It’s no surprise that financial wellness programs are trending. The shift has been on the rise, recently with 56% of employers reporting a commitment towards their workers’ financial well-being, according to an Aon Hewitt study. Programs are grabbing employees’ attention too. In a TIAA survey, 71% of Americans expressed an interest in receiving financial advice.
As growth in appeal increases, the question still remains: Why do some programs continue to flop?
“One big reason financial wellness programs fail is that they focus on ‘education’ and financial literacy, which simply do not inspire or empower behavioral change,” says Carla Dearing, CEO of financial planning service SUM180. “It’s very tempting to think, ‘If we just show people the steps, they’ll be able to do them.’”
Whereas financial literacy focuses on specified concepts and how-to’s, Dearing recommends offering programs that incite principles of behavioral finance such as privacy, control and feedback to help employees succeed.
One tool Dearing suggests can improve financial wellbeing is a personalized assessment, where workers’ needs are pinpointed to then offer detailed solutions. Whereas many may feel uncomfortable speaking about finances in a group setting, personalized assessments offer key resolutions tailored to an employee’s vulnerabilities and lifestyle. “They really need to start where the employee is. And they can’t know without asking for information,” says Dearing.
Like Dearing, Liz Davidson, CEO of Financial Finesse, believes these assessments give employers’ the ability to better assist workers. “What they’re [employers] doing is really targeting the specific groups with the right type of topics and the right kind of messaging, so it’s much more relevant and focused.” says Davidson. “Once you know more about your different employee groups and what those points of intimidation or vulnerability are, you can develop a strategy around how you take down those walls.”
Employees seem to be supporting fans of the tool as well. Surveys have reported workers prefer personalized assessments and one-on-one advice that study unique conditions to then offer detailed solutions.
These assessments take a worker’s financial challenges, priorities, family structure, investing confidence, retirement preparedness and more into account. As a result, employees acquire habits and strategies that result in success, rather than study new ideas through traditional educational means.
“It’s something that you do each and every single day, and it’s something that you control, says Davidson. “Versus education, it is a way to assist with making specific decisions or understanding concepts.” NEXT: Education is still important