With a new president and administration heading to the White House come January, more experts are pushing for effective financial wellness education strategies to be implemented nationwide.
President-elect Joe Biden has outlined plans for taxes, retirement planning and Social Security, but he has yet to announce a strategy for nationwide financial education in a year in which the pandemic has aggravated financial illiteracy, especially for lower income workers without proper resources, says Kenneth Van Leeuwen, managing director and founder of Van Leeuwen and Co.
“Internet connections and learning tools are second nature for many, but, for a lot of lower income people, these are the folks who are going to need more financial wellness education,” he notes. “Many don’t even have an internet connection where they can go and do an online tutorial for some type of incentive-based education.”
John Lowell, an Atlanta-based partner for October Three, says engaging workers in a remote work world is more difficult than it was in a traditional one. “If you’ve got a worksite that has 200 people and you want to do multiple financial education seminars, you can ask participants to sign up for any one of them,” he explains. “In a remote world, while many people have internet and Zoom access, in other businesses it’s really not an easy thing to do.”
In September, the Department of the Treasury released a report called the “U.S. National Strategy for Financial Literacy,” highlighting best practices for financial wellness education. But Van Leeuwen says the country needs a concrete, actionable solution to encourage workers to engage and participate in financial wellness offerings from employers.
Therefore, incentives will largely drive future engagement with financial wellness and could even become national policy, he says. Such incentives may come in the form of tax credits or rebates on the national stage, or smaller, company-tailored rewards such as gift cards or cash-based credits on an individual firm basis. For example, an employee who enrolls in a 401(k) and completes an online financial education class would receive a reward for their time and attention.
But lower income workers without access to a computer or internet connection lack the resources to complete an online certification, even though this group needs financial wellness education the most. Van Leeuwen says one solution would be to require financial advisers to volunteer time teaching in-person financial education to people who need it, even if it’s meant as a continuing education (CE) prerequisite for advisers. “As advisers, a thing we should be required to do is give back to our communities,” he says. “We should be required to give up our own time to teach people with lesser means on making contributions to retirement plans and on financial wellness.”
Yet, with COVID-19 cases rising throughout the country and many workers and business owners afraid of the looming possibility of businesses shuttering again, it’s unlikely any in-person classes will be in session for 2021. In fact, the Biden administration likely won’t make financial wellness education a priority in the next year. Instead, vaccines and getting people back on their feet will take precedence. “This is one of the soft issues currently. This year and next year, it’s going to be all about the pandemic and how we provide a stimulus to those who have struggled during this time,” Van Leeuwen adds.
But even as COVID-19 vaccinations take priority, Lowell says he still anticipates financial wellness education will be an emphasis in the future. The past year alone has exemplified a need for financial education in workforces, as more employees demand education strategies from their employers. “Employees continue to call for it, and employers are not being resistant but also are not really knowing how to add it [to their plans],” Lowell says.
With a new president comes a fresh administration, including a new Department of Labor (DOL) secretary. And while the nation won’t know until January which party wins the Senate, Lowell says it is clear that cooperation will be needed from both Democrats and Republicans for financial wellness education reform. “There’s going to be this need for negotiation from both sides,” he says.
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