Financial Professionals on Financial Wellness

A recent study examines financial professionals’ views on financial wellness. 

In the study, “What Financial Professionals Think About Financial Wellness,” T. Rowe Price in conjunction with Duke University’s Common Cents behavioral finance lab and financial wellness provider Retiremap look at what financial professionals think about financial wellness, how wellness programs can be applied and what it all means for them and their profession.

Why Offer Financial Wellness Benefits? 

The financial professionals surveyed offered a variety of reasons for offering financial wellness benefits. At their core, they are good for business, says the report. For instance, it says, doing so can help a business to differentiate itself from its competitors and build itself. It is especially important for a business, to differentiate itself, the report says, during a time of fee compression. The top reasons the financial professionals gave for offering financial wellness benefits included that they:

• are an “innovative and compelling way” to broaden the value of one’s business; 
• present an opportunity to capture rollover IRA assets;
• offer fresh investment opportunities;
• provide a way to differentiate one’s business from one’s competitors; 
• make it possible to expand wellness to entail more than just basic matters; and 
• are a trend of the future. 

What Do Financial Wellness Benefits Programs Entail? 

At their most basic, said the respondents, financial wellness benefits concern: 

• retirement savings;
• debt management;
• budgeting; and 
• emergency savings. 

But financial wellness benefits can entail more than that, they said, and also can address: 

• saving for health care;
• saving for college;
• satisfying a mortgage; 
• estate planning;
• tax planning; and 
• Social Security. 

Implementation

Neither interactions with people nor technology alone are ideal in implementing a financial wellness program, said the respondents. Rather, the financial professionals said, balancing both will result in a “robust” program. The most important tools, they said, are: 

• in-person, education-based group meetings;
• apps that monitor finances and track accounts;
• means to automatically manage income and cash flow; and 
• short, prescriptive steps that can be achieved in set time frames.

“Financial wellness solutions may work best using a range of tactics and resources,” say the researchers. 

What this Means for Financial Professionals

The report argues that in discussions with employers about financial wellness programs, financial professionals should present them as something broadly applicable to their workforce. And, it adds, such an approach would be especially beneficial for businesses that design and sell those programs.