Data & Research April 28, 2016

Jobs, Finances Causing Stress for Workers

Twenty percent report feeling extremely stressed.
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Many workers are feeling high levels of stress, according to a Lockton report, “Finding the Links Between Retirement, Stress and Health.” Twenty percent of 600 people surveyed say they feel extremely stressed, and point to their jobs and financial situation as the root causes.

For those who say their financial situation is fair to poor, 40% report high levels of stress. However, for those who believe their financial situation is good to excellent, only 28% say they are extremely stressed.

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Asked whether there is a high correlation between their financial situation and stress, 20% said yes, 25% said no and 50% were neutral. Those who felt higher levels of stress tended to be less educated or women with incomes below $50,000.

Among those with fair to poor financial situations, 25% say they have difficulty managing money. This drops to a mere 3% of those with good to excellent finances.

Fifty percent of the respondents say they carry debt of $10,000 or more, not including their mortgage, and they are paying down this debt at a weighted average of $400 a month. The majority of respondents are carrying a mortgage, averaging $1,075 a month.

NEXT: How stress translates to work ethics

Those who feel financial stress report feeling ill, taking time off from work and not being as productive as they could be. They feel tired, and suffer from headaches, depression and other ailments. “Often, this group would be absent or disengaged from their work,” according to the Lockton report. “They were twice as likely to use sick time when they were not ill and more likely to report being nonproductive. Half of all respondents reported using work time to review financial statements or pay bills.”

Forty-three percent think that having a retirement plan at work eases their financial concerns somewhat, and 52% say such a plan eases their concerns a great deal. Being successful in the plan also mattered; those who were most retirement ready had the highest levels of job satisfaction.

Overall, 70% think they are knowledgeable about retirement, but this drops to 54% for those experiencing high levels of financial stress. For those who feel low financial stress, 84% think they are knowledgeable about retirement. This confidence in retirement knowledge may not match up with reality, as more than half contribute 6% or less to their retirement plan.

NEXT: How to ease financial concerns

Survey respondents said creating a financial plan, meeting with a financial professional and receiving investment education would decrease their financial concerns. Among the most stressed employees, debt management and paying off credit card balances are their two biggest goals.

Stockton concludes that more well-rounded financial wellness programs are needed: “Benefits advisers and service providers have already begun the transition from narrowly focused retirement education programs to more integrated financial well-being efforts. Savings-oriented engagement strategies must balance immediate debt, family support and consumer-driven health care costs with long-term investment needs.”
Data & Research April 28, 2016

Most Americans Think Financial Products Are Free

And of those who think they pay for these products, many have no idea how much.
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Most Americans believe they pay nothing for their financial products or have no idea what they pay, according to a study by Hearts & Wallets, “Wants & Pricing: What Investors Buy & Competitive Ratings.”

About one-third (31%) say don’t know what they pay for their financial products, an increase of four percentage point in one year. Less than one-third (28%) say for certain they are charged a fee by a retail financial “store,” which Hearts & Wallets defines as retail and defined contribution providers that work directly with investors. Of the 41% who say they pay their financial store “nothing” and instead pay through actual products, 72% say they pay nothing for the product.

“Everyone knows nothing is free in life,” says Laura Varas, founder and CEO of Hearts & Wallets. “When you add together the Americans who say they don’t know what they pay for their financial products, and the high number of people who say they pay nothing for products that they obtain through their retail financial stores, we have a major problem. Consumers should know what they pay.”

Varas adds that the industry has a responsibility to price clearly and should lay out the different choices available to consumers. Understanding how a firm earns money is the No. 1 trust driver within the control of a financial services firm, Hearts & Wallets says. Only one in five consumers has a clear understanding of the incentives of their providers, a figure that has not improved year to year. “Competition will force traditional financial services firms to confront the pricing issue,” Varas says. “Robo-advisers and other new fintech entrants are explaining pricing clearly and pushing others in the marketplace to do the same.”

NEXT: What investors want The study also ranked U.S. households’ top 10 “wants” in their financial services providers and found that all income groups and life stages are becoming more demanding. The top three most important attributes are “fees clear and understandable” (56%), “is unbiased, puts my interests first” (54%) and “explains things in understandable terms” (54%). About half of investors are highly price-sensitive and want providers to have “low fees” (54%) or at least “fees that are reasonable for the service provided” (53%).

“To differentiate services, providers should determine which distinct market segments they want to address,” Varas says. “For example, people close to retirement are more anxious, so the reliability service dimension of ‘is unbiased, puts my interests first’ is much higher than for a Millennial.”

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