this can have a serious impact on the financial well-being of employees.

For example, a hypothetical investment of $1,000 in 1970 grew to $138,908 through the end of August 2019, according to Dimensional. Miss the S&P 500’s five best days, and the gains shrink $90,171. Miss the 25 best days of the market during that period, and the return is just $32,763. [2]

Employees who know how to manage through market volatility and keep a long-term perspective are less likely to jump in and out of the market.

The Power of a Plan

A financial wellness program anchored in goals-based financial planning and automated investing is a highly effective way to raise the overall financial wellness of your team and specifically their knowledge about the financial markets.

Goals-based planning is powerful because it answers the fundamental question of “How should I invest?” It identifies clear goals and creates an investment strategy to advance each one. Goals-based planning helps employees continue to invest when inevitable downturns happen, and they benefit by purchasing more when the market is lower – the virtue of dollar-cost-averaging.

A downturn is an opportune time for employers to focus on investing for several other reasons. First, employees are likely paying close attention to their strategy in light of potential losses. In these moments it is critical to make informed rather than emotional decisions. Second, those losses may provide planning opportunities, like a chance to reduce the capital gains taxes employees might need to pay to rebalance their portfolio.

Using Education, Technology, and Advisors to Build Financial Wellness

During the recent volatility, BrightPlan has been helping employees navigate the uncertainty in three primary ways: education, technology, and advisor access.

First, we’re proactively educating with webinars and articles to put stock market downturns into perspective. This education focuses on the cost of exiting markets at the wrong time, and the importance of best practices like diversification, dollar-cost averaging, and investing appropriately for each of their goals.

Education is only helpful if it is followed up by action, which is why our second step is to point employees towards the BrightPlan application for personalized investment advice.

Using BrightPlan, employees receive analysis of their current investments, including both employer sponsored plans (ESPP, 401(k)), and personal investments. BrightPlan gives each goal specific investment recommendations, so employees know how to invest for long-term goals like retirement and how to invest for short-term goals like buying a home.

By allowing employees to see investments held in company-sponsored benefit programs in addition to portfolios outside of work, they can see their overall progress toward their goals. A consolidated view of investment portfolios is accessible online or through the BrightPlan mobile app.

For each goal, employees can automate investing and BrightPlan does all of the work, including:

  • Investment selection: BrightPlan analyzes, selects, and monitors investments for employees.
  • Automatic deposits: One-time or recurring contributions are automatically invested when they are received.
  • Portfolio Maintenance: BrightPlan’s software intelligently keeps the employee’s portfolio on track with automatic rebalancing, dividend reinvesting, and tax-mitigation strategies.

Employees can open taxable accounts and Traditional, Roth, or Rollover IRAs online through BrightPlan.

Talking to an Advisor

Finally, while BrightPlan’s technology simplifies the process and can encourage good investment behavior, there’s nothing like speaking to a trained professional. BrightPlan provides access to seasoned financial advisors who can talk through investing basics or more sophisticated wealth management and wealth transfer strategies.

Every employee can schedule calls directly from the app. Many employees are meeting with advisors to review their investments, plan for the future, and gain reassurance in a tumultuous time.

Disciplined investing is critical to lasting financial success, but it takes a good plan and ongoing support. Our threefold approach of education, technology, and financial advisor support helps us build your employee’s financial wellness, so they can invest and achieve their financial goals.

For your employees, BrightPlan is a total solution that makes financial wellness attainable for everyone. For your company, BrightPlan creates an advantage in talent recruitment and retention by demonstrating just how much you care about employees.


[1] For illustrative purposes only. CNBC, June 7, 2020, S&P 500 erases its loss for the year as stocks rally on reopening optimism

[2] For illustrative purposes only. Dimensional Fund Advisors, What Happens When You Fail at Market Timing