Why financial advisers should be in your employee wellness plan

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Financial adviser Daniel Lee, lead wealth manager at Plancorp’s Bay Area office, received a panicked phone call last year from one of his clients about a drop in the market. The client was worried that the decline would impact his finances and alter his plans for retirement. Lee quickly reassured the client that he was in no danger, as the plan he had devised had a very low risk tolerance. With one conversation Lee was able to alleviate that client’s fears.

Financial wellness benefits have become a trend among employers, but there is one key element missing from these programs — financial advisers. Giving employees access to the assistance of a financial adviser can help to improve their finances and alleviate stress, resulting in a happier and more productive employee.

“Based on the very overwhelming burden of financial stress, and the fact that the vast majority of the workforce experiences it, financial wellness or well-being has become a key part of any well-rounded and attractive benefits strategy,” says Danielle Schweiger, a benefits consultant with Gregory & Appel Insurance.

Incorporating a financial adviser into a wellness program wouldn’t necessarily be a difficult undertaking for an employer. Of course the conditions of the adviser may vary, step one is as simple as reaching out to your benefits consultant, Schweiger says.

Financial concerns are the biggest cause of stress among employees, according to data from consulting firm PwC. Indeed, 59% of employees surveyed say uneasiness over money causes the bulk of their stress, and 35% of employees are distracted by their finances while at work.

When you have a workforce made up of people who have just graduated and others who are about to retire, tossing a financial adviser into the mix is going to accomplish two things, says Roy Janse, a certified financial planner and managing principal of the wealth management firm DeHollander & Janse Financial Group.

First, it will help make sure employees are getting customized advice for their specific situation. Second, it will allow employees to implement that advice in a way that goes beyond what the company can offer by exposing them to new financial products.

Financial advisers are aware of the important role they play in the lives of their clients. But many financial advisers choose to target high-net-worth individuals, rather than average-Jane Americans, because that is where they can make the best living. This results in the misconception that the average consumer doesn’t have enough money to need a financial planner.

“People have told me, ‘I don’t make enough money to have an adviser’ or ‘I’ll work ‘til I drop,’ I hear that routinely,” says Thomas Duffy, a CFP and president of Jersey Shore Financial Advisors. “I just ask them, how do you think people with financial advisers got to that point? It was by working with a financial adviser, before they thought they could afford it.”

For an employee to say they need to be in a good financial position before consulting a financial adviser, is like someone waiting until they get in shape before joining a gym, Duffy says.

“There are a lot of folks who may believe that financial advice is just helping rich people get richer,” Duffy says. “My job is to give [clients] enough information for them to make a good decision. Most of what I do is educating people on the how and why.”

When asked what benefit they don’t currently have, but would like to see added in the future, more than one in four employees said a financial wellness benefit with access to unbiased counselors, according to PwC.

A Consumer Financial Protection Bureau study showed that on average every investment dollar employers make toward a financial wellness solution for their employees garners $3 in return. “It’s kind of a no-brainer given that it helps your employees and that in turn helps the employers as well,” Lee says.

Employees will be able to make good choices if they have an understanding of how to better manage their finances and understand all of the benefits their employer is offering — including healthcare — Duffy says.

Financial wellness benefits have really started to become a focus for employers over the last decade, says Julie Schweber, a 20-year HR industry veteran and HR Knowledge Adviser for the Society for Human Resource Managers. One of the things she believes may be driving this effort is the frequency in which Americans are retiring.

It’s estimated that 10,000 Americans retire every day, according to Pew Research Center data, but employers have begun to realize that employees are feeling insecure about their financial future, Schweber says.

“More Americans are living paycheck to paycheck and employers and HR are recognizing that people struggle financially,” she says. “The worst case scenario is we have two-thirds of employees who say retirement [savings] and Social Security won’t be enough to support them. It’s important for employers to recognize that.”

But the retirement or pre-retirement focus is only one side of the story, she says. There are also the newer, younger employees who are just starting out and may not be thinking about retirement, yet still have their own unique financial needs, to focus on.

“An employer wants to customize any retirement or wellness plans to the different populations, because they don’t speak the same language and likely won’t be interested in the same things,” Schweber says.

Access to an adviser also can be a strong recruitment and retention tool, Schweber says. When employees feel their companies care about them they are twice as engaged at work, four times less likely to suffer from burnout and nine times more likely to stay with the organization, according to data from Limeade, an employee engagement measuring platform.

While recruitment and retention remain at the forefront of employers’ thoughts, they are also concerned about the cost of such benefits. If an employer is truly committed to investing in the well-being of their employees than they will be able to find a benefit solution that works for everyone.

“There are many financial wellness benefits out there that can be set up at little to no cost to the employer, as well,” Schweiger says. “Another good strategy is to start the process of designing a program by first polling the employees to see what is most valuable to them, and then go from there.”

The cost of more intricate benefits programs can be a concern for employers, but cost can depend on what an employer chooses to deploy, Schweiger says. Access to earned wages programs and some student debt refinancing programs can be offered for little or no cost to the employer.

“However, contributing to employee’s student debt payoffs would obviously come at a cost,” she adds. “There are options all the way across the cost spectrum. The benefit of contributing to employee’s financial well-being is definitely worth the value and enrichment it brings to their lives. If retention is an important factor for an employer, financial wellness is quite worth the investment.”

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Financial wellness Financial planning Financial stress Financial literacy Retirement planning Retirement readiness Client relations Client strategies