Financial Wellness Factors

The “Financial Finesse Year in Review: 2015” concluded that employees who have live interactions – either voice or physical – with a financial adviser “experience a higher degree of positive behavioral change toward financial wellness”. reported “…the changes in each category of financial wellness are small and the sample size is large. But, [Liz Davidson, CEO of Financial Finesse in El Segundo] says the most significant variable is the difficult economic times. ‘Wages are stagnating; there is concern about market uncertainty, and there is more pressure on employees to fund more of their own benefits’.”

There was a significant difference between the outcomes of technology alone, and human interactions:

  • Employees who had five contacts, via phone or in person, with financial professionals showed considerable progress while online dealings alone did not improve financial wellness.
  • 98% of those having personal communications contribute to their retirement plans while only 89% of online-only users contribute.
  • 64% feel confident in their investment approach, but only 42% of online-only users do.

Analysis of 31 key financial wellness questions indicated that the gender gap declined 2 percentage points from 2014 to 2015. A full 71% of employees using their financial wellness programs were women, which has contributed to narrowing the gap. Davidson said, “Women are more comfortable taking control of financial issues; it’s the early stages of social change…we observe increased confidence.”

71% of employees cited retirement planning as a top concern in 2015. Getting out of debt topped the concerns for African-Americans at 75%, and for Latinos (66%); Financial Finesse indicated that this debt problem could very well be affecting their retirement readiness. also reported:

  • Wells Fargo has seen a 37% increase in the number of collective investment trusts (CIT) being offered in retirement plans for which it keeps records and a 57% increase in CIT assets from year end 2012 through year end 2015.
  • Willis Towers Watson’s 2015/2016 Global Benefits Attitudes Survey indicated that 76% of American employees expect their retirement to be less secure than their parents’; 75% think Social Security benefits will be reduced and 70% think government-provided health benefits will worsen.

Let your QBI Consultant know how we can be of help with timely and effective administrative plan reviews.

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