What’s it really like to work with a financial coach?

March 11, 2021

Until they’ve tried it, your employees will never know; and not knowing may be keeping them from engaging with a benefit that could literally change their lives. 

Nearly 2 in 3 adults (64%) say that money is a significant source of stress in their life

We know that Americans are dealing with significant levels of financial stress, in many cases exacerbated by COVID-19. According to the American Psychological Association, “Nearly 2 in 3 adults (64%) say that money is a significant source of stress in their life, and around half of adults (52%) say they have experienced negative financial impacts due to the pandemic.”[1]

We also know that talking with a financial coach can improve financial stress levels considerably. For example, the percentage of financially suffering employees (i.e., those with an initial financial wellness score of less than 3.0) with high or overwhelming levels of financial stress fell from 70% to 41% after talking with a financial coach as part of their financial wellness benefit.

So how can we get employees ‘over the hump’ of not knowing and get them comfortable enough to call a coach? I asked our coaching team which myths or misconceptions they believe may be holding employees back. Allow me to bust them.

Myth #1 – A financial coach will try to sell me something.
While many financial professionals are compensated for selling financial products, this is not the case at Financial Finesse. Our company is independent and not affiliated with any other financial institution and our coaches do not sell or manage any financial assets.

Myth #2 – A financial coach will judge me or talk over my head.
Fear of judgment is universal, which is why we seek coaches that have first-hand experience with common financial challenges and screen for empathy and emotional intelligence (EQ).

Fear of judgment is universal

Our coaches are motivated by helping employees make progress, no matter what their starting point. In every conversation, they aim to make financial concepts easier to understand and to build rapport. To get a sense of who is on the other end of the line, employees can “meet” our coaches here. 

Myth #3 – A financial coach is not trained to deal with my problems.
Some may think their issues are too simple to merit a call or too complex for us to help. Our coaches address the full range—from fundamentals to complex topics—every day. If an employee needs advice (we provide coaching only), for example on taxes or investing, we can help them find someone through objective screening—we do not have a referral network or any affiliation with any providers.

Myth #4 – A financial coach expects me to have my finances in order before we speak.
Our coaches are happy to help employees get started—no prep work required. We hope the first call is not the last. That’s why we encourage employees to reach out to get the ball rolling.

Myth #5 – A financial coach will share my information with my employer.
This one simply isn’t true. Our coaches adhere to a strict code of confidentiality and never share any information with employers as it relates to their employees’ financial health.

Myth #6 – A financial coach can only discuss benefits offered by my employer.
While our coaches often help employees get the most out of their benefits, they are by no means limited to benefits-related questions. They can help with any financial concern.

We know that the more employees interact with our coaches the more their financial wellbeing improves, but getting first-time users started can be a challenge. By understanding their concerns, you can develop a communication strategy to address them head-on, encouraging engagement and changing lives—a win-win for any organization.

[1] https://www.apa.org/news/press/releases/stress/2020/report-october

2019 Financial Wellness Year in Review

May 06, 2020

The state of financial wellness held constant, but the typical employee engaging in a financial wellness benefit is gradually looking younger and more masculine. Improvement in employee financial behavior has been subtle but includes fewer reporting they carry a balance on their credit cards and more indicating they check their credit report at least once a year. The type of engagement—e.g., online, group, individual, or all three—also influences the degree of improvement, with those engaging in all three types garnering the highest levels of improvement. As demand for financial technology coupled with live financial coaching increases, we expect greater improvement in workforce financial wellness for years to come.

To read the full Report, download now.

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2018 Financial Wellness Year in Review

May 01, 2019

Abstract

In this report we propose best practices for workplace financial wellness programs to offer retirement guidance across an employee’s full career and analyze the positive impact of financial coaching on improving retirement outcomes. We offer a model for measuring the ROI of reducing the costs of delayed retirement for these employees.

Financial wellness improved in 2018 aided by long-term users of holistic, multi-channel financial wellness benefits. Improvement occurred in most areas, including cash and debt management, college and retirement planning, and investing. An in-depth look at workers who engaged in financial wellness benefits since 2013 found significant improvement in retirement preparedness and investing confidence.

The financial stress of American workers moved slightly lower, but levels remain alarmingly high for single, African-American moms. The gender gap in financial wellness slightly widened, particularly in the areas of cash and debt management. Student loans continue to hamper the financial wellness of younger workers, while pre-retirees remain surprisingly unprepared for retirement. Lastly, minority workers improved more than other groups in overall financial wellness.

To read the full Report, download now.

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Special Report: ROI of Improving Employee Retirement Preparedness

October 30, 2018

Abstract

In this report we propose best practices for workplace financial wellness programs to offer retirement guidance across an employee’s full career and analyze the positive impact of financial coaching on improving retirement outcomes. We offer a model for measuring the ROI of reducing the costs of delayed retirement for these employees.

To read full Special Report, download now.

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2018 Life Events Research

February 01, 2018

Abstract

Each employee has different aspirations for what they want out of life. In this study, we examine three of the most common life events that employees proactively face: buying a home, getting married, and having children. Each of these life events, in one way or another, has a relationship to an employee’s financial wellness. By understanding this relationship and providing employees access to the ongoing financial coaching, tools and benefits needed to effectively prepare for life, employers can enhance employee job satisfaction, promote productivity, and achieve a greater return on investment on their Financial Wellness benefit.

To read full Report, download now.

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2017 Generational Research Report

July 01, 2017

Abstract

In this report we propose best practices for workplace financial wellness programs to offer retirement guidance across an employee’s full career and analyze the positive impact of financial coaching on improving retirement outcomes. We offer a model for measuring the ROI of reducing the costs of delayed retirement for these employees.

To read full Report, download now.

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Special Report: Optimizing Financial Wellness Programs for a Diverse Workforce

May 01, 2017

Abstract

This report examines how financial behaviors over time can create a cycle of low financial wellness. This cycle can affect the ability of different ethnic groups to build and transfer wealth, which impacts the next generation. Employers are in a unique position to help stop this cycle and usher in a new generation of wealth builders.

To read full Special Report, download now.

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Workplace Financial Wellness Programs: Frequently Asked Questions

February 08, 2017

Liz Davidson, founder and CEO of Financial Finesse, answers some of the most common questions about workplace financial wellness programs, such as how to have an impact on every employee generation present in the workforce; where fintech tools fit into your program; how to decipher between financial wellness programs and financial education programs; and more.

Workplace Financial Wellness Programs: Best Practices Guide

February 08, 2017

Our best practices guide for workplace financial wellness programs defines what it means to be financially well, and what constitutes a workplace financial wellness program to help employers avoid ‘bait and switch’ providers who are marketing themselves as financial wellness providers when in reality, they are aiming to sell employees a financial product or service. This guide aims to set industry standards around financial wellness programs in the workplace.

Gender Gap in Financial Wellness

January 01, 2017

Abstract

The Financial Finesse Gender Gap in Financial Wellness report is an annual review of the financial wellness gap that exists between women and men in the workforce. It examines a variety of financial behaviors and outcomes, as well as the societal, psychological and practical barriers to gender parity when it comes to cash flow issues, retirement preparedness and other aspects of financial wellness. The report offers suggestions for employers and individuals to help close the gap and promote total financial wellness for all employees.

To read full Report, download now.

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2016 Financial Stress Research

January 01, 2017

Abstract

American employees continue to experience high levels of financial stress, and could be losing sleep over it. In this research report, we look at which employees are the most stressed about money, and what employers can do to help their employees develop the solid money management and investment planning skills they need to find lasting financial peace of mind.

To read full Special Report, download now.

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Integrating Employee Benefits Into Workplace Financial Wellness

October 24, 2016

Employees Say Benefits Drive Their Engagement with Their Employer, But The Vast Majority Don’t Maximize The Benefits They Have

Employees who understand, maximize and appreciate the value of their employee benefits are happier at work and more productive and engaged.  This isn’t just a guess  — the research agrees. Per SHRM’s 2016 Employee Job Satisfaction and Engagement Survey, 84 percent of employees indicated that their benefits were critical to their financial wellbeing, and 60 percent said that benefit were a key factor in their decision to join or stay at a company. Yet, most admit not fully understanding the benefits they have and virtually all are not fully maximizing them— accidentally leaving money on the table each year, not even realizing it. Based on our own research working with hundreds of thousands of employees over the years, many are leaving upwards of a million dollars on the table by not maximizing the benefits they have — and instead using that money for “nice to have” purchases that decline in value or going outside their employer to invest in more expensive financial products and services which often don’t have the same tax advantages. In some cases, employees are actually paying out of pocket for benefits the company would otherwise fully or partially subsidize, such as gym memberships, daycare, commuter benefits, legal support, tuition or continuing education reimbursement or relocation expenses. The list goes on.

Even Benefits Managers Don’t Understand Their Entire Benefit Offering

When we work with benefits managers to integrate all employee benefits into their financial wellness program, the most common refrain we hear is, “I didn’t know we had that benefit!”  If that’s sometimes the sentiment of those who manage benefits for a living, imagine how employees in the field must feel. Imagine how differently they might feel if they knew all the company was providing them and could take full advantage of every benefit that truly provided a benefit to them personally.

Because of this disconnect, it is absolutely critical your workforce financial wellness program should integrate all benefits so that employees recognize their benefits are a critical part of their financial wellness and have guidance as to how to maximize them as part of their overall financial plan. This helps employees understand where to go to find resources and the role each benefit plays in their financial lives.

It also should be used as the key vehicle to help employees manage benefits changes, so they minimize the impact to their finances and even manage to find ways to make the change work to their advantage.

The Most Successful Employers Offer Employees Unlimited Personalized Guidance On Their Benefits

The most successful benefits planning programs — which help employees maximize their benefits based on their own personal financial situation — employ a “concierge” strategy where the employee has access, both online, through a mobile app, over the phone, and in person, to their own personal financial coach who can help them make the right decisions for their life situation and goals.  As a best practice to reach a large number of employees in a deeply personalized the coaching should meet the following criteria:

  1.  The coaching should be delivered by a separate vendor not one of your benefits providers. The vendor you choose should be free from any conflicts of interests associated with employees using certain benefits over others. In addition, the vendor should have deep financial planning expertise as well as a long track record for helping employees integrate benefits into their overall financial plans. In other words, their core business should be centered on providing this kind of personal guidance around benefits, entirely customized to each of their client’s specific benefits offerings. With the complexity of benefits these days, it’s not enough to have someone who specializes in one or two benefits; the reality is that each employee has different financial needs and any coach they work with needs to help them identify and effectively manage all the benefits that meet their needs.
  2. The company you retain for the coaching should not provide financial advice or sell financial services — both have serious legal risks to the company and potentially to you personally (if you are part of the investment committee who oversees the retirement plan,  for example). Guidance is the sweet spot here. The right partner will guide employees and work with them to develop the right strategy, not make decisions for them.  The result is better for employees; they learn how valuable their benefits really are and go into all decisions fully informed of the pros and cons. Not to mention, they gain knowledge to become more adept at managing their benefits over time.
  3. The company should be familiar with ALL benefits you have available—not just retirement or health, but all voluntary benefits, all work-life benefits, all perks, and all tools, resources, apps, and vendors who provide any sort of education or communication around the benefits. Without this knowledge, you only solve part of the problem and employees lose out on key benefits that could be life changing based on their specific needs.

Managing Benefits Changes

Benefits changes are a fact of life today, whether they are for cost-savings reasons, to add more value, flexibility or support to employees, or simply to simplify or streamline a benefits offering to make it easier for employees to manage. Unfortunately, even good changes can add yet another thing for an employee to understand and act upon, and most major changes transition more costs to employees, adding to their financial stress.

If you handle benefits planning through the process described above, benefits changes become much easier to manage, because employees automatically have a coach to turn to in order to make the right decisions for their situation.

However, in virtually all cases, best in class employers do more than simply leverage their existing coaching. Without broad-based communications and education around the changes, and multiple touch points to ensure that all employees affected are aware of the change, it’s easy for important decisions to “fall through the cracks.”  Your financial wellness provider should help you proactively communicate and educate employees around all changes —consulting around all aspects of the change management process, producing materials, videos, and tools as needed to help employees navigate the change, and delivering webcasts and workshops to all those affected by the change. They should also provide you with full reporting of employee engagement in these different communications and education campaigns, both for legal documentation but also so you understand what type of communication resonated the most for the purpose of designing future campaigns.

Among the most common changes that require this level of communication and education–

  • Changing healthcare plan to a HDHP and HSA;
  • Compensation changes;
  • Offering early retirement or another severance program;
  • Terminating or freezing a benefit, such as a defined benefit plan or retiree health; and
  • Integrating employee benefit communications after a merger or acquisition.

One last note

Benefits and personal finances are complicated and highly personal. Beware of any vendor who presents a one size fits all solution that is “turnkey” and “highly scalable”. While their solution may fit into part of a larger strategy, they are typically not set up to provide the level of customization you need to address either employee benefits planning or communication of benefits changes. Your employees care much more about their financial security than any singular benefit you provide. Your ability to bridge the gap between the myriad of benefits and the strategy they need to employ to become financially secure by maximizing these benefits is what matters most. The days of siloed benefits offerings and floods of email announcements on different benefits options are over. It’s now about what it always should have been — the employee who you want to benefit in the first place.

How To Design a Highly Effective Workplace Financial Wellness Program

October 19, 2016

What’s the best way to design a workplace financial wellness program? At their core, effective programs meet the strategic needs of your business. Key areas that drive the creation of workplace financial wellness programs are:

  • Attracting and retaining talented employees;
  • Employee financial stress, which costs your organization in areas like higher health care costs, absenteeism and workers’ compensation;
  • Benefits changes, such as a new high deductible health care plan or changes in an employer-sponsored pension;
  • Merger or acquisition;
  • Initiative to build a stronger company culture, increasing productivity and engagement; and
  • Rising costs of delayed retirements.

According to a Consumer Financial Protection Bureau report, “a financially capable workforce is more satisfied, more engaged, and more productive for their employers.” That’s why 93 percent of companies surveyed in a 2015 Aon Hewitt report are likely to create or broaden their efforts on financial wellness.

 Determine the Right Approach for Your Workforce

Workplace financial wellness offerings can range from highly effective, comprehensive solutions fully integrated with company benefits to online-only tools or programs that address specific employee populations. There are three broad approaches:

Benefits-Based Approach A workplace financial wellness benefit can be the one benefit that pulls all the other benefits together, increasing employee understanding, use and appreciation of their value. In particular, when your strategic goals are to engage employees, reduce financial stress, encourage benefits appreciation and realize measurable cost savings by reducing financial stress or benefits appreciation, the best solution is making financial wellness an ongoing employee benefit available to all employees. The foundation of a benefits-based approach to financial wellness is ongoing guidance and coaching that promotes behavior change.  Depending on workforce needs, this includes some combination of workshops, webcasts, one to one coaching (telephone, in-person, or both) and online learning.

The benefits-based approach embeds financial wellness into your company culture and establishes your company as a partner in employees’ financial security. This is a powerful contribution to your recruiting brand. Over time,  research shows a benefits-based approach can provide significant ROI for a large company.

Program-Based Approach   The program-based approach can be a good fit for companies who may not have a strategic need for workplace financial wellness as a benefit offered to all employees, but have a need for support for specific employee populations. Typical employee populations to address with a targeted financial wellness program include pre-retirees, employees offered early retirement, recent college graduates and employees who have requested a retirement plan loan or received a wage garnishment. Companies may also choose to target executives by offering them an unbiased review of their financial plan by an experienced financial planner.

Tool-Based Approach Financial wellness websites and apps are generally used as tools in a more comprehensive program. There are some circumstances where a tool-based approach on its own may be a fit: when you are looking for a lower cost solution to check the box, when you have a very specific issue you want to address— such as helping parents navigate the college planning process, refinancing student loans for employees, offering employees in plan advice to help them better manage their 401(k) investments, or decision making tools that help them select the right health care plan during open enrollment.  The right tools can make an impact here, provided you are working with a best in class provider and your population truly needs the service.  However, they don’t generally make an enduring impact on overall employee financial wellness, retirement preparedness, or even benefits satisfaction.  To do that, a holistic approach is needed. This is why employers are increasingly folding these tools into fully integrated financial wellness programs that utilize a “concierge” service approach where employees are directed to the right tools and benefits based on their needs, while working with a counselor that can help them continually improve their finances over time.

Understand What Your Employees Really Need

Everything starts with data. Once you have decided on whether to implement a benefits-based, program-based or tool-based program based on your strategic needs, you still need to validate the needs of the employees you are trying to reach with the program. There’s nothing worse than spending a large amount of time and money to launch a new program, only to discover that you could have spent half that amount and gotten much more appreciation and utilization from employees who actually needed a completely different service.

For example, you may think student loan debt is a major issue looking at your population— but what if the bigger issue is not knowing how to effectively budget to pay off the debts?  You can help provide loan consolidation support for employees in this scenario but the effect will be marginal, as their foundational habits around how they manage their money won’t change.  Similarly, in plan advice can be great— but it’s more expensive than target date funds and if employees who rely on their retirement plan as their sole investment vehicle choose in-plan advice thinking it will provide them with a bullet proof investment strategy when a cheaper target date fund would serve essentially the same purpose, you may have actually exposed yourself to legal liability down the road when they realize the extra fees were not justified for their situation.

Why A Workforce Financial Wellness Assessment™ is a “Must Have” Before Making Any Decisions on What To Offer Employees

The only way to truly understand what employees need, whether you are looking to add tools, programs, or a holistic benefit is to better understand their finances, in a confidential, non-invasive way. The best way to do this is to provide them with access to an online financial wellness assessment which they can use to get a snapshot of their personal financial wellness and key next steps to take to improve their finances, including a Financial Wellness Score™ they can use as a gauge to track their progress.  Employees take five minutes, answer non-invasive questions about their financial habits, behaviors, and decisions they’ve made — without any account information collected — and you get an aggregated Workforce Financial Wellness Assessment™ detailing the following:

  • Overall financial wellness broken down by age, income, gender, location, and job classification.
  • Most pressing needs for each group— from money management to investing, saving for college, protecting their income and assets, retirement planning, etc.
  • Specific areas within each of these categories that are the most concerning so you can pinpoint which services are best for which population. For example, if 93 percent of those 45-54 are managing their money well and have their debt under control and investing sufficiently for retirement, but most have children and no life insurance and poor college planning strategies, those are the areas to focus on.  Conversely, if employees just starting out aren’t even aware of how basic benefits work, but actually have the free cash flow to be able to invest more money into benefits that are important to their future— there may be a need for financial mentorship programs that help them adjust to “real life” and fully maximize benefits they may not even be aware they have available.

The HR Benefit Manager’s Guide to Implementing Financial Wellness

May 12, 2016

Interest in financial wellness is exploding, and many companies have questions about what a financial wellness program is and how to implement one. Corporate benefit managers seeking financial wellness solutions are asking themselves, “Is this a wellness initiative?  A benefits initiative? Both? How do I find the solution that best fits our company?”

Five Common Mistakes Employees Make in Benefits Planning

March 17, 2016

I’m sure you’ve heard the phrase “start off on the right foot.” It’s a guideline that can be applied to everything in life, from starting a new career to getting married. But a lot of times, we make initial mistakes that lead to others – we’re not only on the wrong foot; we’re wearing the wrong shoes.

You probably see this with employees in their benefits plans: They are using their benefits wrong from the get go. Instead of helping them reach financial milestones, like retirement or to pay for costly health care expenses, benefits end up costing employees more or become lost opportunities.

As workplace financial educators, we often see the mistakes employees make with their benefits after it’s too late. Mistakes are common because employees are either unaware of or misunderstand their benefits. Here are the five most common mistakes we see.

  1. Going for the lowest premiums. Many employees think low-premium health care plans are best because they see an immediate savings. But, in reality, these plans can end up costing employees more later on if they have a major health issue and out-of-pocket expenses cost more.
  1. Setting it and forgetting it. Auto-enrollment and auto-escalation in company-sponsored retirement plans are valuable features to both the company and their employees, but they often give employees the idea that everything in their plan is on autopilot; they forget to manage their own increases and other options.
  1. Using target date funds with other investment options. Employees often misinterpret their allocation because they use target date funds as one investment option in their portfolio. But target date funds should be used alone or not at all. In this recent video, Target Date Fund Tips on Forbes.com, our planner Erik Carter shares tips on how to use them properly.
  1. Buying and selling at wrong times. Employees who are actively managing their investments are often trying to time the market but end up losing value because they are buying at high points, rather than low ones. As much as we would like to “buy low,” active trading is a common mistake that often leaves employees short of retirement goals.
  1. Unaware of the benefits they have. Probably one of the most detrimental mistakes employees make about their benefits is not knowing what they have. Many companies now have preventative health and financial wellness programs that offer incentives, such as tuition reimbursement and life insurance, which is often less expensive and easier to qualify for through an employer than individually.

Benefits, in the scheme of everyday life, can help employees not only meet milestones and pay expenses but also build wealth. If you’ve seen mistakes that cost employees, share them with us. As plan providers, you can educate them on common mistakes, so they can maximize their benefits. If you would like a worksheet you can share with your clients and their employees, e-mail us at [email protected].

 

“Bright Spots” in Benefits Communication and Education

March 17, 2016

We’ve all heard that we learn more from our failures than our successes.

 

But is that really true?  Recent research demonstrates the opposite to be true—that there is actually a tremendous amount we can learn from our success.  And, further, that leveraging our successes can create major, systemic change and transform cultures within organizations, often in relatively short amounts of time.  In their best-selling book, Switch, Chip and Dan Health call these successes “bright spots” and draw upon large scale research studies to show the impact of studying and replicating success.

We’ve seen the same thing from a benefits communication and education perspective:  Most employers have experienced major successes in their benefits communication.  Maybe not consistently, but if they go back over the last few years they can identify campaigns that really engaged employees, significantly increased  participation in benefit programs, and really helped employees better manage their benefits.  In some cases, the campaigns may have been so successful they took on a life of their own—becoming viral and even institutionalizing themselves into a culture as an annual event or contest.

 

When we work with employers, we recommend they examine their best campaigns and initiatives—starting with benefits communication and planning but expanding into overall HR initiatives to determine what the successful programs have in common.  In every case where our clients have gone through this exercise, they’ve been able to identify common themes.  In some environments, a sense of community is extremely important.  Therefore, creating a forum where employees actively participate in the dialogue and interact with each other is vitally important.  For others, it’s about target marketing—getting the right groups the right information in the right way at the right time so the communication has a highly personal feel.  In other cases, it’s about repetition and making it part of day to day communications and ultimately the culture of an employer group—or even making it part of employee identity.  Of course there are always those environments that are all about fun—where employees work incredibly hard and can become burned out and immune to communications because they simply don’t have the energy or enthusiasm to look at one more thing.  In these environments, it’s about creating special occasions and events that are fun and allow employees to get their minds completely off work and focused for a moment on themselves and what they need to do to maximize the benefits they have in order to achieve their most important life goals.

 

At the end of the day, every company is different, but you can almost always find a pattern in your success, and then use these patterns as your roadmap in developing new campaigns that will resonate with your employees.  Over time, you’ll end up developing a brand and culture  associated with your benefits communications that differentiates your company as an employer of choice and creates a more cohesive (and ideally a more fun) working environment.

Ending Open Enrollment Insanity

November 09, 2015

How many bad decisions do employees make during limited decision periods?  Is there a way to make this crazy period easier for both the workforce and the benefits team?  Can “benefits planning” make life easier for everyone all year long?

Why an Article About Millennial Finances Made Me Mad

October 02, 2015

Should young people not worry about saving money, and focus on enjoying life and having experiences? A popular article advocating this approach prompted Liz Davidson to disagree. She explains why Millennials are making financial progress, and offers strategies to foster millennial employee engagement, such as leveraging technology, building communities, and approaching financial wellness in a holistic way.