Some employers find that financial wellness programs have much to offer: informing and empowering employees to better prepare for their current and future financial security, as well as enhancing their relationship with their employees. And at a comparatively low cost, to boot. A recent article suggests factors to consider before offering one.
In “Considering a Financial Wellness Program for Your Employees: Make Sure You Ask These Questions First,” a piece appearing in Forbes, Liz Davidson of Financial Finesse writes that such programs “are becoming much more common” and cites statistics Aon Hewitt compiled in which 81% of employers they approached said that providing financial wellness programs is “the right thing to do for their employees.”
Davidson reports that her organization “is increasingly asked to analyze the effectiveness of various programs and approaches,” including ways to better define implementation of a financial wellness program that is effective. She suggests that an employer considering a financial wellness program should ask prospective vendors questions in three areas before entering into an arrangement in order to protect employees and help ensure that the program will succeed.
Business model and connections with financial services companies. Davidson calls it “absolutely critical” to ask a potential vendor about:
- their business model;
- how their firm makes money;
- what financial arrangements they have with financial services companies; and
- whether they are owned wholly or in part by a financial services company.
Davidson stresses the importance of an employer remembering the obligation to make sure that financial guidance offered to employees is in their best interest.
Whom from the vendor will work with employees. Davidson argues that this, and how they will be compensated, are the “most important criteria when looking for a financial wellness vendor.” She calls it “absolutely critical” to consider this if the potential vendor is a financial wellness company or has a formal relationship with a financial wellness firm to deliver services. She is especially concerned about providers that outsource to “a network of financial planners,” as well as the level of experience of professionals who will work with one’s employees.
Record and success. Davidson suggests asking a potential financial wellness vendor about the impact that their programs has had on employees’ finances. She adds that an employer also could consider asking about how the vendor has affected client employers’ bottom lines.
“You want to make sure that the benefit is actually having a positive impact on employees,” Davidson says, adding that programs that are highly effective also can reduce the risk an employer faces as a fiduciary of its retirement plan. In addition, she argues, a vendor can make an employer “a true partner” in its employees’ financial security and help make it part of an employer’s culture and commitment to its employees. “That’s a true differentiator for any company who believes people are their greatest asset,” Davidson writes.
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