Sector Report: The Pressures of Financial Wellness

By Patty Kujawa

Nov. 9, 2017

For a lot of American workers, dealing with personal finances is a lot like the anxiety they feel about going to the dentist: they know it would be better to go and get it over with but the fear of what they may find out can be overwhelming.Financial Wellness

Stress about money pervades every age, income level and gender, a new survey from Charles Schwab Corp. showed. It even affects the ones who are saving for retirement. People don’t know where to start and they don’t think they can manage their daily money issues on their own, said Nathan Voris, managing director for Schwab’s Retirement Plan Services.

Most people work every day, so that worry is spilling into their jobs. In fact, employers may be the biggest losers, facing losses of up to $250 billion anually over people stressing about money issues, according to a new survey from Mercer.

As a result, organizations are looking for a superhero-like remedy and are paying a lot of attention to financial wellness. In general, financial wellness is a holistic financial plan tailored to a person’s needs today and tomorrow. Plans can offer budgeting, debt repayment, short- and long-term savings goals or other financial issues affecting workers.

With the growing demand, the number of companies offering plans is increasing dramatically too, said Joe Miller, president of Shortlister, a consulting firm that tracks companies offering all types of wellness plans.

Of the 39 financial wellness companies tracked by Shortlister, 10 have cropped up in the past three years.

“It is a constant process for us to chase down and find out who the new vendors are,” Miller said. “There is an opportunity here, and you’re seeing lots of folks enter the market.”

Last year, Fidelity Investments formalized its financial wellness program. Fidelity, the top record-keeper in the 401(k) industry, has pulled 98.5 percent of its defined-contribution plan sponsors, including companies like Nike Inc. and Potbelly Sandwich Works into the financial wellness space.

Experts agreed that employers are making financial wellness a priority, but not all are adopting programs. Employers that are looking at these plans cut the amount of time workers are spending on financial issues, several observers noted.

In a recent look at well-being overall, Shortlister found that 81 percent of employers responding said they planned to add niche solutions like diabetes management, health coaching and financial wellness to their benefits lineup. Miller said that employers are looking beyond their workers’ physical health and are seeing financial wellness and other similar programs as a way to attract and retain talent.

When asked about prioritizing financial wellness, employers cited it was the top growing demand, but it finished last in the must-have category.

One of the reasons it hasn’t shifted to a necessity for employers is because it isn’t well-defined and employers want vendors who can provide all benefits on one platform, not piecemeal arrangements for their niche programs, Miller said.

“We see a lot of kicking the tires right now, but employers are not taking it through the finish line,” Miller said. “This year is one of discovery. Next year is when employers will put it in place.”

Plans that teach financial courage first are finding success, said Neil Lloyd, head of U.S. defined-contribution and financial wellness research at Mercer. Lloyd said financial courage is a person’s confidence in their ability to get started in addressing their financial issues. It’s like settling into the dentist’s chair, he added.

“We are beginning to realize that we need to help people feel confident before they start,” Lloyd said. “You have to bolster people who are not courageous.”

That begins with small wins, not gigantic financial wellness seminars or kickoff campaigns. For many people, getting a financial score can completely turn them off to the idea of fixing their finances because the score may seem too low to fix.

“Give people the courage to engage in these issues, and we find there are lots of things we can do,” Lloyd said.

As expected, larger employers are the first to dive into financial wellness initiatives. Alight Solutions, a benefits administration provider formerly part of AonHewitt, found that innovators in this space offer a broad spectrum of financial wellness programs, are linking health and financial wellness and are customizing messages to different types of users.

Rob Austin, Alight’s director of research, said innovative companies are starting to fold financial wellness into annual enrollment. Instead of simply selecting a medical plan or 401(k) option, pioneering companies are offering modeling tools to show how programs fit together. Nearly 60 percent of innovative companies are communicating the connection between health and financial stress and 37 percent are providing workers with help on their health and retirement decisions, Alight’s latest survey showed.

“We are constantly going to see this evolving,” Austin said.

Patty Kujawa is a freelance writer in the Milwaukee area. Comment below or email


Patty Kujawa is a freelance writer based in Milwaukee.

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