Integration Key to Effective Financial Wellness Program

Research by Charles Schwab finds majority of employees would engage with a financial wellness program if offered one, and employers are taking note. 

A new survey from Charles Schwab of U.S. corporate executives finds that the right financial wellness program can be very successful at driving higher utilization and appreciation of employer-sponsored savings and investment benefits.

But how can plan sponsors create an effective financial wellness solution? The answer ultimately depends on the needs of the employer’s unique work force, but certain components can benefit all.

Nathan Voris, managing director of business strategy for Retirement Plan Services at Charles Schwab, tells PLANSPONSOR that a good financial wellness program is holistic, heavily data-driven, goals-based, and integrated into the overall benefits package in a thoughtful way. A good place to start building a new program—or revamping an old one—is with a thorough examination of participant demographics, which can unearth specific financial management needs that should be addressed.

“If you have a population that is approaching retirement, has experienced a frozen DB [defined benefit] plan, and has a very specific need of income planning, then you should build a very tailored program to meet those challenges,” Voris observes. He notes that, in large companies, two participants in the same location and at the same age can have very different wellness needs based on factors that may be unobservable in the normal workplace routine, so some elements of customization will generally make sense.  

He says it may help to look at employee wellness needs in a spectrum ranging from basic budgeting to more complex long-term investing and retirement savings goals. Supplementing what the employer can deliver are various financial planning tools, available from providers to help participants first identify and then address their financial planning needs.

“It’s less about building solutions and more about getting people involved with things we may have already built and have been using successfully for years,” Voris says. “It’s about meeting the participants where they are and how they want to be educated, versus building a shiny new toy.”

And there seems to be a growing demand among participants for their employers’ guidance in financial planning. Charles Schwab’s 2016 401(k) Participant Survey found that 85% of employees would take advantage of a financial wellness program if offered one. Voris says the rate was “higher than expected.”

Against this backdrop, Schwab’s recent executive survey finds that 52% of respondents say they have implemented or are considering a financial wellness program. Overall, 44% believe that a financial wellness program is becoming a “must-have” benefit in order to remain competitive.

NEXT: Integration can be key to a successful financial wellness program

A financial wellness program does not have to be costly to execute or difficult to implement. These programs can rely on using the right data from providers to pinpoint participants’ most pressing needs, and then the programming can be developed from components of benefits already in place within a plan sponsor’s compensation arsenal.

In its executive survey analysis, Charles Schwab notes, “Today’s 401(k) and equity compensation plans are already structured to arm participants with knowledge and encourage active engagement, and [therefore] these plans may be leveraged to build a financial wellness program without adding cost or significant resource demands.”

Voris suggests “mak[ing the program] as personalized as possible, based on what the data tells you about what participants need and want. Sometimes it can be as simple as adding a financial well-being component to the health and wellness piece.” He adds that Charles Schwab has seen success with clients that offer their employees perks such as gift cards and redeemable points for making certain positive decisions—e.g., listening to health-related content on provider websites or taking health screenings. He adds that clients are also increasingly considering switching to high-deductible health plans (HDHPs) with health savings accounts (HSAs) in order to help participants begin thinking about retirement and long-term health care planning hand-in-hand.

“We are seeing larger employers hiring third parties to help them integrate across all benefits solutions and thinking about it more holistically,” explains Voris. “As a plan sponsor, you have to have partners that are willing to do their piece and not expect to own the whole solution. Certain partners you have may be more qualified to do certain things.”

When asked about the best way to structure a financial wellness program, more than half (59%) of executives said it should be integrated with the entire employee benefits package.

“The path to financial wellness often starts at work, and it is encouraging to see so many companies moving toward making it a priority,” Voris concludes. “Employers can play a huge part in helping their employees take ownership of their finances by encouraging them to take an active role, ask questions and ultimately take accountability for their financial future.”

Charles Schwab’s Workplace Financial Wellness white paper can be accessed at