Financial Wellness: The New Frontier

By Randy Myers

Until recently, employers’ interest in the financial well-being of their employees was typically focused on one thing: helping them save for retirement. Today, employers are viewing financial wellness more holistically. In fact, says Amy Glynn, managing partner with GRP Advisor Alliance, to do otherwise could be missing the mark at a time when American workers are struggling with a wide array of financial challenges, including student loan payments, debt management, buying a house, and caring for children or dependent parents.

“Certainly, saving for retirement is the end game, but it’s tone deaf in today’s world,” Glynn said during a virtual roundtable discussion on financial wellness at the 2020 SVIA Fall Forum. Her firm, GRP Advisor Alliance, is an independent network of more than 530 retirement plan advisors across the country. Other panelists included moderator Chris Solimine, senior vice president, institutional clients, with Voya Financial; Ken Verzella, head of the Financial Wellness Group at MMUS Investment Solutions at MassMutual Financial Group; and Andrew Frend, senior vice president and head of strategy and analytics in the employee benefits group at Voya.

While acknowledging that there are many definitions of financial wellness, Verzella pointed to one developed several years ago by the Consumer Financial Protection Bureau: a state in which a person has control over their day-to-day goals and the capacity to absorb a financial shock, is on track to meet their financial goals, and has the financial freedom to make choices that allow them to enjoy life. This definition resonated with Fall Forum participants that defined financial wellness in terms of securing their future and protecting those they care about in a flash poll.

Frend noted that one reason financial wellness is striking a chord with employers—indeed, many now offer financial wellness programs—is that research has documented that financial wellness provides benefits around productivity and presenteeism in the workplace.

To work as well as possible, the panelists agreed, financial wellness programs must consider the needs and circumstances of employees at all income levels, not just those with high incomes. Frend recalled talking to a nurse who had just gone through her employer’s open enrollment process. She had just had a baby, had student loan debt, had no life insurance, and was not saving in her 401(k) plan while she tried to pare down her debt. She was stressed, and perhaps put off, by the advice she was receiving during the open enrollment process to maximize her 401(k) contribution, maximize her contribution to her health savings account, and buy more life insurance because she’d just had a baby. She said she simply couldn’t afford to do all those things.

Acknowledging the many difficult choices people like that nurse must make, Frend said the industry could take a leap forward by helping people optimize their choices around the incredibly complex products offered to them in a way that improves their probability of becoming financially successful.

All this has become even more important in the wake of the COVID-19 pandemic, the panelists observed, especially for low wage earners with little savings who may have worked in businesses particularly hard hit by the pandemic’s economic fallout.

Verzella noted that many people have actually worried more about their financial health than their physical health since the pandemic broke out. In April, Glynn added, calls to employee assistance programs, including suicide and in-the-moment counseling lines, skyrocketed.

To further maximize the value of financial wellness programs, the panelists reiterated that providers and plan sponsors should offer programs flexible enough to accommodate the varied needs of a diverse workforce. They also should be transparent about how they will use data collected from individuals, create incentives to drive employee engagement, and track usage metrics to understand what’s working and what needs to be improved. Going forward, the panelists said, employers will increasingly demand that financial wellness providers be able to document how they are actually helping workers improve their financial wellness.