“The tide has shifted, and never before have we seen so many employees focused on long-term planning,” notes Financial Finesse in its quarterly Trend analysis research. The firm describes itself as a “provider of unbiased financial education programs to corporations, municipalities and credit unions”.
The report notes that in the third quarter, more than 1 in every 4 calls (26%) into the firm’s Financial Helpline was related to retirement planning, and in total, over 60% of employee interactions involved discussions surrounding long-term planning issues. According to the report’s authors, “This gives us the impression that employees are beginning to regain confidence in their overall financial picture”.
The report notes a significant turnaround from the second quarter of 2010 when long-term planning calls fell to just 37% of all calls – a number that “skyrocketed” to 61% of calls in the quarter just past. According to Financial Finesse, after retirement planning, the next two top subjects were Investing and Budgeting & Saving, each at 16% of all calls. “This is a leap from where we were one year ago, when retirement planning calls only represented 16% of all calls, and Investing and Budgeting & Saving calls represented 11% and 21% of all calls, respectively,” according to the report.
However, the report cites as “most surprising” the increase in estate planning calls (up from 2% in Q3 2009 to 7% in Q3 2010), and the decrease in debt related calls (dropping from 25% to just 15% over this same period). “As more employees get a handle on their current financial situation, they are able to direct their attention to longer-term issues,” according to the report.
Other notable declines came in the areas of:
- Budgeting & Saving (down from 21% to 16%)
- Real Estate (down from 10% to 5%).
That said, worker stress levels remained unchanged after the third quarter, with a full third of employees reporting “high” or “overwhelming” levels of stress, compared with 23% reporting “low” or “no” financial stress. Financial Finesse notes that, while the stress levels are unchanged, “we expect to see financial stress trending slowly downward over the long term as employees continue to progress in their proactive financial planning efforts”. However, the report also cautions that “this shift will be slow, due to the uncertain economic environment, and because this recession has taught employees that their financial situations can change suddenly.”
The report’s authors note that the “good news is that employee financial stress is at a level where it appears to be increasing employees’ urgency rather than panicking them. Impulsive decision making is decreasing, and long-term planning is increasing”.
The top five questions asked on the Financial Helpline in Q3 were:
1. How much do I need to retire and how much should I be saving?
2. What strategies will help me reduce my debts?
3. How do I choose the right investments in my retirement plan(s)?
4. How do I put together a budget?
5. How do I choose the right investments for my goals?
The research is compiled by tracking calls into Financial Finesse’s Financial Helpline service, which is available to over 500,000 employees from more than 300 organizations.
Financial Wellness and Retirement Preparedness data is compiled by tracking employees’ usage of Financial Finesse’s Online Financial Learning Center which provides employees with a personalized financial education plan and analysis of their current financial wellness. Employers and employees are located across the country—in similar proportion to the demographics of the national population, according to the report.
More information is available at http://www.financialfinesse.com/special/research/Trends-in-employee-financial-issues-Q3-2010.pdf
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