January brings new beginnings. From resolutions and crowded gyms, to diets, and promises to do or be better at just about everything, January is also, and we think most importantly, Financial Wellness Month. Wellness has taken the #trend charts by storm and, while fitbits, juice cleanses, and yoga classes are indeed part of the wellness equation, a core piece of that puzzle is, you guessed it, personal financial health.
Consider this: financial stress is directly correlated to health. So, when a person is worried about his or her finances, that stress affects that person’s health, physically and mentally. Life is unpredictable and can be complicated, but having the financial resources to handle things when life’s inevitable curveballs get thrown is vital to keeping oneself ‘fit’ in every sense of the word.
What Financial Wellness Entails
Financial wellness is defined as an intricate balance of the mental, spiritual and physical aspects of money. Financial wellness is having an understanding of a person’s financial situation and taking care of it in such a way that he or she is prepared for financial changes. As everyone knows but rarely does much about, this vital component of wellness is often neglected — leaving people worried about what might happen and the financial consequences.
When the unexpected becomes the reality though — things start to unravel — and it is that unpreparedness that has led us to the financial crisis we face today. Financial Wellness Technology (finwelltech) is defined as the software required to power a fully integrated, comprehensive, configurable financial wellness program. It is software that is utilized to guide people toward the state of financial well-being.
Finally, Financial Wellness Programs are comprehensive programs designed specifically to assist employee populations. Financial wellness programs should incorporate financial wellness technology in a tailored, holistic, and connected way to get a true view of employee personal financial health. These programs often incorporate human advisors, other existing technology, training programs, and resources, content, and more.
Retirement Plan Consultants Swap 401k for Financial Wellness
Most 401(k) and 403(b) advisers like to ‘stay in their lane,’ according to Investment News, and ‘stay clear of other company benefits‘. This year, though, retirement plan consultants break free and repaint their lanes with a muralistic picture of what should be, rather than accepting the black and white lines of the past.
Financial wellness, however it has been defined or understood in the past, is the overarching umbrella that encompasses everything relating to personal financial health. 401ks, mortgages, debt, savings, life goals, etc. All fall under this umbrella, and every person’s strategy for meeting their goals has to be different because every person is different.
Look for retirement plan consultants offering configurable, financial wellness solutions to their large employers clients this year. With the ability to maintain processes, keep purchased systems and tools in place, along with seamless integration into day to day life, financial wellness technology has the power to make this holistic vision a reality and technologically optimize the financial health of employees everywhere.
In 2018, consumerfinance.gov reports that retirement plan consultants shift their thinking in this way. They will continue to broker 401ks as PART of their financial wellness offering, rather as a bolted on box check that offers little long term value or participant behavior change. Plan consultants have a fiduciary responsibility to guide their customers and their participants down the path that best helps all parties reach their goals. This year, the dominoes start to fall, and they look different than they used to.
People Getting Hooked on Financial Wellness Tech
Employees overwhelmingly say they will participate in financial education programs. They’re open to new things. Forward thinkers and proactive planners may even already use tools like Mint and Acorns for budgeting and micro savings. But, the siloed nature of tools like these, coupled with people’s Amazon-level expectations, leaves a lot of room for improvement.
People want a modern, simple user experience that gives them not only a comprehensive view of their financial situation, but also a guided, personalized path to reach their goals and stay accountable. At consumerreports.org they report that this year, they’ll get it.
With more and more employers looking to their trusted retirement plan consultants (think: those who manage company 401ks) for help in this arena, employees will be a few clicks away from a life changing tool they’ll be hooked on.
Financial Wellness Benefits Becoming More Holistic
Because employers will demand financial wellness programs that work, financial wellness programs will become more comprehensive and connected in 2019. For example, if you’re familiar with the history of the 401k, it was never intended to be an end-all-be-all for financial freedom in retirement.
At Kiplinger they report that as it stands, it’s nearly impossible to measure progress, or even get a clear picture, with the siloed nature of all the money tools, tricks, and portals out there. Disconnected apps, 401k programs, student loan debt, mortgage payments, the list goes on — all of these create a completely incomplete picture of any person’s true financial situation. How then, without seeing the complete picture, can anyone expect anyone to get better?
Financial wellness technology (FinWellTech) with native scalability, configurability, and its ability to integrate with existing ‘things’ (think: other software, programs, tools, etc) is the answer to this fragmented mess. Companies like our friends at Yodlee are making massive strides in this arena, piping outside asset information in, and powering a more transparent and true financial picture.
Employers Demanding Financial Wellness Programs
More than half of American employees are stressed about their finances, according to the 2018 PwC Employee Financial Wellness Survey, and really, it’s far more than that. More than three quarters of those stressed employees say their stress has increased over the past year. Close to 90% of employers already have financial wellness programs of some sort in place, with many more hopping aboard. They have tried educational programs, lunch n’ learns, app offerings (think: Learnvest, Mint, Acorns, etc), and more, but behavior change from these early solutions just hasn’t happened.
In 2019, employers will demand better tech. They don’t want band-aids or old school solutions that take up time and pair well-ish with lecture-backed bagels. They want comprehensive solutions that work with their systems and allow their employees to make tangible, measurable, actionable steps toward living financially healthier lives and toward financial well-being.