PLANADVISER - July/August 2017 - 27

and 43% are planning to postpone their retirement. In this
way, financial wellness has a definite return on investment
(ROI), he says.
It does appear that sponsors are beginning to get the
message. Eighty-two percent of financial executives believe
their company will benefit from having a financially secure
work force, and 78% think they should assist employees
with achieving financial wellness, according to a survey by
CFO Research and Prudential Investments.
Tackling Financial Wellness
The interest in financial wellness has led to a new marketplace
and area of growth in the industry. An Aon Hewitt
survey found that 7% of employers already have a financial
wellness program, and 16% plan
to add one this year. The interest has
also led to much confusion about what
" financial wellness " actually means
and the best approaches to achieving
it, according to sources.
To develop a robust financial wellness
program, " the first step is to
understand the needs, constraints
and underlying demographics of the
employee base, " says Joshua Ulmer,
corporate retirement director at Morgan
Stanley in Portland, Oregon. " Once
the employer and its service providers
are armed with this information, they
can shape an employee engagement or
financial wellness campaign in a much
more customized fashion. "
The campaign should embrace just
that broke people don't leave their problems at home and they
aren't retiring on time. Businesses are looking for financially
healthier employees because it impacts their bottom line. "
The online SmartDollar program, based on the Ramsey
Solutions program, is paid for by the sponsor, the adviser
or the recordkeeper and is personalized for the individual,
based on demographic questions and 10 personal questions,
such as the person's top financial goals, Hamilton says.
SmartDollar has found that participants " waste 24% of
their take-home pay on debt, " Hamilton says. The SmartDollar
program aims to help people get rid of that debt
quickly and create a $10,000 to $15,000 emergency fund.
" Then, it is very easy to save 15% for retirement, " he says.
s " There is
ome danger
in thinking
[that autoenrollment
and
escalation]
are the
a few key tenets, Ulmer says. Generally,
it should be relevant to life stages and
financial situations, and be comprehensive
but simple.
Topics that a financial wellness campaign should include,
panacea.
he says, are " credit and debt management, with an emphasis
on credit cards and student loans; saving and creating a
budget; different savings vehicles, such as a traditional vs.
a Roth 401(k); investments; homeownership; risk management;
education planning; retirement planning; retirement
income and distribution planning; Social Security; and
health care. "
Thirdly, Ulmer continues, it should stress how employees
benefit from working with the program, and it should keep
them engaged. Lastly, it " should be delivered in a flexible
manner across several media, such as web, email and
paper, " as different individuals want to receive information
in different ways.
Another approach, according to Brian Hamilton, vice
president of financial wellness at SmartDollar in Nashville,
Tennessee, is that financial wellness programs should start
by first addressing debt. " Forty-seven percent of Americans
could not come up with $400 to pay for [an] emergency
without having to borrow from their 401(k) or another source, "
Hamilton says. " This is why companies are picking up on
financial wellness. They are starting to connect the dots-
"
" Now you have a qualified participant, whereas, for the past
30 years, we had been asking broke
people to save for retirement. These
unqualified participants are the reason
why automatic enrollment and escalation
didn't move the needle. "
Beyond financial wellness programs,
one-on-one meetings with participants
are essential and can also address some
of the same challenges in a personalized
manner, says Brian Catanella, first
vice president and institutional consultant
with UBS Wealth Management in
Philadelphia. " We are all for individual
conversations, " he says. " We want to
take into account personal aspects that
automatic enrollment can, in no way,
factor in. There are so many components
that, if you don't factor them in,
you are taking a broad shot rather than
a sniper shot, " he says.
These one-on-one meetings are the
perfect time to present participants
with their projected retirement income
and gap analysis, Catanella says. " Engaging with the participant
on retirement readiness is of huge importance. People
don't stay at the same job, so you want to ask them about
their other savings or retirement holdings. " And, if they see
there will be a shortfall, " there is a shock value " that inevitably
will prompt them to up their savings, he says. " This is
a great opening to a discussion about saving more. "
Advisers can also prompt sponsors to conduct email
campaigns highlighting the importance of planning properly
for retirement. " Employers play such a critical role in
helping their employees prepare for retirement that any
small action on their part can make a difference, " says
Catherine Collinson, president of the Transamerica
Center for Retirement Studies, in Los Angeles.
" Advisers also need to ensure that the
plan sponsor is taking advantage of
all of the tools and communications
programs available from
its provider, and to lean on the
provider to do some of the heavy
lifting to engage employees, " she
says. -Lee Barney
planadviser.com july-august 2017 | 27
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