Addressing the Financial Wellness Opportunity

The demand for financial wellness programs is growing significantly due to the increased challenges of improving the financial health and well-being of the average American. For many Americans, making sound day-to-day decisions is a struggle. The statistics are startling but clear:

    • 61 percent can’t answer more than three of five questions correctly on a financial literacy quiz
    • 54 percent don’t have enough money set aside to cover three months of unexpected expenses
    • 16 percent spend more than 20 hours each month worrying about personal financial issues while at work

What should you expect from a smart financial wellness solution?
A well-designed financial wellness program leads to positive outcomes for participants, including improvements in their knowledge, confidence and behaviors related to their personal financial well-being.

Other financial wellness programs benefits include:

    • Increases in benefits participation–not just retirement benefits
    • Improvements in participant engagement
    • Creation of robust participant profiles
    • Generation of actionable data for marketing, messaging and communications
    • More effective and efficient benefits education
    • More productive and engaged workers
    • Improved morale
    • Lower absenteeism
    • Lower stress
    • Lower health care costs

Employee engagement is critical
Well-structured financial wellness programs should be viewed as innovative engagement solutions that can help businesses gain powerful insights and actionable data into participant financial needs.

By using this information to drive the wellness program design and engagement strategies, wellness programs can be used successfully to connect participants to the benefits (or more broadly, the financial services) that are most relevant to them—even if initially the participant was not aware of the product, or their need for it.

Equally important, wellness programs can also provide insights and data into why employees may or may not be participating in the employee benefits available to them.

Resources for self-discovery can help employees make the plan relevant
There are many ways to gain these much-needed insights such as introducing participants to the wellness concept by first offering a financial health assessment. Or, participants can be given access to tools and resources that encourage “self-discovery” and raise awareness of their financial health and needs. These approaches improve engagement and create opportunities for individuals to dive deeper into areas of their financial well-being that will be most meaningful to them. They can also then access the part(s) of the wellness program that will motivate them the most to take action. The data and insights that can be mined from these efforts are paramount in designing a successful program.

Engagement and positive reinforcement lead to long-term success
For example, one goal of a financial wellness program could be to encourage all employees to save 6% of their income for retirement, but that goal could be in direct conflict with what is best for one individual participant. Simply put, this outcome is quite arbitrary and does not account for other financial needs or goals of the individual.

What’s more, even though 6% might be generally accepted as a good target savings rate for participants, it is quite lofty as a wellness program outcome for all employees, and it misses the real opportunity to achieve organizational outcomes. In other words, if some participants increase their savings from 0% to 1%, while others from 1% to 2%, and so on, they are far from the 6% target. As a result, the financial wellness program could be deemed a failure. However, in reality, each individual’s progress should be celebrated, and the cumulative achievements of all participants should, in this example, deem the wellness program a great success.

Furthermore, participants will feel a greater sense of accomplishment that they are making progress rather than being reminded that they are falling short. This approach also helps to sustain engagement in the wellness program over time.

It’s all about the user experience
In terms of engagement and outcome achievement, it is impossible to know which aspect of a financial wellness program will lead participants to take action. Some participants might take action after being exposed to educational content. Others might be motivated by using interactive tools. Others still might simply need to see how their situation compares to their peers before taking action.

This reality speaks to the need to have a flexible, multi-dimensional wellness program so that participants have options to achieve their goals and improve their financial health and well-being.

Equally important, every dimension of a financial wellness program must be inviting. Every opportunity for interaction must be engaging. The goal must be to create a user experience that promotes self-discovery, creates heightened awareness and an improved understanding of ones financial health and needs. This will then motivate appropriate action for each participant. Additionally, the more comfortable a participant feels telling their financial story, the more data can be acquired and then used to further engage and personalize the user experience. One of the other critical success factors to drive engagement is to create a unifying user experience that helps participants navigate the myriad of resources, services and products available to them. Participants benefit when they receive personalized guidance that can lead them to take action.

There’s great value in a well-designed and implemented financial wellness plan
In conclusion, well-designed financial wellness programs can generate measurable value for employers and providers. Ad hoc approaches to designing and implementing financial wellness programs simply don’t work. Investing in product innovations, program design, content, tools and resources will not yield the ROI employers and providers seek unless there is a focus on participant engagement that helps them navigate the options available to them.