The Need To Change the Conversation

Posted on March 2, 2017. Filed under: Consultants |

Last month I announced our new strategic partnership with Financial Literacy Toolbox.  It is clear from the feedback we have received that our new and improved approach is lining up with what our advisory community is looking for.

Delivering simple financial wellness tools in an effort to help plan participants improve their financial lives is a goal for many of us.  The struggle has been that, to date, our industry has done a poor job of truly connecting with participants.  Additionally, the advisor has not been incentivized to offer these tools because it has not helped them with their #1 business objective – which is to grow the business.

This is why I am so pleased that our message, and new menu of services, really seems to have resonated with advisors.

This month I offer to you an article that Mark Singer, Founder & President of Financial Literacy Toolbox wrote.  He strongly believes we need to change our perspectives in order to get some traction as we look to rollout financial wellness in the corporate world.

If after reading the article you wish to learn more about our cutting edge solutions, please click below to request we reach out to you:

Is Financial Wellness a Waste of Time?

Over the past three years, I have had the opportunity to speak in front of hundreds of advisors on the topic of financial wellness. For financial advisors in the retirement plan space, this subject is quite compelling and was often one of the best-attended sessions at the conferences where I was a featured speaker.

Let’s take a look from 30,000 feet as to why this topic is so hot.

First, studies illustrate just how poor a job our industry does of influencing plan participants with the traditional “retirement ready” conversation. Some would argue that without the “autos” that have been adopted by many plans, employees would be in even worse shape than they are now (this is defined by how small the average plan participant’s balances are).

Second, the employees are feeling more financial stress and are asking for more guidance. Companies understand the need to offer more guidance, not only in an effort to help their employees accelerate their retirement savings, but as a way to create less stressed, more productive workers, which in the long run can make a positive impact on the employers’ bottom line.

Finally, a recent Aon Hewitt study indicated that a high percentage of companies, of all sizes, will have adopted financial wellness as a standard offering within the next 7-10 years. Add to this the fiduciary responsibilities of those providing services to the retirement plan space, and one can understand why this topic is so timely and attracts so much attention from financial advisors who are looking to thrive in the retirement plan space.

Thus, advisors see the opportunity to step in and offer solutions that can make a difference with both the plan participant and the plan sponsor, at a time when the advisory community is facing challenges as well. The competition is fierce, and differentiating one’s firm is getting more and more difficult. Traditional marketing efforts are not as effective. The landscape is shifting in terms of where investors are getting their information and how they are making their decisions, and the result is that many seasoned advisors are having great difficulty adding new assets to their firm.

It should not be a surprise, then, that financial advisors, seeking new ways to grow their business, are looking toward financial wellness as a solution. But there is a tremendous disconnect between the idea of delivering financial wellness and the actual execution of it. And herein lies the problem, as I see it.

Financial wellness is not easily defined. Kristie Howard, Senior Health & Benefits Consultant at Mercer, has called financial wellness the “wild wild west”. There is no clear definition of what financial wellness is, or how it should be delivered, not to mention that it is a major undertaking to create, deliver and benchmark a program to hundreds of employees.

Making matters worse, I have spoken with numerous providers in the financial wellness space and I hear that the utilization rate of virtual tools offering guidance is as low as 10%-20%. And because such a small percentage of employees embrace these new tools, many advisors who fell in love with the idea of financial wellness as a business-building tool are frustrated with the results. Most advisors are not interested in spending the time, money and resources to offer financial wellness if they cannot benchmark tangible success – that being new assets or new plans.

So the conclusion for many is that this is a “waste of time”. This was reinforced in a conversation I recently had with Charlie Epstein, founder of the 401k Coach Program. Charlie said, “I believe teaching financial literacy in the workplace is a misguided notion.” He went on to say that as busy as employees are, it is going to be very difficult to gain their attention for a long enough period of time to make an impact on them.

I understand what he is saying, and I understand the frustration advisors are feeling; I just think we are looking at this the wrong way. Instead of seeing that “only” 10%-20% of employees are embracing financial wellness and concluding that this is a failure, why not look at those who are willing to engage in the process as the start of something good?

I say we should focus on those who truly appreciate the opportunity to improve their financial lives, and give them tools to reduce their stress and improve their situation. I say instead of trying to deliver financial wellness to the masses, and feeling frustrated that most will not understand it or take the time to engage with us, we should find those who are willing and build our successes one at a time.

I have taken that approach in my business, as I have used the tools I now offer to other advisors. I strongly believe that with a new focus, we as advisors can make a significant impact on others’ lives, and find that financial wellness can be the means to the end, which is finding a new way to build our business. The key to that is to hit the “easy” button.

Kay McManus with BPAS Plan Administration & Record Keeping Services and I were talking about the problem advisors were facing. We were discussing that many of the financial wellness programs are too broad, almost a shotgun approach, which was creating tremendous frustration for advisors. Kay mentioned that an effective program must be both easy for her financial intermediaries to implement and easy for the plan participant to embrace.

If we can focus on those who wish to spend the time to improve their lives, and deliver easy-to-engage tools that can be easily benchmarked, then delivering financial wellness will not be a waste of time. We will make a significant impact on those who are willing; we will be able to gather success stories for their colleagues in the future; and we will be able to leverage the delivery of financial wellness as a successful business-building tool.

Mark Singer, CFP®, AIF® is a leader in the world of financial education. Mark is the author of three books, a frequent speaker at events, and is the creator of The Financial Literacy Toolbox, a virtual resource center to help financial advisors, wellness providers, or institutional retirement services firms change the conversation about financial wellness

Make a Comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

  • Who We Are

    RJ20 was created by Certified Financial Planners™, passionate about helping every day people by bringing their services to those who most need it, without minimum requirements or product sales of any kind.
  • RJ20Online

    Error: Twitter did not respond. Please wait a few minutes and refresh this page.

Liked it here?
Why not try sites on the blogroll...

%d bloggers like this: